Teach niece how to manage finances

Q. My brother and sister-in-law have notoriously poor money-management skills and compulsive spending habits. After many years of helping them with gifts and loans, their immediate families now refuse to lend them money.

When their 17-year-old daughter was visiting recently, she mentioned that her parents pressure her to lend them money, which they are slow to pay back, if at all. Her parents tell her it is the least she can do considering they support her, provide a place to live, etc. She says they use the money for groceries and gas.

With her parents' combined annual income of $150,000, one would think such essentials would not be a worry.

My niece works several jobs and is saving money for college application fees and expenses. When I asked, she said she didn't want me to mention this to her parents, a wish I would like to respect. Yet I wonder why she mentioned it if she doesn't want help.

I've thought through several scenarios of how a conversation might go if I brought this up with her parents, and none of them end happily. Yet I hate to see a young person bullied into parting with her hard-earned savings. Should I drop it? What advice should I give my niece?

Uncle

A. Definitely don't drop it, she needs you. You're right that she's asking for help, just not in the form of speaking on her behalf to her parents.

Even if she wanted you to, I wouldn't recommend that anyway. She is 17, not 12, still a minor but only months away from being the captain of her own little academic, social and time-management ship in college.

Her parents' irresponsibility might as well work to her advantage for once by allowing her to practice her self-advocacy skills early with support, since those guilt-trips apparently work. Self-advocacy is not only critical to an empowered existence, but also (presumably) not being taught by parents who are literally setting her savings on fire.

This is where you come in. Self-advocacy is more skill than instinct, and it is teachable. You can help teach it. Financial literacy also needs to be taught when parents aren't modeling it for their kids. You can help teach her those skills, too.

My colleague Michelle Singletary, a personal finance columnist, recommends the FoolProof Foundation, a not-for-profit financial education resource (http://www.foolproofme.com), as well as the following books: "O.M.G. Official Money Guide for Teenagers," by Susan and Michael Beacham and their daughter, Allison; "Get a Financial Life" by Beth Kobliner; and the aptly titled "How to be Richer, Smarter and Better Looking Than Your Parents" by Zac Bissonnette. Singletary's "21-Day Financial Fast" (http://wapo.st/2f9oA0k) is a plan you can try as a team.

If her family is chaotic, then your niece will need abundant support to gain her independence, but you also can't overstep your boundaries. She has approached you about the money situation, so stick to that, for now at least.

Have a look, buy one or three books as a gift to your niece, and offer this: If she's willing, you'll help her learn how to budget, save, invest, ask tough questions and, most important, say no.

Family is complicated, but the role of money management in a secure and orderly life is as basic as it gets.

• Email Carolyn at tellme@washpost.com, follow her on Facebook at www.facebook.com/carolyn.hax or chat with her online at noon Eastern time each Friday at www.washingtonpost.com.

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