I was in that situation. A friend whose financial situation suddenly changed, she was on her own with two small children (6 and 4). Said to her she could always ask to borrow money as long as she paid it back.
Started £5 her to buy food for the last few days of the month... soon we were up to £20 for shoes and such like. BUT because she knew she could come back the conversations were going along the lines of:
"Can I borrow £30 because B has grown out of her shoes-I can get some half price, but then I'll need to buy A a treat because he will be upset if his sister has new shoes and he doesn't."
Later that evening I'd get a phone call:
"Could I borrow the money again. You see we went to town and I saw a DVD that we all wanted to watch so I got that, and when we got home I thought it would be really nice to have a treat, so I got a bottle of wine and we ordered pizza in..."
Now if that had been a one off, I really wouldn't have minded. Everyone needs a treat, and she always paid the money back. But it started being quite frequent that I'd lend the money for a necessity and she'd buy a treat that we wouldn't get because it was too expensive, and then still need to get the necessity.
It got up to around £100- £150 a month she'd owe at the start of the month, and each month she owed more. We had enough savings to cover this without a problem, although it was a lot of money a month to spend out. But she always paid it back.
Then I realised that actually I wasn't helping her. Because she didn't need to think "oh, I would like that, but we haven't got the money" because she could always come back to me. And she was the sort of person who always thought good times were round the corner-interest free credit was another of her weaknesses-she'd go to get a cheap TV and come back with a huge flatscreen £750 job because she didn't have to pay for it until next year when of couse she'd have enough money.
So I started "not having enough money", she'd ask for £30 and I'd only have £20 in the house and not able to get more. That stopped her spending it when she didn't need to, as she then wasn't confident at getting more.
But what was really scary, was that a few years down the line after she'd moved away and wasn't borrowing any more, was in conversation with a group, it came out that she had been doing the same to several people. So the £100 she owed me each month was just the tip of the iceburg. In fact several of the group had basically written off quite big debts because they realised she wasn't going to be able pay.