Lending Money to Family — What to do when a loved one asks for money.

Lending Money to Family — What to do when a loved one asks for money.R SnodgrassFollow3 min read·Aug 19, 2017 --

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Post from the Penny Bean

Let me start off by saying that lending money to family is NEVER an ideal situation. For anyone.Ever.

I will be completely honest by saying I have never had to borrow money from family or friends. But, I know for a fact that if you are the person being asked to lend the money, it puts you in

a very uncomfortable spot. If you say ‘no’, then you are going to feel guilty and selfish. If you say yes, then you run the risk of being taken advantage of with very little way to recoup

your lost money without being seen as stingy and selfish. See the dilemma?

As a lender you are stuck no matter what.

I don’t know of any other subject, aside from religion and politics, than can polarize a room like mixing family and money. My entire life, I went out on a financial limb for family members

three times. Each time was a different situation with a different family member. But each time I asked myself the same three questions:

Why are they in a financial bind? Is this a person who is normally very responsible? Or is running out of money before payday a weekly occurrence? Lending money to someone who refuses to to

learn how to live within their means, even if they always pay you back, is enabling their self harming behavior.

What is it they need money for?Concert tickets? No. That is a pure want, not a need.Electricity going to be cut off? Maybe. Did they run short of money because they decided to buy concert

tickets? Or have they been laid off for months and can’t find work?Need money to get a haircut for a job interview? Yes. Absolutely.How much money can I lend without ‘feeling’ it? Don’t ever

give more money can you afford. There’s nothing to be gain by you putting yourself in a financial bind to get someone else out of one.

Alternatives to lending money If you are stuck answering these questions or you’re just not comfortable with having someone owe you money. There are a couple of other options I know that

work.

Offer them work instead of a loan. My grandmother married and raised the first of her seven children during the depression. She wasn’t keen on lending money to people, BUT she might have a

shed that needed to be painted. Or yard work that needed to be done. She believed that when you had to work for something you appreciated it more. I think she was right.

Offer the money as a gift. If the amount of money isn’t terribly significant, consider giving the money as a gift. Perhaps a birthday present or Christmas present depending on the time of

year. This allows you to be generous without the stress of lending money to family and undercurrent of resentment if the money isn’t repaid.

The most important rule to follow Lastly, and probably most importantly, always listen to your gut. If you are hesitant to lend or even give someone money, there is likely a good reason why.

Don’t be guilted into ignoring your instincts. You are in control of your finances and you have to you live with what happens to them. Hopefully these questions and ideas will help you make

wise decisions.