Should I Lend Money to a Family Member?
Deciding whether or not to lend a family member can be a frustrating and difficult decision to make. On one hand, you are likely quite close to the person and feel for their situation. However, you might not be doing too well yourself, and hey – you work hard for your money. There really is no right or wrong decision, but the decision you make should be grounded in the facts so as to avoid any discomfort between you and your family member.
Family Member Lending Money Situations
Let’s look at a few different situations. You’ve owned your own business for thirty years and everything has been going great. Each year, more and more income finds you, and – truth be told – you’re sitting pretty when it comes to money. All of a sudden, your brother calls you and says he’s out of work and his house is about to be foreclosed on as a result. Are you obligated to help him out?
- Of course not, but it sounds like you have the means, so why not?
Or how about another situation? You’re a college graduate who is struggling to make it in the working world. It seems like no matter how much you try to find that perfect job it slips right out from under your fingers. You had lunch with your sister yesterday and she told you about how she could really use an extra few hundred dollars to get her through the month. It’s not detrimental, but it sure would help. You think about it overnight, and while you aren’t exactly poor, you find making rent each month to be easier said than done. Should you loan her the money?
- You can if you want to, but it sounds like you need it more than she does.
Deciding whether or not to loan a family member money is entirely situational. If you can afford to do so without suffering at all, it’s tough to explain to your family member why you don’t want to lend them money. However, if you are in a rough situation yourself, they will likely understand that you simply don’t have the extra money at the moment, but if the situation were different, you would gladly be there to help out. Lending money to a family member is a different situation from lending money to friends because of the proximity and stronger bonds but the thought process is similar.
No one should be obligated to loan money to a relative simply because of family blood relations. Everything must be taken into consideration. Your financial situation and their reason for the money loan is very important and cannot be ignored.Do not let the pressures of other family members convince you that it is a “requirement” to lend this money. Lending money to family members is already a shaky and awkward situation, do it right the first time.
Keep an open line of communication and make decisions based upon facts so ultimately you will be able to handle these situations easier when you are faced with them. You can always suggest and lead them to payday loans or lending institutions such as credit unions.
Disclaimer: We are an informational site that receives compensation from companies of products we endorse. We are independently owned and the opinions expressed here are our own.