Sunday, September 30, 2007

Loaning money to family...

I was just thinking about Boomie's question to not help my BIL out. I guess I'm old fashioned and I haven't learned my lesson at all. I know the saying never loan money to family. But the truth is DH and I aren't the type exactly to say no.

A lot of people I think are the same way. I think we could say no if the circumstances were right like alcoholism, gambling, or drug use. But if the family member were in dire circumstances because of job loss, medical illness, etc, I think many people would have trouble saying no.

I think it's probably better to say no, but the reality is it's hard to. Plus in the end it's just money. You can earn more, save more. I get that philosophy from my mom. She's unfortunately set a terrible example of supporting my grandparents. But personally I would feel really greedy and stingy if all I did was save my money and never shared it.

I enjoy giving people presents. I also don't expect to get paid back. For my BIL well, we used to pay for his cell phone on our family plan until he got a girlfriend and started abusing the minutes. Then we kicked him off. Was it wrong to get him a plan? Maybe but it was cheap and easy for a young man starting out.

I buy the newpaper and phone for my grandmother whose a very fixed budget. I used to mail them gift cards to the supermarket. I guess this is another reason why it's so difficult for me to focus on paying off the house. DH and I feel great responsibility for our families. And we need to be able to help them out in case of any emergency. So having accesible cash is a necessity.

Perhaps not the wisest financial decisions. But we do realize the position we're in. And we do realize that we're not there to solve all problems. But we can try to guide them to a better solution.

Do you loan your family money? What about friends? We've also had good karma about being loaned money from our current tenant, so I won't say I wouldn't pay back the favor. In the end to us it's still just money.


Lady N said...

I just started reading your blog; my husband and I have the same issues - obligations to family. It is hard to say no, esp with family. When I do loan money to family, I have to do with the feeling of being OK never seeing it again. You are right, at the end of the day, its just money, I don't ever want a relationship ruined because someone couldn't pay me back.

Living Almost Large said...

Yeah it's pretty much gone when loaned to family sometimes.

Nivek said...

My hard fast rule is NEVER lend money. If a friend or family member needs financial help, I give it as a gift. I make it clear that I don't expect repayment or anything in return. If I have no expectation of repayment, I cannot be disappointed. The person who received the gift will never be made to feel as though they have let me down.

I'm not rich but sometimes I'm in a better position than those I care about. They usually don't ask, I just offer it along with an explanation of what the intended gift should be used for (rent, student loan payment. etc.). So far, no one has made me regret my policy.