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A recent call from a relative this week reminded me how much things have changed over the last month.

It's not a big deal, but my view on bailing out family with money has become more solidified.

Let me first explain the conversation that started it over a month ago.

Can You Help Me Out? Please?
Do you have relatives or in-laws who need money? Learn how you can help them with ruining your finances or marriage!

I was working at the home office getting ready to pick up my husband and then pick up my car that was in the shop for repairs.

I received a phone call from a relative of mine and they wanted to check up on me and see how everything was going. After some small talk, my relative asked me if I could help out with their cell phone bill.

I hesitated for a couple of reasons. First, we bought them the cell phone and paid for the first month to help them get on their feet.

When I picked it up I told them that they were responsible for it from now on. It's not a fancy phone, but it has everything they need and some – phone, text, and internet. It's a prepaid phone and we got a great deal on it.

Second, this is really between my relative and my husband. I'm picky about the video games I like to play and so the games he was offering didn't interest me.

I told him to call my husband and personally ask him if he's interested in buying the games.

He then told me that he wanted me to feel my husband out and text him if he was interested, then he would call and formally ask.

Upset that he can't even do his own work, I told him that I wouldn't. He needed to do it himself.

Twenty minutes later when I was talking to my husband, I caved and asked him if he would be interested in buying some video games.

He said he wasn't and I texted my relative back.

*Sighs* I'm a sucker.

I realized then that I was enabling instead of helping my relative.

Are you feeling pressured to lend money to your family? Here's how you can help them without harming your finances or marriage!

Why You Don't Feel Like Talking with Your Spouse

There are a few reasons I can think of why you don't want to talk to your spouse about your family and money.

There in no particular order, just listing them as I think about it.

It'll put a strain on your own finances.

Money and marriage is a delicate subject for some.

Are you in a financial position to help out? If it's a significant amount, then it can seem like even more of a burden to bear.

It'll put a strain on your marriage.

Have you two been working hard on getting out of debt, taking on side jobs or extra projects?

Have you cut down on your family spending to build your debt snowball.

How would your spouse feel if their hard-earned money is being used to bail out your family? Will it start a fight?

It's not really an emergency.

Admit it – even though you feel bad and want to help out of a sense of family, in your heart you know it's not an emergency.

That relative always calls when they have ‘no other options' which seems to be the same time every month or so.

Family screwed up big time.

Is it really is an emergency? Or has your relative messed up with their finances?

Let's take a scenario where they refinanced that house a few times, cashing out, but not using that money to pay down debt.

The market turns and now they are underwater. They need help to make the mortgage this month.

What do you do?

As you figure out why you don't want to do this, make sure that you keep communication open and honest between you and your spouse.

No matter what you decide with family, you two will have to live with the consequences together so make it a little bit easier and stay on the same page.

Being Objective with Family & Money

Let's be honest upfront – it's almost impossible to be completely objective when dealing with family and money.

The next best solution is asking some hard questions and really paying attention to the answers.

  • Are you their emergency fund? Have you noticed that they constantly go to you to get financial help? If so, then you’re their emergency fund. You should really examine if they’re having emergencies or if they have bad money management.
  • Do you have an emergency fund? If you can’t take care of yourself, then bailing out family and friends puts you in a very dangerous situation.
  • Can you really afford to help them? You may have some savings tucked away, but can you afford never seeing that money again?
  • How does your spouse feel? Don't guess on this one. Sit down and talk about it together.  If it's your side of the family they may be able to give you an insightful perspective. If it's their family, ask them how they feel about the situation. You may not agree with their response, but you at least have a starting point to discuss this.

I should also add if you feel that your family or your spouse's family is trying to guilt-trip you or put pressure on you two to make a decision right away, please voice your concerns.

No one should push you to feel bad about this delicate situation.

Shifting the Perspective with Lending

So far I've been talking about reacting to either family's request for help. That's only part of the conversation.

While not being a jerk about it, you do have the right to ask the hard questions to get an idea of how committed they are to getting their finances squared away.

  • How did you get into this mess? It might seem rude, but if they are asking for your money, you should see if they can admit what the problem is. Do they see the pattern of running out of money before the month ends? Do they have a long term cash flow issue?
  • Where do you keep your savings? Emergency funds are not something just for the wealthy. Do they even have a savings account? (I found out that my relative doesn't. His checking and savings were closed when they were in the negative too long.)
  • What's the plan to pay me back? I know, it's tough to ask that, but it's necessary. Why should you do all the heavy lifting? Instead, have them take ownership of their problems.

If you decide to loan them money (that's a judgment call for you and your spouse to make, not me) then the last thing you need to ask them is to give you an agreement in writing before handing over the money.

Avoid any confusion or miscommunication by stating the loan amount, the due date, and the payment plan.

Yes, a payment plan.

You’re more likely to see your money again if you treat this professionally. If they object to this simple request, then you may not want to give out a loan.

You’re probably giving them a better deal than any bank would and you’re willing to work out a manageable plan, so what’s their problem?

My Take on Lending Family Money

Over the four years we've been married, I've shifted from bailing out family during emergencies immediately to being more cautious.

I have no problem helping my loved ones during tough times when something unexpected happens. However, I've come to see for myself that not everything is an emergency.

When we give money, it may not be the amount that family needs, but it's an amount that won't cause us to resent a family member if they don't pay us back.

It's simply a gift from us to them.

Thoughts on Bailing Out Family

Have you've been trapped by guilt to give money to family even if it wasn't a good idea?

How did your spouse react? Do you have any advice on how to handle this delicate situation?

About Elle Martinez

Elle Martinez helps families at Couple Money achieve financial freedom by sharing tips for reducing debt, increase income, and building net worth. Learn how to live on one income and have fun with the second..

20 comments add your comment

  1. Elle,

    That is one though situation to be in! But wow you completely crushed it. Did your husband feel guilty? I know I would have.

    • I think it’s tough to say no, so I didn’t try to press the issue with him. I think I started to realize I wasn’t really helping by bailing out family with money. We both agreed it was the right call.

  2. It is great to know that I’m not alone in this world! Just because we have college degrees, own our cars, have cell phones, have a mortgage (don’t own our home just yet – the bank does), and so on, my family thinks we are rich. Every week, someone in the family calls with an “emergency” that they need help with. My husband and I are in Baby Step 2 of Dave Ramsey’s Total Money Makeover and very close to putting our big toe into Step 3. We’re working hard to pay off all our debts and have even taken extra work and sold items to realize our financial freedom. And yet, my family thinks it is my responsibility to help them out every single week. I’m talking about cousins, aunts, uncles, second cousins, grandmother and even both of my parents and my step mother (with my 2 baby brothers who are 10). I had to move 900 miles away to remove myself from their in-person requests.

    How do I deal with it now? I have come to the point of being blunt and telling them no. If they knew something was coming up, I’d tell them it is their fault when they had 3 years to plan. If it is co-signing for a car loan, I’d ask them how are they going to pay the loan to the bank if they can’t even pay their mortgage every month.

    Sure, I may seem like a witch and I’m already known as the “black sheep” for this but my family needs to grow up and take responsibility. I am more than happy to help those that have done everything they can to be responsible but I will not support laziness.

    • I’m amazed at how frequently you get asked to help. I know some families are bolder than others, so getting insights on how others handle it is helpful.

      Happy to hear you and your husband are fighting hard to get out of debt. Stay united and keep focused on your goal!

  3. That strain on one’s marriage really is something interesting to note. If it’s a small enough bailout, I probably will still mention it to my spouse, but will do my best to brush it off as no big deal.

    Have link backed to this post. Very thoughtful!

  4. I think you’re right – while it may seem like an emergency to the person who is stuck in the bind, it probably could have been prevented with proper management of resources. There are emergencies that are ok to help out with, then there’s enabling. Good luck – this is a sticky situation!

    • My husband was first to notice the pattern. He pointed out that for a certain relative they wanted 2-3 days before the money is due to ask for help. I didn’t see it until he said something. It can pay to listen to your spouse because they can see things you’ve missed. It was an eye opener for me.

  5. When we’d been married a few months, one of my hubby’s relatives called and asked us for money. Since he’d not really had a full time job (by his own choice) for a few years and was choosing to live with his in-laws, we said no. It would have been different if he was a hard working man who lived on a budget and did everything he could to stay on top of his bills. In that situation, we would have chosen to give him a money gift – no strings attached – but we would have never given him a money loan. Even though he wasn’t a favorite, well-respected relative, we didn’t want to harm relationships any further by having a loan between the two parties. In 16 years of marriage, that has been the only time we’ve been asked for money by anyone except missionaries we choose to support, pastors, etc., that we’ve chosen to help support their ministry.

    Thankfully, my husband and I are in agreement about this all. And since I’m a stay-at-home full time mom and wife, and we’ve lived pretty frugally over the years, no one asks us for money because they know that we have worked hard for me to be able to stay home, and we’ve been frugal enough that they know we won’t support their lack of planning or saving for tough times.

    These kinds of situations are very delicate, as you have mentioned. If husbands and wives can talk about them ahead of time, before anyone ever asks for money, then it will make it that much easier on them when someone does ask.

    But I wholeheartedly suggest that you never, ever make a loan to someone. Consider it a financial gift to that person. If, out of their honor as a human being and their respect for you as being a generous person, they give you money back to replace what they were given, then very good! But if they never give you anything in repayment, then it’s no skin off of your back because it was a gift in the first place. Loaning people money changes the relationship, probably 99% of the time.

  6. I have lost a few people in my life who I thought were friends over this lending stuff. I seriously wish people would understand what a position they are putting their friends in by just asking. Even tho they say, they understand, many don’t. Friends for 15+ years, who wanted me to help their daughter (who I loved dearly) but it was just a bad idea. I said that I would lend my friend the money and she could then lend it to her daughter, but she would be the responsible party for the payback — she refused. So why make me the evil one when she herself didn’t want to be responsible for the kids debt. Right after that she had every excuse in the book why we couldn’t get together – and I our friendship was over. So sad really.
    When we do see a situation that does deserve help, we do what we can – and consider it more of a gift than a loan. In one case, my husband said to me ~ this money will change their lives and it means nothing to us right now ~ we have to give it to them.
    There are wise people who struggle and try, and fools who use whomever they can. You have to learn to discern the difference!