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Are you two fighting over whether or not to lend money to family? Learn how you can help your loved ones out without messing up your money and marriage!
The Stress of Lending Money to Family
Nothing can tear apart a marriage like family. And when you throw money into the mix it gets very stressful.
We've had to deal with this as a couple in our own marriage.
Most of the time, it hasn't been a problem, but we have had some hard discussion between ourselves family. And it looks like you're also dealing with this.
One of my most popular episodes on the podcast, even years later is How to Lend Money to Family without Being a Chump.
So I want to share some tips on how to decide if you should help family and how you can assist without loaning them money.
Should We Loan Money to Family?
I've noticed that there are two main reasons why couples fight and there's a lot of tension.
The first is you guys right now aren't in a position to financially help out.
I understand that you have this instinct to help out when you can, but there are some instances (especially when you guys are deep in debt) where you just don't have the circumstances and it's best for you to be upfront with your family on that.
Don't worry there will come a time when you'll have that ability to help out. But sometimes that is the best answer you can give them that way.
If they have another solution or someone else that they can ask they can do it sooner rather than later.
The second (and to be honest the most common) reason why couples fight over helping out your family are not with money is that there is a question in one of your minds if it's really helping or if you're enabling.
We've all had family that had emergencies. There is unexpected job loss, a child got sick and they had some savings but not enough to cover.
In those cases, most of us will give what we can to help the family out in a tight spot. But sometimes you might have a relative who constantly seems to have one emergency after another.
So how can you tell if this is a case of helping them or enabling them?
I have three questions you can discuss together to make things a bit more clear and less stressful.
- Is this the first time they've asked you for help? Sometimes when you're in the thick of it when it's your family or when your spouse is dealing with their family it's hard to have a clear head. It feels like an emergency comes up and immediately they need help now. If this has happened before, it could be a case of bad money management.
- What exactly is the emergency? We all have our own definitions of what an emergency is, but the general rule of thumb is this is sudden something unexpected. Is this a situation where they didn't plan out their budget or a true emergency?
- What's their back-up plan? You might find that they actually don't have a plan. It was all about relying on you as their safety net. Or it could be that they do have other people in their support network that they can ask.
So hopefully those three questions will give you a better idea if you're really helping them or enabling them.
Ideas to Help Family and Friends Instead of Lending Money
Maybe you guys decide that you want to help them out by lending money still isn't something you would rather do.
- Give a gift. Don't loan, just give a little something. We've given amounts that haven't damaged our budget with no expectation of getting it back. It's a free and clear gift.
- Offer to help them with budgeting. You don't have to look at their numbers, perhaps you can share your budget spreadsheet.
- Point them to different resources that they can use. Of course, if they're married you can point them out to this site but there are organizations out there like Single Stop that can help them get back on their feet.
Your Thoughts on Lending to Family and Friends
So there you guys have it. I know it's hard dealing with family. I'd love to get your take on this delicate situation. Have you ever lent money to loved ones?