What is your philosophy about lending or giving money to relatives who ask?

Moreover, what if the relative is clearly broke......but continues to shop as if there is money. Clearly, there is a priority issue here. Is it my place to point it out?

I don't like to lie and say that I have no money to lend, no money in the budget, no disposable cash, etc. when there is. However, telling them off and telling them how it is will cause hard feelings in the long run.

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Jennifer
90 350sdl

If you can't tell them the complete truth, and I understand why you cannot, then offer to take them grocery shopping and buy them food. Offer to take them clothes shopping and go to Goodwill and buy them a lot of clothes.

Etc. Don't give them money, they'll blow it.

In general, it's safe to say that a loan made to family will actually be seen as a gift and not repaid. If you can gift the money, and be ok with being pleasantly surprised in the event it is paid back, you're mentally prepared to make a family loan

Otherwise, I'd go with Botnst's suggestion, especially in the event that providing money could harm your family member (for example, someone with an uncontrollable drug habit).

I'd loan the money, in an amount you can afford to gift. $50 seems OK Don't ask for it to be repaid. Ever. And don't let them buy you anything. This way you avoid the possibility of their asking you again for money.

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You don't need a weatherman to know which way the wind blows - Robert A. Zimmerman

I wouldn't do it -- no way. I might if there was a need and that need was accompanied by responsible behavior. To me, it all comes down to helping those who help themselves.

if the relative continues to shop as though they have plenty of money i wouldnt be giving them any money.

if they have just moved and need to buy all kinds of stuff that s a whole different ball game.

as a rule i never lend money to friends and relatives. if they ask for it, i GIVE what i can afford to. i never expect that i shall get it back.

i believe that relationships are too important to be ruined over something as trivial as money. people i know and love should be able tobenefit rom my hard work (money0 if they need it. im not a fairweather friend/ relative.

but i also believe that if i (or anybody) ever borrow money i should pay it back.

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'O=00=O'
bmw 2002.
long live the legend

It depends. It depends on the situation. I have a life-long friend that is the closest thing to a brother I'll ever have (I'm an only) and he's had a difficult time as an adult. He got into drugs in a big way and today suffers from brain damage. At 40, he's just getting some traction with a full time job and being clean and sober for over six months.

Would I give/lend him money? Never. It's simply enabling the problem and encouraging him to get in deeper. He needs to stand on his own. That does not mean I won't help him. As an example, he has a gas guzzling old pick-up and works in a rural area without any transit service. I am giving him our old Mazda 626 to help out in reducing his gasoline bill. The car would be difficult to sell to raise cash for addictive substances.

If you give money to a person that can't control their spending, what good are you really doing them?

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John Shellenberg
1998 C230 "Black Betty" 240K

http://img31.exs.cx/img31/4050/tophat6.gif

IF.... loaning the $ brings the person back later for more, then get ready to be a repeat target. And that may cause longterm discomfort for you. IF... not loaning the money causes you longterm discomfort, then you lose either way. But at least one way is cheaper-

Think about the behaviors you have practiced to accomplish what you have attained- is that behavior impossible for the one seeking money? Or are they seeking a quick solution without changing their ways?

Throw 'em a bone if it gives you a sense of helping out- go with Bonst's idea, but include the truth about being in school, being on a budget, having a longer term goal that they may not be aware of (or not care about).... that may nip future requests 'in the bud'.

If you had known they were having 'trouble', would you have lended a hand without their asking? Or is it not really trouble?

Don't do it unless you can do without it. If you do "loan" the money get something in writing - length of loan, payment amt, etc..

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Jim

I have some relatives in Jersey,always scraping the bottom of the barrel,alcohol probably but not my concern.

I have said to my wife,over the years until she has tired of hearing it."let's just give'em the money,for chrissake they got 3 kids!"

Well,twice a year comes the chastened card in the mail thanking us for our benevolence with a note that we will be called later..............

Don't speak to me on the phone,I'm a total $ucker.

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In '87 I made a six figure loan to a relative for a business startup. Circumstances seemed different since it was intended as a bridge loan until he could qualify as a resident of the state. One part of me viewed it as a loan yet I never required legal documents to secure my position when land, building, equipment and materials were purchased so I guess I knew I was rolling the dice. Payments were okay the first six months or so, then they became sporadic. Eventually, as the business failed, no payments were made and the assets started being sold. I received nothing from the sale of these assets. I talked with my accountant about using this as a loss on my tax filings and was told I really didn't meet the IRS requirements. I could not demonstrate a clear intent to loan, I had not taken the normal steps to collect and it was a relative. Not much going for me on that one. Though the situation did not ruin any relationships it certainly left me feeling stupid. Very expensive mistake that I have not repeated. Loans to a relative? No. Gift? If you can afford it. In fact, even if all the pieces are correct it still is not a good idea to put yourself in the position of a bank. An affordable gift should require one to decide the merits of doing so. Will it make a positive difference or just prolong a bad situation and create an atmosphere where the person expects you to keep doing more. In my case, I foolishly thought the same way as my relative; that I had plenty of money. It would have been better to view it as part of my retirement fund and therefore not to be touched.

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Steve
'87 300TD - 132K - Soon 4-Sale
'84 300D Turbo - 122K - Driving
'77 VW Type II - 77K - Restored
'08 250EX Ninja
English Bulldog (Brier) - My best friend. Passed away 12/02/04 while in my arms.

BrierS - good points and example (not good for you though) of reasons not to be loaning to relatives. Just think what you would have had if you had put it here - oh well - hindsite is 20/20.

msft stock

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Jim

The MFS family of funds is one I have held for years. My grandfather gifted me the $2,000 minimum to get into one of their closed funds and he/I kept adding to it. Later added others. After his death, I started managing Gram's complete portfolio (with various brokers since I wouldn't dare do otherwise with her money). Have learned even more while doing that.

Actually, your venture would have been one I would have felt safer with. Relatives are nearly impossible to deal with as a true venture capitalist while people sharing similar passions are much less so.

As has been said and forgotten many times, we live. We learn.

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Steve
'87 300TD - 132K - Soon 4-Sale
'84 300D Turbo - 122K - Driving
'77 VW Type II - 77K - Restored
'08 250EX Ninja
English Bulldog (Brier) - My best friend. Passed away 12/02/04 while in my arms.

Neither a borrower nor a lender be;
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.

William Shakespeare, 'Hamlet,' Act I, Scene III

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I never loan any amount of money with a timetable attached to it. i walways tell them to pay me back when they can.

If I cannot afford to take it out of my pocket and wait indefinitely, I don't do it. It takes the pressure off of both parties.

It's a pretty $hitty feeling though, when you lend someone money to pay rent, then 2 days later, after the rent is paid, they're out having drinks and dinner.

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