What to Do When a Loved One Asks to Borrow Money

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One of the most difficult things is not being able to help out a loved one. Even though we want to help them, sometimes it just isn’t possible. Saying no becomes very difficult, especially if the matter is financial.

Helping a loved one financially is a tough situation, no matter what your answer is. It doesn’t matter if you are giving them the money or aren’t, things tend to get awkward. If you don’t give them the money, then they can get offended, the relationship can turn sour as a result.

If you do give them money, getting it back is another headache. They expect you to understand and can get lazy returning the money. Fights escalate when you do ask them to return the money.

Although you want to help them, you have to think about yourself first. If loaning them money is going to put yourself in a tough spot financially, then that is not a good situation to be in. You have to make a decision based on how it affects you. Yes, we want to save our loved ones from all the issues, but when we are all adults solving our own problems becomes a priority and everyone is responsible for their own life. 

No one is entitled to anything, no matter what their relation to you. If you don’t want to give them money, then you shouldn’t feel pressurized to do so. And if you do, then that is a clear red flag to not give them money, because chances are you will never see that money again.

Lending money to family often ends up breaking your budget, because it is an unexpected expense and chances are that the amount is big.

What to do when a monetary request does come your way from a loved one?

  • Figure out how much you can spare without going into a financial crunch yourself.
  • If it does not affect your budget, then go ahead with it.
  • Set a few ground rules though
    • Set a date at which they are supposed to return the money.
    • Make it clear that you will never help them again if the given money isn’t returned first.

Setting boundaries is really important to make it clear that you can’t be used as a financial crutch. You have your own commitments and responsibilities to take care of. If this person is always borrowing money, and never seems to change anything financially to not be in this position, then it might be time to let that person go.

While the main thing that we are frightened of is losing the person when it comes to financial matters, sometimes that is exactly what needs to happen for the peace of your mind and health of your wallet.

Final Thoughts

If you really want to help the person, then take your budget into account before lending them money. Set ground rules about repayment of the money, and if they are a serial borrower, then cut them off. Learn to say “no.” It is one of the most important things that you will need to learn to save yourself from people who are going to use your money as their own.