Lending Money to Family – Reader Struggle
December 11, 2009
Lending money to family and friends is no picnic, just ask Brandon. He’s a reader who left the comments below on the post from earlier this year about lending money to family.
“My wife’s family does not have much care when it comes to money. they don’t make very much, have horrible credit, and their kids are following suit. My brother-in-law borrowed my car to drive to Salt Lake City and fell asleep totalling the car (but walked away). I only had liability on it so I was out $1500 which he said he would pay back. 3 years later- not a dime.”
Fortunately for my wife and I, our siblings and parents are good with their finances so we’ve never had to worry about whether we should lend money to them or not. I can see how your first instinct is to help out a family member in need, but things can get messy. Brandon goes on in the comments to share more details.
“My mother-in-law got behind on her mortgage and asked if I could lend her the $1k for two weeks till her next payday. that time all went well- no worries. then the next month the same thing and the next month. then she’d only have some of the money to pay back or one month none at all. She owed us $2500 (which is a lot for us i’m only 28).
Then she never borrowed anything for a year or so. Then the same thing again, with the guilt trip saying she can’t miss another payment or they’ll forclose. So I lend her the $1k which doesn’t get repaid. It’s now Christmas time so there is no chance of her having extra money to pay me back for who knows how long.”
This next part seems to be the real kicker, the thing that would probably get under anyone’s skin. Borrowing money and then not spending it wisely.
“I feel they just think we’re an ATM for them. The biggest problem I guess I have is that they don’t change the’re lifestyle to try and pay me back. My wife and I have 2 kids and a very modest house, no internet (i’m at work =D) a small tv with the cheapest cable package. Yet my in-laws have internet, x-tra movie packages and go out to eat more than us. I’m a very quiet person who like making people happy so I don’t wan’t to drive a wedge between us (that would kill my wife- her family is everything). What in the world can I do???”
I don’t have a good answer for Brandon since I’ve never been in that situation before. I’m hoping one of you will have some tips and advice to share with him about lending money to family. If so, please share it in the comment section below.
All posts by Ben Edwards