Would you loan family members money?

iwubrory · July 2014

In the past 8ish months or so, my SIL has borrowed money from us twice. The first time was $350 or $400 and the second was $200 because she didn't have enough money to pay her bills. The plan was to pay us back a couple months later. Both times she went on day trips to other cities a week or two later and both times she paid us back late. DH and I were both mad that she went on these trips which obviously cost money when she claimed she had none to spare. Last week she sent me a lengthy text telling me she was desperate for money to pay bills. She said she needed $700 for July's bills and the same amount again for August. At first DH and I were thinking we wouldn't give her anything because we don't think we're actually helping her in the long run. Plus, it seems like we're becoming Bank of Iwubrory. DH talked to her and she said she had less than $5 in her bank account and her plan would be to pay July's bills and be late with August's. He caved and we decided to give her a bit, $350, and told her it was the last time. We just found out that she is going to an event tomorrow that costs minimum $20 to attend. This makes us mad.

Background info: She's a substitute teacher in her late 30s living with my MIL & FIL. I think she makes minimum $150 per day of subbing. She's supposed to be eligible for unemployment over the summer but apparently was denied.

Should we continue to give her money? Do we have a right to be pissed about how she's spending "her" money? Overall, what is your take on loaning family money (see poll)

Ibliss · July 2014

I voted $1000+ because we have lent BIL this much but it totally depends on your family member and your own financial circumstance.

My dad used to say "lend as if it were a gift", then if you don't get it back it's a non-issue and if you do it's a pleasant surprise. This is how we lend and we only do so if we are financially stable enough to never get it returned.

IMO, once you lend the money, you shouldn't "police" how the family member spends the money. If it becomes an issue, then don't lend in the future. It's not worth it to worry about what she is spending money on.

Flyingtoast · July 2014

We have lent money is smaller amounts and didn't exspect it back. Larger amounts we have had a full contact with contingencies and consiquences. Just so there was no miscommunication on exactly how much on which day, or this happens. But we have also borrowed money from family and had the same contract situation. If they are younger and starting out, it's hard for them to get a loan for their first car, ect, but older adults tend to be a sink or swim situation for us as a general rule. But we also have a conversation that this money is for XYZ, and if things change just talk to us. We lent money for a car, or deposit on a place, not I want to party and be carefree.

hopefuldog · July 2014

I voted nope nope nope for your situation. You absolutely have a right to be pissed with how she is spending YOUR money! She is begging you for loans to do fun stuff, multiple times. I'm not saying she shouldn't be allowed to spend a penny on a non-necessity, but she is obviously struggling with managing her money. I would not lend her money again. She has a roof over her that she won't be evicted from. It's time for her to grow up.

Maybe you could gift her a session with a personal financial manager?

I absolutely would loan money to a family member depending on the situation. Fortunately I have not had to.

keags5496 · July 2014

megash113 said:
SS - yes, I would have offered her money the first time. After that? Nope.

Considering all of these other things she's doing? Hell no.

This exactly.

TessyMessy · July 2014

I voted Nope for this situation because from what you have explained it sounds like she is taking advantage of you. What kind of bills does she have living with her parents? Do they charge her rent? Does she have children? Can she get a second job?

cattuccino · July 2014

Money gets people emotional. I like what @Ibliss‌'s dad said though....and if that outcome isn't good and/or you're making sacrifices you shouldn't or it causes friction, don't lend at all. On the plus side - while late, at least you've always been paid back.

I don't really think you should be too attached to how she spends the money or other money she might be getting for these "extras"... if it does bother you enough I think you could have a discussion with her on how you feel your money/help is not going to where you were lead to believe it needed/needs to and you're feeling like she's either being dishonest with what she needs money for or needs some help with management.

Given a particular situation I can't put a limit on how much I'd lend but I probably would. With my own brother, he has my nieces so while I might be hesitant to give or lend, it's not just him, it's my nieces that I'd worry about necessities for. I think as a general rule I would only give or lend what we would be comfortable to do so with our own bills etc.

Codypup · July 2014

I said nope in regards to your situation, mainly because it seems to be becoming a pattern, and as far as I can see, there is no plan to prevent the same thing from happening again. Has she tried to find another job?

I don't know whether I'd lend to family. First off, we really don't have that much to lend. It would probably have to be an emergency situation for me to break into my savings for a loan. And if I did, I wouldn't expect to get it back.

/tj -

I have an employee who's constantly broke and asking for more hours. I have heard sob story after sob story about her bank account. She'll post stuff on FB about her phone being shut off, or the water being turned off, and she'll come into work claiming she's starrrving because she has no money for food. ....but then 2 days later she'll come in with a brand new haircut, a huge new tattoo, and tell me about her weekend out at the bars, or her trip to Six Flags. It's hard not to judge, because I really don't know the circumstances - like did someone else pay for that stuff? Is she purposefully getting tattoos instead of paying rent? I have no idea.

It's her life and her money, but I had to quickly learn to detach emotions from it. Her financial situation is not my concern nor my problem as her boss (as callous as that sounds.) I schedule her as I need her, and not because I know she wants hours. It's HARD for me to detach, but I have to, professionally.

Anyway, I understand where you're coming from. It's hard to watch someone spend money on things you deem frivolous when you know there are bills to be paid and whatnot. That being said, it's technically now her money to spend, ya know? You lost control of that money the minute you handed it over.

I think you guys have helped her out a lot already, and I don't think it's awful if you decide enough is enough.

shellbell3845 · July 2014

I think when you loan money you have to detach from how it's spent and prepare for it not to be paid back. I have lent family money -- quite a large sum. It was almost three years ago, and repayment has not started. If I ever collect that money great. If I never see a dime of it? Well, I did the exact right thing in that situation.

boogerbearoriginal · July 2014

Ditto PPs that once you say here's the cash, it's out of your hands to determine how it's spent. It's hard to do, but if you don't feel she's being responsible and don't want to see the loan go towards non-essentials then you need to stop loaning her money.

Anytime I've ever given someone money, I do so only if I can be fine with it never being repaid. Otherwise, I tell the person sorry but I don't have X to give. Depending on the circumstances I may offer help with less $$, or in a non-cash way.

If you're becoming frustrated with her pattern of borrowing and late repayment then the best thing to do is say, sorry we can't loan you money right now. That's a better option than continuing this pattern that is only going to lead to further resentment on your part.

It sucks. I know how hard it is for me to say no to family.

Firefly9 · July 2014

Nope. This bank is closed. I don't lend ANYONE money.

dunvilles · July 2014

My thought is that you either let her borrow money or you don't. You won't change her habits of what she irresponsibly spends money on and you aren't helping her by allowing her to continue doing this.

It sounds like you and your DH are going to resent her for the choices she is making with her/your money.

We personally do not lend money to family bc it has led to bad feelings all around. The only exception would be if a HARD WORKING family member had a one time need. Not a repeated history of "needing money". (MIL has a nasty habit of running up her credit cards and debt in general. We do not, under any circumstances, give her money.)

sdlaura · July 2014

I am in the camp of only lending family members money if you're in the position to consider it a gift.

iwubrory · July 2014

Thanks everyone, there's a lot to her story but basically three years ago she quit her job and left her husband for some loser she met online, when that didn't work out she moved back with my in laws. Bills include insurance, iphone, credit cards, and tuition. She recently enrolled in a teacher intern credential program, that's what he gave her money for the last time.

I know $20 seems like a petty amount to get annoyed about but it's the principle. Same for the late payments, we don't actually need the money. We do expect that it isn't a gift though. To me, if you're strapped for cash, you don't spend what you do have on frivolous things. Seriously, you're crying to me about not having money and even with what I gave you, you're still going to be short on this month's bills, then why the f are you spending money to go play bingo? Still, I did question if I have the right to be mad about how she spends it.

@greenbunny79 I was in a similar situation to you. I completely supported myself while getting my BA. Then subbed while I was getting my credential. I still managed to pay rent, insurance, phone, car, and whatever else. I didn't spend money that I didn't have. The last time I borrowed money was when I was 17 and it was $20.

It looks like we won't be loaning her anymore money. I'll grow a pair and tell her no.

Meghan14 · July 2014

I'd lend to some of my family members, but not others. People usually behave as you expect them to, sad, but true. Under no circumstances would I loan my sister money. I'd pay a bill for her if needed, but it would be "giving" her the money, not "loaning". On the other hand, if my brother asked I'd loan him any amount he needed.

After reading your specific situation, I probably would not loan her money in the future.

inluv4life2 · July 2014

sdlaura said:
I am in the camp of only lending family members money if you're in the position to consider it a gift.

Exactly this.

gingerm84 · July 2014

I chose SS because I would give money as a gift, not expecting to be paid back. Otherwise, it can create a problem in the relationship, which to me wouldn't be worth it.

dunvilles · July 2014

My MIL has serious debt problems and called us sobbing about not being able to pay her bills and having to file for bankruptcy... etc. She wanted us to pay her bills until she could "get on her feet".

We offered the following:
1. Pay for Dave Ramsay financial peace courses
2. Pay for gas to and from the classes.
3. Take her to the grocery store to pick out food for the week and we would pay for it (no booze/cigarettes)
5. Pay for 10 sessions with a couselor/psychiatrist.

We gave her info on the Dave Ramsay classes (location, times, etc) and found 3 psychiatrists in her area that were willing to bill us directly for her treatment.

She was furious with our offer but has not asked to borrow money again.

hopefuldog · July 2014

@dunvilles‌, I think that is a FABULOUS offer!

I think I would have a pretty hard time being convinced that it's none of my business how the money I lent someone is being spent. And even if I paid a bill directly, I would still be annoyed with any money spent frivolously.

As PPs have said, I have worked very hard to be where I am at financially. I did not have a smart phone until recently, we still do not have DVR, we rarely go out to lunch during the week at work, etc.

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