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Money Between Family Members – There is a Better Way
Borrowing and lending between family members is a no-no regardless
Generally speaking, most of the time if there’s a request to ‘borrow’ money from another family member, it’s because of some sort of need, right? Those needs might include financial assistance due to a reduction in income, an illness, or some other situation. On those occasions, there’s a simple and straight-forward solution. First, don’t borrow and don’t lend money from or to another family member for such needs. Does that sound cruel? Maybe, but there’s actually a better way to handle such things. But, again, the solution is not a lending and borrowing relationship between siblings or family members.
When needs arise, you have an opportunity and duty to offer generous assistance with no repayment expectations
The better solution is that when such temporal needs arise, and they surely will, you should step up, and be the first to offer assistance, free assistance, generous assistance (to the extent you can), with absolutely no lending or borrowing arrangement between the family members – period – ever. If you are the one in need, it’s okay to communicate openly about your basic needs so that others are aware there’s even a need in the first place. It’s also okay to ask for assistance. If there’s a need in the extended family, look at it as your opportunity to provide loving and free assistance to another family member. Then, freely give the assistance if you can or want to. If you are unable to do so or don’t want to assist at that time, then it will be what it will be. Tunabudget firmly believes that extended family members have not only an opportunity to assist family members, but a moral obligation to do so as well. They’re family, and you have a duty to help if possible.
Generous assistance is always a gift with no repayment expectations
If you end up giving money or resources to a family member in need, consider it as a total gift, and be sure to communicate this with the family member and make certain there is no expectation of repayment whatsoever. Family members need to all understand that you have each other’s back.
When a gift is repaid by another gift
Now, life generally doesn’t keep one down forever. People rebound. And when that time comes for the family member that was gifted assistance, there’s nothing that says that this person couldn’t offer his own gift back to the family member who gifted it to him in the first place. It’s entirely likely that the offer would not be accepted because the original gift was just that, a gift. They probably will want it to remain as a gift so they can enjoy the sweet memory of love. The repayment of the gift could be potentially used to ‘pay it forward’ to the next family member in need, as needs always arise.
When family is not close, your attitude can change that immediately
Maybe you’re saying that your family really isn’t all that ‘close’. That’s sad. There are countless opportunities to extend love and brotherhood or sisterhood to a sibling. It doesn’t have to be that way, right? If you wanted or desired to have a close family, how could all this talk of giving make any difference since, perhaps, no one is talking to each other let alone helping each other? Do you want to make your family close? One way to do that is to be aware of another family member’s needs, and freely give assistance to fill those needs without being asked. Frankly, don’t get bogged down in the weeds on overcoming all the family problems – no need to go there with all the drama, just let it go. All you have to do is: “you gotta wanna”. Change your attitude, and doors will open to many wonderful loving family relationships. If you don’t ‘wanna’, your heart will never be open and you will miss out on rich and joyful experiences. Life’s too short. You gotta wanna – so go do it.
Set the ‘gift’ expectation standard with all family members
Choose to make your family closer. Teach each other that in your family, you have each other’s back. Tell them family loans don’t exist. If you want to give someone money, there are no strings attached, whatsoever. There are no expectations of repayment, and tell them to just ‘pay it forward’ when another need arises if they’d like. They all need to know that a gift is a gift; gifts are a blessing because you had it to give in the first place. You made the gift out of love and sacrifice. It’s a real blessing in your own life to have been able to share and express your love for your family member. There never was any expectation of repayment in the first place when it was given – it certainly was never a loan.
Investments between family members is generally discouraged but should be done with no strings attached in case something goes wrong
Now, what if there’s some other non-need, but investment opportunity, and you want to borrow money from a family member. Most of the time this would still be discouraged, but some thought and consideration should also be given for the deal as both stakeholders may have something to gain - but there is risk here. For example, what happens if monies were exchanged between family members and the investment fails to materialize due to some unexpected event. Say the monies cannot be repaid according to the expected terms or the venture fails. People’s feelings can be hurt pretty quickly, and it could lead to ill-will towards each other as is so often the case. So, it may be best for the person who is willing to invest or lend the money, to lend it free of any repayment terms altogether. What, you say? Yes, you heard it right. Go ahead and consider making a deal, and even talk about the repayment terms, etc., but just realize that if something bad happens, you are perfectly happy to walk away and let it go if you don’t get repaid or if there’s no return on the investment. Basically, if you’re not willing to just forget about being repaid if it doesn’t work out, it might be best to not make a deal or lend the money in the first place. The last thing anyone wants is to injure a family relationship. No amount of money is worth doing that.
Absolutely no ill-will between family members
In any event, when family members have needs, freely step up and offer assistance. Tunabudget believes it is the right thing to do. There should be no loans between family members. If you don’t have the money to help out with, then don’t offer any. As for repayment, if an opportunity comes later on to ‘repay’ the gift, feel free to offer the same, but it probably won’t be taken because it was a loving gift in the first place. On investment or business opportunities, make sure if you lose your money, it’s completely forgiven - in the first place. Things happen, and no amount of money is worth any ill-will between family members.
CANDID QUESTIONS
Is your family close enough, including your siblings, that you are aware of their financial well-being?
Are you sufficiently self-reliant such that you might have the wherewithal to offer financial assistance to a family member should the need arise?
Are you willing to offer your assistance as a ‘gift’ to a family member with no strings attached, or expectation of repayment?