The Family Bum: How to deal with family members who constantly ask for money - Page 2

If you do loan money to family

Consider the reasons for borrowing:  Before you loan (or give) money to family, you should consider why it is being borrowed.  Is the person borrowing the money generally responsible or is he or she a bad money manager.  If the borrower is usually responsible and has just had a bad set of experiences, you might feel more inclined to help out. 

Don’t respond to guilt or manipulation:  When you think of family bums, parents are not usually who you think of.  But parents are not only borrowers, but they are also some of the most effective family borrowers.  Liz Pulliam Weston, MSN Money contributor and author of Easy Money,discusses this phenomenon in her article, “Should you bail out spendthrift parents?”  Sometimes this is because of cultural reasons, for example immigrants sending money back home to their parents, but other times it is simply a matter of parents having a sense of entitlement.  They might feel that parents are supposed to look out for their kids when they are younger and in return the kids should look out for them when they are older.

Don’t loan money you can’t afford to lose:  You should not loan money to someone that you can’t live without.  If you can’t afford to lose the money, don’t loan it.  Plain and simple.

Document the loan:   If you do decide to loan money to a family member or friend, draw up a contract and make it official.  You don’t have to hire a lawyer for this, you can find legal documents at www.nolo.com  or other sites that you can print out and use.  If the loan is for a large amount, it would be best to consult a tax advisor and get legal counsel. 

Set up a loan through a social lending company:  You can also consider setting up a loan through a social lending site like ZimpleMoney.com.  Zimple Money is a website that sets up loans between family and friends.  What is great about using a social lending site, is that they take care of the collection process, eliminating some of the stress from family lending.  This way you can visit family functions without feeling like the family bill collector.

0
No votes yet
 

1 comments

By Caerus on 01/22/12 at 4:34 pm

We don't believe in credit, so we don't loan money to family, friends, or anyone. If we can afford to help someone, we will just give them the money. Ot  ...

Sign in to leave a comment!

Today on JustMommies

When Your Teen Doesn’t Want to Go to College

Justin just isn't ready for college. He's not even sure if he ever wants to go to college, and tells his mom "No, not interested." What would you do if he were your child?

Baby Names from the 80s

What were you doing in the 80's? Moon-walking with Michael? Playing Pac-Man on your Atari?

P

From the Message Boards

Readers and Writers

Bookbub?

Anyone else use bookbub?! Its a website that offered free (and cheap) e-books. The books are pretty...

Siggy Pick Up

Sweetpea24~ requested

Here you go, hope you like it, sorry it took a while...

Military Mommies

Holy Typhoon!

Sorry I havent posted lately ladies! We had a horrible typhoon hit a few weeks ago and we've been w...

Siggies R Us

New Siggy Please!! Have two little boys and expecting a girl in November!

Here is a picture of my two boys and our little lady :)Jackson 4.17.11 Grayson 7.8.13 Baby Sister 11...

Stay At Home Mommies

Really Back

I'm temporarily back to being a SAHM. I'm transitioning between jobs, so I'll be around more and hop...

» Check out the friendliest message board for moms and moms-to-be!