6 WAYS TO SET BOUNDARIES WITH FAMILY WHO ASKS FOR MONEY

In tough times, more people are asked to help out ageing parents, other family members and even adult children. For the sake of your relationships, you should set clear rules for this. Here are some suggestions.

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You can’t say no to family, because they are family, right? A 2020 study by the non-profit AARP found that a third of American adults aged 40 to 60 had given money to their parents in the previous year. It was mostly for groceries, housing costs and medical expenses.

Some also helped out their adult kids, but often for non-essential things such as travel money to come home for the holidays. Many of them couldn’t really afford it.

You can’t save everyone by yourself. So here are suggestions on how to be realistic and sensible about loans.

1. CONSIDER WHO’S ASKING
If the same person asks every month, or you get a lot of requests, it’s not healthy. Family can also start relying on you to help if you do it too often or too readily.

2. EXAMINE YOUR FEELINGS
Be honest. There’s no shame in admitting that you get frustrated or even angry when yet another person comes asking for money. Think about how it makes you feel. That could motivate you to take the right decision.

Now explain where you can help and where you can’t. Say for how long you can help out. Once they know, it may push them to find more affordable options for themselves. If you’ll be making personal sacrifices so you can help, they should know that.



3. HAVE THE COURAGE TO SAY NO
Don't hesitate or feel afraid to do so. Maybe you don’t want to hurt anyone’s feelings or be rejected in some way. If you don’t like confrontation, you might be scared that they will get angry or say you are selfish. Perhaps you feel guilty since things have seemingly been a bit easier for you.

Actually, the relationship might suffer if you do lend them money and you’re not paid back as agreed or the same person returns to ask for more. If the bond can’t withstand a polite “no”, it might not be a healthy one. So don’t base your answer on emotions.

Related article: Why you should never lie to your partner about money

4. DON’T BE THE ENABLER
Not everyone is smart about money. But someone who keeps making bad choices and then comes to you for help might be turning you into an enabler. If you’re always there to help, they won’t look for better ways to manage their money and you could become the victim of an abusive relationship.



5. LOOK FOR LASTING SOLUTIONS
The family member asking for money will probably say they don’t have any other choice. But there might be changes they can make to stay out of money trouble.

Sit down for a talk, especially someone who keeps coming back. Be honest about your feelings and own financial situation – that’s always best. Listen to the other person’s problem. Be kind when you react – don’t judge or lecture. Suggest that you look for a different solution together. Even if you’re no financial guru yourself, two heads are better than one.

Related article: Stretch your salary

6. DO IT THE RIGHT WAY
“There are no such things as loans among family and friends—they’re gifts,” said Mary C. Kelly, author of the book Money Smart. “They are a gift if you give or receive them and they are a gift if you get paid back.”

Financial experts all say you should never loan money that you cannot afford to give away. When you decide how much to lend, think if you’ll be okay if it’s never paid back. That may help you set a realistic amount. Also, ask what the money is for and the exact amount required.

To prevent misunderstandings and arguments later, write down the details of the loan and sign it with the lender. It should state your names, the amount, the payment terms and what happens if they are not met.

If you spend all your time taking care of everything and everyone else, chances are you’ll build up a heap of resentment and even burn out emotionally. Instead, take care of yourself first. Then you’ll be in a better position to help others.

Related article: Where is my money going?

Sources: https://askthemoneycoach.com, https://www.businessinsider.com, https://www.investopedia.com, https://capway.com, https://braveacorn.com