Dear Colette,
How do you deal with family members who are always (and I do mean always) asking for money but don’t always pay back the money borrowed? I’m one of six siblings, the one with the better job and no children, so my siblings think I’m rolling in money! Sure, I have my car paid for, but I still have a mortgage and am far away from maxing out my retirement plan. My siblings all have children and there is always an emergency and/or a good reason to ask for money.
I want to do the right thing and help out, but sometimes I feel they take advantage of me since they still manage to afford to go on vacations or host parties. I’ve never charged them interest, nor have they ever offered to pay interest. They usually make small payments (after reminders from me) and sometimes they don’t pay the entire amount back. I feel embarrassed when I have to remind them to pay back. Shouldn’t they be the ones who feel embarrassed? Please help!
– “Loving but Frustrated Sister”
Loving but Frustrated Sister,
You are not alone in feeling your family is taking advantage of your generosity given the circumstances you outline. Yet, your behavior allows them to continue this pattern of borrowing without concern about payback. After all, the only consequences your relatives experience is your gentle reminders to pay them back. I’m all for helping another person out of a tough situation, but you describe a pattern which means your relatives haven’t changed their ways, but simply continue to make poor choices knowing you’ll bail them out. It’s time for some tough love.
In the future, I encourage you to do either of the following:
1. Stop all loans. The next time you are approached, simply say, “I’m uncomfortable lending money moving forward.” You don’t have to explain your reasons. If pushed, simply say, “I understand that you need money, and you’re going to have to find another source.” If they continue to push, stay firm and say, “I don’t expect you to like my answer, but please respect my wishes.”
2. Set up a contract and hold them accountable. Before lending money, create a paper trail that also reflects an established payback plan. This may be a small amount every two weeks. Feel free to add interest and late fees. Sit down with the borrower and clearly outline your expectations. Discuss what will happen if they don’t pay you back in a timely fashion. Explain they are responsible for honoring dates without being reminded, and if they agree, ask for their signature and provide them a copy.
Although you may feel a tinge of guilt in the beginning, keep in mind you are not being selfish, but creating healthy boundaries. We teach people how to treat us, and it’s time you receive the respect you deserve from those that claim to love you. It’s time your family learns to live within their means.
