Thursday, July 14, 2011

Borrow Borrow

People keep asking you for small "loans" of money (that they will never pay back), what do you do - A, B, C, or D - which is your favourite answer, and why?

A - Tell them now is not a good time for us to be lending money. We are saving for the kids' college, retirement, or the like. But I am happy to help you get a bank loan or figure out a budget.

B - If the amount is small, I ask what they can do for me. Perhaps they can house-sit and take care of the family pet when you're away, or help paint the house, clean the basement, or build a deck? Sweat labor can pay you back as well.

C - I would tell my sibling that I won't be his or her finance company anymore, but that each of the previous loans is now a gift and that I don't expect repayment.

D - If I can afford to help (a family member), I feel it is my responsibility to do so. But rather than continue to get nickel-and-dimed, I would sit down with them and look at giving a lump sum for the year with no other asks allowed during that period.

Source: Lending money to family members, at CNN Money Magazine:

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