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I gotta' admit that I do not always agree with all that Dave espouses, but I'm with him 101% on this one. Loaning money to friends and family is pretty-much the best way to create a problem where no problem should exist.
Dear Dave,
We’ve been following your plan, and it’s been a real blessing to us. Last week, my mother-in-law told my husband that they haven’t paid their property taxes yet - $3,000 was due in January. I love my in-laws, but they’re big spenders. They’ve got plenty of money and love to take lots of trips. We make good money, too, and could help them out, but we’re afraid this may be just the tip of the iceberg. What’s your advice on handling this?
.......
Part of Dave's reply says....
I’ve got a feeling that mom and dad didn’t raise their son to have dessert first and then eat his vegetables, but that’s exactly what they are doing. They need to pay their property taxes before they go running off on a bunch of fancy trips. From what you said, they’ve got the money to take care of what needs to be done and have some fun, but if they don’t correct their course, they’re liable to have their financial dignity stripped from them.
http://finance.townhall.com/columnists/DaveRamsey/2009/03/30/beware_of_loaning_money_to_family
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Never a borrower or a lender be. That's about the best advice I ever heard but I didn't heed it. With family and friends it changes the whole relationship. I borrowed from my sister before and wish I never had. It was short term and was paid back fully. Even once it's paid back, you'll both always have a feeling of obligation. The borrower has because the lender was good enough to help them out and the lender because they said yes once feels they can't say no another time.
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Never a borrower or a lender be. That's about the best advice I ever heard but I didn't heed it. With family and friends it changes the whole relationship. I borrowed from my sister before and wish I never had. It was short term and was paid back fully. Even once it's paid back, you'll both always have a feeling of obligation. The borrower has because the lender was good enough to help them out and the lender because they said yes once feels they can't say no another time.
It's completely different when you pay it all back. I don't think your sister thinks about that nearly as much as you obviously do. Now if you'd borrowed money and never returned it, nor ever mentioned it again to say why and what you were doing to try fix that ASAP, that would annoy your sister.
I gave my little brother money to help him get a car when he needed one for a new job and he's never paid me back. It was only $700 but I'd told him it wasn't a gift and to pay me back when he could. He was going to be earning and I thought he'd pay me a bit every month. I've not seen a penny. I won't ask him because I know I'll go ballistic when we talk about it. He broke my trust and it was money I'd taken a long time to accumulate. At the end of the day I'd rather have a brother that owes me and hope one day he'll give me that back than one that never speaks to me again.
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Pennywise, little brothers always stay little brothers. I have one too and I'm the one he runs to with problems or needs advice on how to sort out his life. It's cute at 13 and stops being cute after 30. I know if I lent mine money he'd not hear me say it's not a gift and would do the same thing as your brother's doing. He wouldn't take me seriously.
I blame myself for giving him so much when he was a kid and I was of working age. He relies on me too heavily for an adult. You not giving him a set payment arrangement, however loose, he'll translate as "doesn't matter if I get it or not." I guessing how he's looking at the loan but they sound like two peas in a pod and I know mine would see it like that.
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Several years ago DW and I decided that we wanted to buy a new Camry to replace the 10 year old Corolla that she was driving. Instead of trading it in for about $4K, we transferred the title to our son who had just graduated from college. I told him that it was his responsibility to repay us for the car at an agreed upon price of $3500 whenever he could afford to do so. I really did not expect him to ever pay us for the car. He is still driving the car now, but is in grad school with only a PT job.
It makes me happy to know that I got him a good car that has given him no trouble and is very economical to operate. That's my payback.
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Several years ago DW and I decided that we wanted to buy a new Camry to replace the 10 year old Corolla that she was driving. Instead of trading it in for about $4K, we transferred the title to our son who had just graduated from college. I told him that it was his responsibility to repay us for the car at an agreed upon price of $3500 whenever he could afford to do so. I really did not expect him to ever pay us for the car. He is still driving the car now, but is in grad school with only a PT job.
It makes me happy to know that I got him a good car that has given him no trouble and is very economical to operate. That's my payback.
I can understand where you're coming from, micharch. I have the feeling you'll have instilled a good attitude towards money in your son by your own sensible approach to it and you'll see every penny back. :)
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I loaned my sister money years ago and she paid it back monthly. She never missed one payment. I don't think it changed our relationship. I'm curious though whether she thinks that it did. I must ask her now I've read this thread. I don't feel obliged to do it again, maybe because I don't have it to give anymore LOL.
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Several years ago DW and I decided that we wanted to buy a new Camry to replace the 10 year old Corolla that she was driving. Instead of trading it in for about $4K, we transferred the title to our son who had just graduated from college. I told him that it was his responsibility to repay us for the car at an agreed upon price of $3500 whenever he could afford to do so. I really did not expect him to ever pay us for the car. He is still driving the car now, but is in grad school with only a PT job.
It makes me happy to know that I got him a good car that has given him no trouble and is very economical to operate. That's my payback.
Great story, micharch. Your son must have been thrilled to get the car. Do you make him pay the insurance etc? When my Dad bought me my first one, that was the condition. I paid for all the other expenses that went along with ownership and he paid for the car. That taught me a good lesson about hidden costs.
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Do you make him pay the insurance etc?
I don't make him do anything as he is over 18 and considered to be an adult in our society. He assumes all up-keep on the car, in fact we have never discussed the matter.
I don't understand why the parents didn't pay the property taxes first before taking trips. Who are they wanting to impress with their lifestyle? I agree with his reply.
Show me your garden and I shall tell you what you are. - Alfred Austin