Advice When Giving Money To Family Or Friends

If you plan on sending money to your friends and/or family members, there are many things you should know. You don’t want to send someone money and it end badly, such as with the relationship ceasing to exist. According to survey done by Charles Schwab, 40% of of survey takers expect to give monetary help to their parents, and 25% expect to give monetary help to their siblings.

Are you even able to help?

Before you automatically say yes to helping out your friend or family member, you should look at your finances and your budget and make sure you have the ability to do so. If you don’t, then this leads to the next point…

Try to help in other ways.

If you don’t have the money to help them out, or if you think it may not end well, then you may want to try to help your friend or family member out in a different way. Maybe you can see if you can help them earn extra money, find a job, help them around their house, help them with a repair or replacement, or something else along those lines.

If you do decide to help, have everything written out.

I will say that helping your family or friends out doesn’t always end badly. I have helped people out and it all ended exactly as planned. It’s a great feeling knowing that you can actually help someone out, and they appreciate it as well. Sending an international money transfer may greatly help them, and it is possible to do this.

Make sure you have everything written out before you send the money. You should have the amount loaned listed, the terms, when you expect the money back, and so on.

Consider it a gift it your mind.

If you are lending money, you should always consider the money as a gift in your mind because there is a chance you won’t get it back. This way you don’t rely on the money later because you may not ever get it back.

Image via Flickr by TaxCredits.net 


Comments

Advice When Giving Money To Family Or Friends — 1 Comment

  1. Great post, Michelle!

    Last year I wrote a post titled “Is it Possible to be Too Generous?” In that post I gave this list to help you determine if you might be too generous:

    – You dread writing the check.
    – You’ve helped a couple of times and now the person keeps asking for more.
    – You’re taking on someone else’s debt or expense and they have come to expect it.
    – You carry debt.
    – You feel guilty if you don’t help.
    – You’re angry that the person you are supposedly helping won’t change.
    – There is a riff between you and your spouse/partner because of the giving.
    – You have no time for family.

    Generosity is wonderful and when it’s good for you AND the person you are helping, it FEELS GREAT. But when it’s out of balance, it can hurt everyone involved.

    Thanks for the reminder!
    Ree

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