![]() ![]() More than half of all millennials received financial support from their parents last year, with millennials who are parents themselves receiving more than $11,000 annually in unpaid labor and financial help. If your parents are open to making an estate plan, provide the name and contact details of a trusted estate planning lawyer. While tackling these topics is inevitably uncomfortable, many experts recommend having several brief conversations addressing specific issues rather than one long talk.įocus each conversation on specific goals - like making sure your parents have a plan for long-term care - and be ready to point your parents in the right direction if they need help but don't want it from you. You'll also need to be prepared to step in if they become incapacitated, and you'll have to cope with cleaning up their financial situation after they pass on. Talking to your aging parents about their money situation is important to make sure they're not falling victim to scams or living outside their means and at risk of running out of cash during retirement. Talking to aging parents about their financial situation You may want to include a clause in the agreement specifying your relative won't ever ask you for money again if the loan isn't paid back. If you're considering saying yes, insist upon a formal written agreement detailing the amount owed and when and how it will be repaid. ![]() If you're unsure, don't be afraid to say you need to think about it and that you'll get back to your relative at a later time. You can offer to help in other ways, like assisting the would-be borrower in setting up a budget of their own. ![]() If you can't afford to lose money, politely decline by explaining that a loan is just not in your budget right now. When money is leant to friends or family, the chances of repayment in full aren't high: Lending Tree found that typically only 57% of the balance due on loans made to family members ends up getting repaid. ![]() If your family member comes to you with a request for cash, you have a difficult conversation ahead of you - and a difficult decision to make. A family member asking to borrow money from you Politely say thank you anyway and move on, as you never know if your family member is facing financial troubles of their own. You'll also need to be prepared to accept a no if your family member isn't willing or able to provide financial help. While close to 95% of people surveyed by Lending Tree said they wouldn't charge interest when lending to a family member, making the offer shows you're serious about treating this as a business transaction. Explain why you need the money and offer to write up a formal agreement to repay the loan on a set schedule with interest. Create a budget to determine exactly how much you must borrow and what your repayment timeline will be. If you must ask to borrow money, come prepared with a plan. Borrowing from family could be your best or only option if you aren't able to qualify for other financing or don't want to pay high borrowing costs. More than a quarter of Americans who borrowed from family members report negative consequences like hurt feelings, resentment, and arguments.ĭespite how fraught with problems these transactions are, three in four Americans admit to borrowing money from a relative sometime during their lives according to a recent Lending Tree survey. Lending money to a family member can put your relationship on the line. Asking to borrow money from a family member ![]()
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