Things To Know Before Lending and Borrowing Money From Loved Ones

Before you loan or borrow money with loved ones, consider what could go wrong. When people you care about are involved, there's a lot more than money at stake.
  1. Debbie says:

    In my case, $1,000 is not enough nor is it enough for most people if they lose their job. I would think even in average times, it would take 3 months or longer to find another job with about the same pay. For me and my family, 3 months of loss of income of the highest paid breadwinner is needed at the minimum. Even with unemployment benefits, there are taxes to be paid on the benefit. We gifted money to our daughter who has medical problems and got into a high amount of credit card debt. This was a fresh start for her. She now pays off her credit card in full each month (if used) and only uses the cc occasionally to keep it active or when it’s the best way to pay (e.g., airline tickets, doctor bill, online shopping).

  2. Really insightful and some great advice. Another thing to note is that if things don’t go well and the relationship is strained or ruined, it doesn’t just impact the borrower and lender – especially in cases where a relative is borrowing money from another family. It then becomes a matter of taking sides and the whole thing turns into a mess.

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