Should You Mix Family and Money?

Is it ever a good idea to mix family and money? Consider these factors before lending money to family to save you from regret, resentment, and frustration.

One of the most sensitive topics in personal finance is whether or not you should lend money to family.

On one hand, you have people who say family is family no matter what. In tough times and good times, you should help each other out.

On the other hand, you have people that have been burned (sometimes repeatedly) by their families, to the point where they’re jaded and cynical about it.

So, is it a wise idea to mix family and money? Let’s take a look at some things you need to consider before you do so.

Why do they really need the money?


You need to look beyond the initial reason of why a family member has asked you for money. They may be unemployed and can’t afford their bills, but that probably doesn’t give you the whole picture.

Are they actively looking for a job, or are they sitting around waiting for an opportunity to fall into their lap? Are they trying to learn new skills to bolster their resume, or perhaps start a side hustle? Or are they not taking any action to better themselves?

The same goes for family who are working, but don’t have enough left at the end of the month for groceries. Are they managing their money well, or are they being wasteful with it?

There’s a huge difference between lending money to someone who’s busy throwing themselves a pity party and lending money to someone who’s genuinely trying their best to make it work.

I think it makes more sense to lend to family members that are putting forth the effort needed to see results. There are times when, through no fault of our own, we get dealt a bad hand.

While you could make the argument that they should have prepared by having an emergency fund, sometimes the money saved isn’t enough to cover expenses, especially when it comes to things like hospital bills.

Will You Be Resentful?


A lot of people recommend “gifting” money as opposed to lending it. This way, you don’t have any expectations of having it paid back.

That can be a good idea in theory, but how often does it work out? You might think you’re okay with giving your money away, but you might become more judgmental toward your family member in the process. You’re going to care about how they spend the money because it’s yours.

If you see them making one financial mistake after another, you might get frustrated. This could lead you to feel like you made the wrong decision, which can then lead to regret and resentment.

Is it possible to give money with no strings attached? That’s up to you to decide.

How Will the Other Party Feel?


It’s also worth taking a look at the other side of the equation. While the family member lending the money technically has “more to lose,” that doesn’t mean emotions aren’t running high on the other side.

This doesn’t apply to everyone, but some people have to hit rock bottom, before they sacrifice their pride and ask for help. In many cases, asking for money can feel like admitting defeat and failure. It’s not a fun place to be.

While the family members helping out might feel good about their decision, the family members on the receiving end might not. They may feel indebted to you forever, or feel awkward being around you.

Imagine for a second that you’re a parent asking for help from your child, or that you’re asking a family member that’s younger and (possibly) more successful than you for money.

It can seriously strain a relationship.

What’s Your Financial Situation Like?


I know there are some people out there who would give you the shirt off their back, no questions asked.

Unfortunately, that’s not exactly a financially sound strategy, when considering lending money to family. You don’t want to help someone out only to need help yourself down the road!

Carefully consider the financial implications you’d be facing if you were to help a family member out. Don’t automatically say “yes” even if your heart is telling you to.

If, after evaluating your finances, you think it would be safer to say “no,” then explain to your family member how you arrived at that decision so it’s not as painful. Hopefully they’ll be understanding.

Additionally, a lot is going to depend on how much you’re being asked for. Five hundred dollars could be a drop in the bucket to some, and would set others back by a lot. Whatever you do, don’t go into debt to help others. Only look at your available (liquid) funds.

A Few Anecdotes


This topic has been on my mind recently as some of my family and friends have been sharing their experiences with it.

Story #1: A family member gave relatives a large lump sum because they were experiencing financial hardship.

They were behind on their mortgage and HOA fees, their credit was suffering, and they were at risk of getting kicked out of their house. They’re living on a fixed-income.

They had been trying to find jobs to no avail – they retired to a place that’s peaceful and quiet; not exactly a good city for job opportunities.

The family members who lent the money have been fine with their decision, though I can’t help but notice it might have put a strain on the relationship from the other side. I don’t see them as often and they don’t seem to communicate as much as they used to.

Story #2: My friend’s parents converted their basement into an apartment for his sibling. Unfortunately, his sibling skipped several rent payments (inherited some money, gambled it all away), and his parents decided to kick him out.

They’re still several thousand dollars in debt from the renovation and live paycheck to paycheck. The apartment is a mess and can’t be rented out.

Story #3: Another friend has been helping his parents afford to move to a home they inherited. He has footed the bill for a few costly expenses, and it’s coming straight from his savings.

He’s not currently employed, and the process is moving slowly. They’re not sure when they’ll actually be able to move in, and there are more expenses to come.

Is it ever a good idea to mix family and money? Consider these factors before lending money to family to save you from regret, resentment, and frustration.

What’s the Takeaway?


As you can tell, in each of these situations, the person’s heart was in the right place. They just wanted to help.

Unfortunately, in some scenarios, helping can be more complex than just lending money.

That’s why it’s incredibly important to consider the end results beyond the transaction. Everyone wants a win-win situation, but can one be achieved?

Take time to sit down and think things through. Discuss everything with your spouse or partner if you have joint finances. Figure out how this will affect you (emotionally and financially), the other person, your family dynamic as a whole, and what kind of precedent this might set.

There’s a lot of grey area here considering everyone’s situation is different. Do what’s best for you and your family as long as you consider your own needs first.


Have you ever mixed family and money before? How did it go? Are you against helping family monetarily? Why or why not? What do you think about giving the money as a gift vs. loaning it to family members?

If you enjoyed this post, please consider subscribing to the RSS feed.
The following two tabs change content below.
Erin M. is a personal finance freelance writer passionate about helping others take control over their financial situation. She shares her thoughts on money on her blog Journey to Saving.


  • Carolyn says:

    Don’t loan , if you can afford give some ,I have given many times , bottom line a few appreciated the help , one resented the gift and more than one looked for more help –

  • That story number 2 is really hard, I also know someone who had a hard time with their son. Their son borrowed a money from his parents for a car down-payment and now their son refused to pay his debt from his parents.

    • Erin says:

      I don’t get that. It’s so disrespectful. Regardless of if they’re your parents, that doesn’t mean you’re “entitled” to the money.

  • One it comes to family and friends, when lending them money I have always had one rule. Just give what I can personally afford at the time without expecting anything in return. It works and no drama to clean up.

  • Hannah says:

    This is a really interesting conundrum, especially when it comes to the parent/child relationship.

    One of my brothers has a social disorder that might make it difficult for him to find good paying jobs in the future (even if he completes a college degree).

    Throughout the last several years, my parents have given him money for living expenses (a gift, not a loan), but they always make a contract about behavior expectations. Even though this seems weird, I think it’s something that I would copy if one of my own kids had a similar problem.

    • Erin says:

      That’s a really interesting way of approaching it. I definitely think it’s a good idea to set expectations, depending on what your relationship is. That may be the best way to avoid any drama after the money is exchanged.

  • I have a loan from my parents and I struggle with it sometimes because while I don’t want to leave them to the last of my debt payoff plan, they don’t charge me interest and I still have debt with very high interest that I want to pay off first. It’s hard. I do pay them some every month so they don’t feel slighted – I hope they know I’m trying my best to get them paid off along with my other debts.

    • Erin says:

      Yes, it’s definitely hard when you’re prioritizing your other debt that’s actually costing you more. I would do the same. I’m sure they know, though! They just have to look at all the progress you’ve been making.

  • I think it’s possible to mix money and family/friends but you have to go into it with the lowest expectations. Expect to never get the money back. Expect that they’ll likely squander your gift (I mean that’s probably how they ended up needing help anyway). Low expectations is to key to avoiding disappointment.

    • Erin says:

      I think that applies for most things in life, Thomas. 😉 I know that sounds cynical, but that’s how I try and approach certain things!

  • I give what I only can share. Nothing more, nothing less. I have learned from others that we should not take a loan to help them in a way that we put ourselves in debt because of them. When I give money, there is really a feeling that my money would never be paid back. That said, I would be more thankful if it comes back. If it is not, it’s fine with me, depending on the amount.

    • Erin says:

      I agree – it’s never a good idea to voluntarily put yourself into debt to help someone else out. We have to look out for our money!

  • This is such a difficult thing to balance. Whenever I have loaned money to family in the past, I never think of it as a loan, I think of it as a gift. If I get something back, great, but I never have the expectation. If you have the expectation, you just build up resentment, especially if you never get paid back.

    • Erin says:

      It seems like having realistic (or no) expectations is the key to gifting money successfully. It can just be tough to detach yourself from the situation once the money leaves your hands.

Leave a Reply

Your email address will not be published. Required fields are marked *