The Less-Stress Guide To Money And Family

It’s A Relief If You Can Turn To Family In A Pinch—and You Want The Feeling To Be Mutual. But Money And Family Can Be A Combustible Mix, So Heed This Expert Advice.

- Melanie Mannarino

HERE’S THE FIRST RULE to follow when lending money to a family member: Assume they will never pay you back—and be OK with that.

And here’s the first rule to follow when borrowing money from family: For crying out loud, pay them back.

If everyone who ever borrowed or lent money followed those two rules, these next few pages could be filled with pictures of happy family members, smiling without a shred of guilt or resentment over their financial exchange.

Unfortunately, money always seems to get uncomfortably personal. “When you lend money, there’s a power shift in the relationship,” says Megan McCoy, PhD, a licensed marriage and family therapist in Manhattan, Kansas, and a board member of the Financial Therapy Association. “The lender becomes more powerful—you see yourself as more responsible. That puts the borrower in a one-down position, which can breed resentment.”

A typical family loan might go like this, says McCoy: Someone asks you for money. You don’t really want to give it—you may even have judgments about why the borrower is in this predicament—but you do anyway. Then you silently stew every time they show up at your house with a fancy latte or new shoes, and they act awkward and become resentful that you are “making” them feel uncomfortable (which may be more about perception than reality, but still). Next thing you know, months have elapsed, you’re still waiting for your money, they’re hoping you’ve forgotten about it, and there’s a rift in your relationship neither of you are happy about.