Family Handouts

There's a good thing about calling it a gift: you can say it like Don Corleone on the day of his daughter's wedding.
 
Have a family member who borrowed a few thousand some years ago to get current on his mortgage and to do emergency home repairs, however over time his memory has converted it into a gift. His family makes twice what we do and he knows it - and I'd hoped even if he somehow did convince himself it was a gift he would voluntarily repay it. It's not going to happen.

For me it would be easier to say "no" after ER than while working - "I won't have any more income and need to live 30 years just from our savings - so I can't wreck our budget."
 
I feel lucky. Mom and my siblings are all doing well so it has never been an issue for our family.

I have a friend who I loaned $3k once so he could get rid of his low-life, two-timing then wife and make her his ex. While I got paid back within 18 months, even if I hadn't it would have been the best $3k that I have ever spent.

I've also loaned DD money on a couple occasions so she didn't have to liquidate investments to meet an immediate liquidity need, and was promptly paid back in both cases.
 
Hamlet said:
....When I get together with that side of the family, my dad and my uncle still make me fight to pay for anything. I will always be the broke college student in their eyes :)
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+1 I finally have given in to Mom on things like this. She has plenty, so the way I figure it, incrementally, each time she pays for dinner that my 4 siblings pick up 80% of the tab. :dance:
 
MichaelB said:
...is the sense to some that being retired means we have more free time and that fairness somehow dictates that it should be available for their use.
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One SIL is like that. She's never asked us for a loan (she knows better) but has borrowed from the other SIL, who has never been paid back. But she has referred to us as "cold and calculating" I guess because we worked and she didn't.

The daughter of one of DW's friends is like that too. Now matter what, no one can ever do enough for her.
 
travelover said:
No such thing as a loan to family, it is a gift that occasionally gets paid back.
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Bamaman said:
But don't ever expect to see any payback in full. Those requiring help often don't have the capacity and character to fulfill their promises.

I'd rather just give'em the money and have no expectations. If they do pay me back, those are the relatives I'll take care of later in life. Otherwise, I'm of no further assistance.
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I "lent" my nephew a couple of grand when he asked recently, to get over a difficult patch/injury. We agreed it was a loan, but my terms were "Pay me when you're able." If I don't see it again, it means he isn't yet able. In my mind, it was a gift, but if he can pay me back when he's on his feet again (literally), that works for me too.
 
People have asked me for the loans and never paid back. I also gifted money to others. Neither is good IMO. Gifting can lead to more "gift" expectation from the recipients. When I RE, I will likely use the line that others posted already: my money is tied up, I am on fixed income, etc..
 
Thanks to all that answered the call. Sounds like if there is a circumstance, someone will figure out how to take. Hate to say it, but we'll be on guard. :)
 
I have only been asked one time by family for a $1,000 loan. This was many years ago before retirement and we were paid back, no problem. I have also loaned money to a friend and was also paid back.


The bad experience was not me, but my now departed Dad. Over the years he had made loans to members of his large family and to friends, and I always assumed was paid back. That is, until be made a fairly large loan to one of his nieces. I am guessing in the range of $2,500. I am sure the loan was accompanied by words along the line of, "no rush, pay me back when you can". However, my Dad was fully expecting to be repaid and not about to write it off as a gift. After several years without receiving repayment of the loan Dad started to complain about it every time I visited him. My sister and I both suggested to Dad that he just write it off, but he never could.


Lesson learned for both my sister and me, never loan to family, just gift it if you feel it is justified and you can afford it.
 
Tom52 said:
..............
Lesson learned for both my sister and me, never loan to family, just gift it if you feel it is justified and you can afford it.
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It is not just the money lost, but it's the deep rifts that develop in families, starting with the borrower and the loaner, then the rest of the family as they take sides.
 
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My DD is about to learn her handouts are over and the only thing she can hope for is a handup with conditions. Despite repeated warnings she failed to get her schooling done in 4 years, and once it was apparent last year she would not graduate in 4, she did not heed my advise to apply a year early for federal loans. Now she has found out they will only loan her half what she needs ( oh and I had to jump her to beat the deadline this year by only a week). She now needs private loans to secure rest of money. Ex and I mutually decided, no cosigning until you get a summer job and secure one for the school year. We told her bank institutions consider you a credit risk thus needing a cosigner. We consider you one also based on your aversion to work menial normal college jobs.
This could get interesting!


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Years ago, when I was still in college, my sister paid for me to attend a wedding. The cost was not great, but she didn't have much to spare. She never asked for repayment, just what one does for family. Fast forward 20 years, she was in need, and I gave her $10k. She still puts it on her balance sheet as a debt, but I am not planning to be repaid. When she needs things, I try to help her out (sometimes cash, sometimes advice). It is how my parents raised us, take care of family and they will take care of you. She will pay me back some day (when my parents are both dead, I suspect), and I probably will tell her to give it to my sons since they will likely need it more than me.
 
Taxman59 said:
Years ago, when I was still in college, my sister paid for me to attend a wedding. The cost was not great, but she didn't have much to spare. She never asked for repayment, just what one does for family. Fast forward 20 years, she was in need, and I gave her $10k. She still puts it on her balance sheet as a debt, but I am not planning to be repaid. When she needs things, I try to help her out (sometimes cash, sometimes advice). It is how my parents raised us, take care of family and they will take care of you. She will pay me back some day (when my parents are both dead, I suspect), and I probably will tell her to give it to my sons since they will likely need it more than me.
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In a give and take scenario I certainly agree. My siblings have never asked for a loan but if they did, I would certainly trust them and hope vice versa as well. As far as my daughter goes.... No more fish, its time you got the pole handed to you instead...... Go catch some yourself now.


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stlguy57 said:
Was wondering if anyone had an increase of family members, both near or far, approach you after you've early retired looking for a loan cash gift?

I'm 58 and will be ER'ing later this year and I think it's likely this may happen here at least once. If you walk out early and not take SS, some will think your flush with unlimited funds.

Just wondering. Thanks.
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How will they know if you don't take SS if you don't tell them, just wondering....
 
Mulligan said:
My DD is about to learn her handouts are over and the only thing she can hope for is a handup with conditions. Despite repeated warnings she failed to get her schooling done in 4 years, and once it was apparent last year she would not graduate in 4, she did not heed my advise to apply a year early for federal loans. Now she has found out they will only loan her half what she needs ( oh and I had to jump her to beat the deadline this year by only a week). She now needs private loans to secure rest of money. Ex and I mutually decided, no cosigning until you get a summer job and secure one for the school year. We told her bank institutions consider you a credit risk thus needing a cosigner. We consider you one also based on your aversion to work menial normal college jobs.
This could get interesting!

Sent from my iPad using Tapatalk
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Sometimes the kids need a gentle or not so gentle push to bring them into reality . I know my daughter did and it has worked out fine .
 
Mulligan said:
In a give and take scenario I certainly agree. My siblings have never asked for a loan but if they did, I would certainly trust them and hope vice versa as well. As far as my daughter goes.... No more fish, its time you got the pole handed to you instead...... Go catch some yourself now.


Sent from my iPad using Tapatalk
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My sisters believe in the give and take scenario - where everyone else gives, and they take. They know better than to ever try that routine with me, however. I would shut them down before the words were out of their mouth. The only reason they have money issues is because they live far beyond their means. One of these days reality will come knocking at their doors, when they finally exhaust all the suckers who fall for their "poor me" routines. :nonono:
 
I haven't had any loan requests yet but I've had my siblings introduce me to other people as there rich brother. I'm not rich but certainly financially secure and it made the introduction very awkward.

I come from a large family and most of them live paycheck to paycheck and retirement is only a dream. Sort of weird to say this but at times, I feel out of place at family gatherings because of our secure income.

Arriving at a family members house driving a new car or maybe after returning from a fancy vacation isn't easy. I'm forced not to say anything about purchases or vacations simply because of the friction.
 
I haven't ever been asked for a loan except once 30 years ago after I had offered a loan the day before. My brother was unemployed with a wife and two kids so I asked if he needed a loan, he said no then the next day his frig broke. He paid back with interest as soon as he could.
Now I am in the gifting mode, my dad gifted us money 30 years ago and now we are the older generation. I have given 7-10K each to nieces and nephews or great nephew, they know better than to ask and would starve first. I enjoy it and they know it is a gift I wouldn't let them treat as a loan. I try to give when it would do some good like when they want a house or going to college. Last year I gave the 19 year old 10K to his college might do it again, or not. He is now working two summer jobs and has a school job but is acting like it is ok to just borrow whatever it takes for tuition so I think he might waste any help and just borrow and spend. I will hold off to see how he matures, maybe nice graduation gift.
 
travelover said:
No such thing as a loan to family, it is a gift that occasionally gets paid back.
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I agree with this. I also feel, based a lot on what I've learned on this forum, that I need to keep my net worth to myself in order to avoid being asked for money in the future.
 
freebird5825 said:
Polonius had it right way back when. Hamlet, Act I, Scene 3.

Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.

:cool:
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quote_img.gif
Quote:
Originally Posted by travelover
No such thing as a loan to family, it is a gift that occasionally gets paid back.


And as the other wise sage - Judge Judy - often says, never lend money to friends or family. If you want them to have some money, give it to them without expecting repayment. Otherwise, the "lender" somehow becomes the bad guy when asking for repayment.
 
And as the other wise sage - Judge Judy - often says, never lend money to friends or family. If you want them to have some money, give it to them without expecting repayment. Otherwise, the "lender" somehow becomes the bad guy when asking for repayment.
[/I][/QUOTE]

We made the mistake of lending to a deadbeat BIL. The week before Christmas he gave me his first check as part of a monthly payback (10% of the loan amount per month).

Now, I had the choice to of taking money from him the week before Christmas or saying "hey, it's Christmas, pay me later".

I just knew that if I didn't take the money, he'd feel perfectly fine with not paying me anything more. In his mind, he'd be off the hook completely. "You said 'never mind'..."

I took the check; never saw another dime! And yes, I was the bad guy for taking money the week before Christmas.

I was out the loan amount either way (and knew it at the time) but at least I got one payment!
 
OTOH, one could turn a negative into a positive:
Once a deadbeat relative doesn't repay the loan, they're unlikely to go back to you asking for more.

"...you still owe me for the last loan, so...no".

I'd expect that each trip to the well would be for higher and higher amounts of money, so early on, you can 'buy' an easy out for more requests.
 
In 1980 I was 25 and my brother was 19. He was living out of state, broke and desperate. I sent him a $50 money order so that he wouldn't starve. It was a gift that I was happy to send because I had plenty to live on and he didn't.

He wrote back to thank me and tell me that he used it to buy some really good weed.

Learned my lesson on that one! Luckily it was only a $50 lesson.
 
Yes, we have helped family members (I thought I'd never say that, but I never foresaw these circumstances).

It happened after I retired, but I'm sure it had nothing to do with my retirement. They could look at my job title and know I had more money than their other relatives.

All (yes, more than one) have characterized it as a "loan". In all cases, I believe they were sincere at the time. But, I always felt these were "gifts". Any repayment would be a welcome surprise. I've had a trivial amount of welcome surprises.
 
Not family, but one of DW's closest friends from college. A couple of years ago she asked for a loan of $150 to get her through a brief patch of trouble. DW sent it to her and told her it was a gift. That pissed the friend off for some reason. She didn't want charity. I am fairly certain that it would never have been paid back, however. From some other family stories regarding "loans" within my family it seems that a number of people are comfortable with getting a loan and not paying it back, but they would NEVER accept a gift.:confused:
 
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