Being asked for money

Although we have given money to family before, we’ve never been asked for money before.  There have been little things like school and other charity fundraisers and political candidates, but not requests for spending money.

Usually instead what happens is relatives will have had a tragic event and set up a gofundme or they’ll get married or buy a house or have a baby or we’ll hear through the family grapevine about some need and we’ll send a gift-card or a check or buy something off a registry.  We have also offered to pay full college expenses for the kids of one of DH’s relatives, though there’s not been much take-up of that.

Recently we got asked for a short-term (two week) loan from a low income relative, $200-$300 in exchange for a post-dated check to be cashed after the next paycheck (usually this relative is able to get an advance on the next paycheck, but the person able to do that was out that week).  There’s a long list of reasons why this relative isn’t quite making pay-check to pay-check ends meet, and they don’t have credit cards or the ability to borrow more from their house and I think it’ll be a few years before they can declare bankruptcy again.  There’s a lot of problems with previous mismanagement (and there’s still a heavy smoker in the family… but cigarettes are less expensive than Nicorette), but the big thing is really that there just isn’t enough income or opportunity.  When there’s overtime or side-jobs, they make it paycheck to paycheck, but when there isn’t they just run up perpetually short.  They’re reminiscent of delagar’s series on poor and middle-class in the US, but on the low end– the line between poor and lower-middle-class.  Usually they lean on other family members who are also low income (and get leaned upon by the same local extended family), but those sources, too, must be tapped out.

Obviously we’re not going to be dealing with loans to family, so this would be a gift.

We are of the minority in the US who can easily come up with $500 (or $400, or even $1000, depending on the study that you look at) on short notice.  So even with our extremely expensive summer (and even with me not getting paid over the summer), this is not a hardship for us.  We’ve certainly made enough mistakes this summer that cost over $500.

But it’s uncomfortable.  It’s uncomfortable because we remember times in the past when $100 was not a hardship, but still a sacrifice for us and sending $100 to buy groceries ended up becoming a game system for them instead (and DH wanted a game system but we didn’t feel like we could afford it yet… we were still saving up for a w/d).  It’s uncomfortable because this is a large extended family– one request from one person is not a big deal, but if word gets out…  It’s uncomfortable because $200-$300 isn’t going to really make any difference in the long run.  There’s still going to be that gap in income and expenditures and that gap is not going to shrink.

It’s uncomfortable because of what it means for the future.

Sometimes giving money makes things worse because it enables people to get into even bigger holes by taking risks they shouldn’t be taking (to take a previous real example, replacing an old car that ran just fine with an expensive new car that then got repossessed when they hit bad times).  And, of course, that makes us uncomfortable because it puts us in the position of feeling squicky about “worthiness”– who are we to judge, and yet… we don’t want to make things worse.

So we (mostly DH) made peace with all of this and said no problem, but that a check was unlikely to get there in time, what did they need the money for, gas and groceries or what?  And because it was gas and groceries for the week we sent a Walmart giftcard for $249 (since $250 triggers additional fraud protections) which was cancelled by Walmart’s fraud service team in the middle of the night anyway because I guess they caught on to the $250 minus $1 trick.  So we had to call up and get it reprocessed, which it is still (as of this writing) in the process of doing, but presumably it will be done before a check could have reached them.  So, if you are attempting to send a walmart card to a needy family in a short amount of time, maybe stick with denominations in the $100 or less range.  (If the money was needed for something else, we were going to see if hir bank took Zelle, or if we could pay a bill directly.)  We also sent a check for $50 in the off chance it can get deposited before the outstanding checks zie’s written overdraw the account.

Then the next question is whether to allow the relative to send a check that we then tear up or if we say not to bother sending a check.  DH is in favor of complete honesty, but I’m torn between 1. thinking how zie wouldn’t have a -$25 balance in checking right now if zie thought zie had $299 less in there and 2. knowing that a lot of people really hate it when checks haven’t been cashed because it screws with checkbook balancing and 3. knowledge that the belief that the check will eventually be cashed won’t last very long and might screw with mental accounting in the wrong direction later.  We will no doubt go with the honesty option, but perhaps not until after the check has been sent.

Do you get requests from family for loans or gifts?  How do you deal with them?

36 Responses to “Being asked for money”

  1. rose Says:

    I have not been in this position so I don’t really know. By principal my rule is to never loan money I would and could not give away as a gift. Being fixed income that eliminates lots because if it is true you/your children will not eat if not repaid … well, that stops casual handing out of money.
    A general broader family rule has been to not hand over cash but pay directly towards a bill. Ask to see their total financial picture and talk about their realistic plans to change over 6 months. Then fund only as long they demonstrate progress consistently. When a child keeps dropping out of post secondary classes after fees will not be refunded, fund the education only after seeing the grades, not before, so the student has their skin in the game not yours.
    Really look at what the person is doing with money and what causes the problem. Health finances are different from wanting to go to movies or ‘wants not needs’. Are children caught in the problem? A person working multiple jobs but earning minimum wage may be a different situation than someone who won’t work by choice.
    Not many people can afford to ‘bail out’ multiple extended family members. Maybe you set up and maintain a fund for helping family members at a level you can afford to give away and, without telling the dollars, fund family only as much as the fund can afford. Repayments return to funding that account.
    I haven’t been there. It sounds to me like you two gave it very careful thought and came up with a plan that works for both of you. That is important.

    • nicoleandmaggie Says:

      I don’t believe in funding education contingent on grades. Effort, maybe, grades no. Students who are struggling don’t need more stress.

      • rose Says:

        I didn’t mean grade as in A-F, I meant not dropping out after too late to get refund on costs….. dropping all classes one or two days post that point. Very different. I agree if struggling and making effort it is totally different.

  2. Leigh Says:

    My sibling once asked me for some money so they didn’t have to ask our parents for as much or ask their boy/girlfriend for money. I gave it to them as a gift and then my parent got pissed at me because they wanted to give me the same amount I got my sibling.

    We’ve started giving larger gifts at weddings occasionally, like we gave my husband’s sibling about 65% of what their parents gave us for our wedding, which I felt awkward about and it also equates to 167% of what my sibling gave us. (My parents gave us 10x what my in-laws did.) We put a lot of thought into saving for nibling college funds and we ended up concluding we wouldn’t save anything special, but that we would pay for what their parents couldn’t afford. We don’t plan to have kids, but we want to pay it forward that my parents paid for my college.

  3. C Says:

    My parents went down this toad with their extended families and I would encourage caution! I don’t know how much they directly gave their siblings and my cousin, but I would posit it’s in the high tens of thousands over the last 30 years. When you count investment losses in their failed schemes, were taking low millions. Once you are seen as a bank, it’s very hard to extricate yourself from that role.

    The piece I’m sure they never considered is that it really poisoned my and my sisters’ relationship with out extended family. It’s very hard to find out your cousin used your parent’s money to buy designer clothing when all you got as a teen was TJ Maxx.

    So, proceed with caution as it looks you have. Good luck.

  4. delagar Says:

    Back when we were *much* poorer than we are now, my mother sent us a check for $500 once or twice. It was the only way we made it through.

    Blessings on your head, I guess is what I’m saying. You’re good people.

  5. Revanche @ A Gai Shan Life Says:

    Sigh. Lots of sighs. I was asked for money a hell of a lot more often than I should have been as a teen and in my 20s and not just from my parents (mostly Dad, because Mom didn’t ask for money, just help with actual bills until I took them all over) and it was not good. And come to think of it, I think my Dad lied to me more than once about the person asking for the “loan” because they never got paid back and that was his MO. Wow, was I a chump. More than one of us has lifted ourselves out of that barely making it paycheck to paycheck and running short cycle. They still operate on that cycle of relying on short term loans from also-low-income relatives and it burns me up that Dad has taken many larger (talking several hundreds or more) “loans” from my cousins and aunts.

    Among other uncomfortable money requests, I was asked to co-sign loans for property for relatives who weren’t creditworthy, and that auto loan for my sibling’s vehicle that of course I ended up having to sell because he quit covering the bills just as predicted.

    So I’m torn. In some cases, I couldn’t help because it was just too much, but I stretched myself too far to help too often and yes often it was just Dad (or my sibling) pulling shenanigans but I am leery of becoming part of that cycle again.

    I feel like the situation that Delagar mentions is very different from this because it was (I’m assuming) an unsolicited gift but at the same time, it seems like it’s not all that different, the one different detail is that her mother was able and knew to send money. We wouldn’t necessarily know to send money to relatives in that way. I had received an offer of money to help me out once from a relative who knew more of the truth than I did but they offered as long as I kept it secret from my parents and, without context, that seemed like a bad idea to me. Now, I wish I’d accepted but I didn’t know back then that it wasn’t sinister, that it was just to protect them from my dad.

    I have a lot of conflicted feelings about this, is what I’m sayin.

    • nicoleandmaggie Says:

      It definitely makes sense to have conflicted feelings. I mean, this is one of the reasons I’m a democrat– take that decision-making about worthiness away from individuals, make sure everyone (especially kids) gets plenty to eat and health insurance and clothes to wear and shelter and so on.

  6. Mary m Says:

    Family members ask me for money all the time, that is, maybe 8-10 times/year. Though it’s not always the same person asking. Usually, I just give it to them if it’s a reasonable amount — say, under $500 or so. If it’s much more than that, I tell that I can’t afford it.

    I’m probably enabling them, but I don’t really worry about it. Maybe I should….

  7. Cloud Says:

    Not with family, but… I’ve gotten into a situation where I’m frequently advancing the woman who cleans our house money. She has always made good on the debt in the end (we pay half-price on cleanings until we’re even, or sometimes she says to put the entire cost of a cleaning towards her debt). My rule is that she can’t owe me more than I’d be okay absorbing as a loss if she suddenly disappeared on us. She recently had a run of bad luck and bad timing (e.g., not realizing how much books cost for college and not having the knowledge of financial aid to have had that set up in time, illness in her family…) and has gotten enough in debt that I would be uncomfortable advancing any more money. I let her know that when I agreed to the most recent advance. I’ve also looked for some extra cleaning tasks she can do to earn back the money faster.

    I am not sure what to do going forward. On the one hand, we can easily handle the advance payment and I don’t know what other options she’d have. It feels churlish to say no. On the other hand, it puts us in a bit of an awkward situation as a client (I can’t move to another cleaner, for instance, without writing off hundreds of dollars of advance payments) and I don’t want her relying on us as her general method to fill a gap. I’m OK with an occasional advance, but not with doing it regularly.

    We used to have a cleaning service, which we chose because they gave sick days and holiday time… but then they switched their employees to contractor status without increasing their pay, which I thought was shitty. So we dropped them and went with one of their former employees who set up her own business. But if I had it to do over again, I think I’d instead find another service. Now sick days = rescheduled cleanings, and since one of the reasons we pay for cleaning is that I have asthma and need a clean house to stay healthy, rescheduling causes problems.

  8. xykademiqz Says:

    Part of the reason why I don’t have much contact with my mother (and to a certain degree, sister), who both live overseas, if that sooner or later they always ask for money. Not for necessities, but they assume they are owed luxuries. My mom has always chastised me for not caring much about my nails, shoes, and clothes — I care some, but nowhere near what’s standard in Europe and even further from where my mother thinks my priorities should be. My mother really likes to count other people’s money and is always very intrusive when it comes to my finances, so I avoid her altogether. Like I can’t have anything if she can’t have it just as well.

    I did send them (mom, sister, father) on the order of tens of thousands when they needed bigger sums for my sister’s apartment etc. I’m never getting any money back and I knew that when I sent it, but I resent being thought of as a bank, esp. by people who for the past 20 years have been nothing but a drain (emotional as well as financial). They are all middle class in my ancestral home country, btw, so it’s not like they live in the slums while I own a palace.

    Yeah, I’m a bit bitter.

    • nicoleandmaggie Says:

      Ugh. So frustrating. And it’s not like you don’t have debt and upcoming college expenses etc of your own before your own luxuries, much less someone else’s(!).

    • Revanche @ A Gai Shan Life Says:

      I’m sorry your mom and sister are that way. I’d be bitter too, in your shoes. I’m bitter in my shoes!

      That’s similar to the reason I cut off my dad – he felt entitled to my money in a really unhealthy way and used my sense of responsibility to scam me out of hundreds of thousands of getting his bills paid while lying to me about so many things, too. We can’t have contact now because he is STILL asking for things literally no one is entitled to ask. SMH.

  9. Matthew Healy Says:

    DW and I haven’t had much of this from our relatives, who mostly have sufficient reserves for small emergencies, but we got a LOT of this when her late mother needed help for many years and refused to move into assisted living. We had various helpers going in and out, and they often needed advances on their next payment when the car broke down or one of their relatives had some kind of emergency or whatever. Made us rather uncomfortable, because the needs were real and we did have much more money than anybody else involved, but we feared being seen as the all-purpose financial fixers. Eventually we switched to working with an agency, even though that cost more, precisely because having an office sitting between us and the employees blocked such requests.

    • nicoleandmaggie Says:

      Agencies are often worth the cut they take!

      • Matthew Healy Says:

        So we have learned! Her mother passed away last year, so in her case the issue won’t come up again but instead we have assorted Estate stuff to do, which is outside the scope of this thread. We are inheriting enough that it feels petty to kvetch about the tedium involved, but even if the effective hourly rate for our time spent on Estate stuff is pretty high, well it still IS tedious. Fortunately relatives knew a good lawyer who is local to where DW’s mom lived (which is about 800 miles from here).

        But if and when my mother needs help, we’re absolutely going to use an agency.

      • nicoleandmaggie Says:

        So sorry for your loss.

      • Matthew D Healy Says:

        Followup on the Estate stuff: the sale of my MIL’s house finally closed a few weeks ago, and the lawyers closed out the Estate, so my wife is totally done now. At the moment the proceeds are sitting in a Savings Account until we and our Financial Planner decide how to allocate these new dollars among various investment pots.

  10. Debbie M Says:

    I’m lucky in that mostly no one asks me for money. My paternal grandparents used to be the richest ones, so when they died I feared that people would start coming to me. But fortunately a) my parents don’t feel right asking their kids for money and b) I advertise my salary (low) more than my wealth (high)–it feels weird asking for money from someone with a lower salary than you, even if you have dependents and other good reasons for higher costs.

    For my siblings I mostly do loans–and I have a rule that they don’t get a loan until they pay back the last one (and of course I don’t loan more than I can stand to lose). Neither of them has asked me for money in years and years–even though one of them has paid me back!

    But I also subsidize once-in-a-lifetime opportunities (like visiting my sister while she lived in Belgium and going on a family trip to Disneyland). I would also be up for financing things that are basically investments, like first-and-last-month’s rent for a new cheaper apartment closer to the job, but that hasn’t come up. I also loaned money to fix brakes, but the car was already too broken in other ways and they ended up getting rid of it shortly thereafter, so that was a mistake.

    I don’t know what I would do in your situation, because you really have to focus on the psychological long-term effects of your decision. You don’t want to encourage dependency. But you don’t want to be like those pay-day lenders where they can never get out. So I guess I’d want them to pay me back, but of course with no interest, and also with no expectations so the relationship doesn’t get damaged. But then there’s guilt for not being able to repay, so if that happened, you could forgive part or all of the loan on the next appropriate holiday or something. Good luck!

    • nicoleandmaggie Says:

      We’re definitely not ever going to loan money to family (not counting the small floats my sister and I do when we’re buying group tickets for something and reconcile the next time we see each other).

  11. middle_class Says:

    I just read Nickled and Dimed, so I am still recovering from the sadness of how the working poor survive in our winner take all economy. I don’t think i live in a bubble but the book really made me understand the myriad of ways people get trapped in poverty and most dont have relatives who can help. Government and charitable assistance also have many limitations esp for the working poor.

    It is great you can help without judgement.

  12. SP Says:

    This is a tough situation.

    No, we’ve never been asked for money. Honestly, I’m a little surprised about that fact, but I suppose none of my close family members are at the point where they are struggling the way the family you describe here are. My parents know how expensive it is here. My older sister has much richer relatives on her husbands side. My younger sister…. tends to go to my parents, who somehow make it work. My parents are both still working, and have enough to make ends meet generally. My dad is historically pretty terrible with managing money.

    In the past, my dad had asked to borrow my good credit history, and I agreed once when I was younger and dumber. I don’t think he would ask again because he knows I won’t agree. And if someone doesn’t have great credit and is searching for credit, there is probably some other problem that I don’t want to be involved in. He once wanted to be an authorized user on my CC to boost his credit, but I told him that they closed that loophole, which I think is true.

    Anyway, I do think the day will come, but I think we are a good many years off.

    • nicoleandmaggie Says:

      Wow, I’m glad our parents are generally good with managing money (the only “bad decision” we know of was when my FIL was using Edward Jones instead of managing his own index funds– but once we pointed that out to him he switched, saving them thousands of dollars/year in fees). Getting asked by a parent with bad credit to risk my credit would be really hard!

  13. Candi @ minhus Says:

    Ugh. That’s a tough one. I HATE loaning money. My mom asked me for a $20k loan many moons ago because my stepdad wrecked their SUV and she didn’t have the cash to replace it without cashing in some investments and paying penalties. I only did it because she’s good with money, I knew she’d pay me back and she helped me on my first car loan and with part of college. So I felt obligated even though I’m not comfortable loaning money and I definitely couldn’t afford to lose it. But she paid me back in less than a year, with some interest.

    Then a few years later she asked for an even bigger sum to buy a bowling alley. I agonized over that because I really didn’t want to, but still felt somewhat obligated. She said “it’ll be an investment and you’ll earn interest,” but that’s not something I would ever invest in. I finally told her I was really uncomfortable loaning money and had plans to pay off my mortgage and couldn’t do both. She seemed to understand and they didn’t buy the bowling alley, thank goodness, since she has no experience with that and I recently heard it’s not making money. Luckily those are the only requests I’ve had!

    • Matthew Healy Says:

      My wife and I did make a bridge loan to my brother and his wife when they bought their current house, because otherwise they would have had to cash in some investments. They paid us back once they had sold their previous house. But I think that’s a different category entirely.

      • nicoleandmaggie Says:

        We did cash in some investments to buy our house! And that took longer than I expected so I got a bridge loan from our credit card company…(which we paid back before the 0% interest wore off once the investments were free and clear– nowadays it doesn’t take so long to cash out!).

    • nicoleandmaggie Says:

      Oh man, being asked to make a joint investment sounds terrifying. At least our case here was only $300. I don’t know what I would do in the car situation if it were my family and me not being able to afford to lose it… probably just expect them to get official financing and pay interest (or a cheaper car) because I wouldn’t be able to handle the stress. My money anxiety is strong (which is why we have such a large emergency fund).

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