YOUR FINANCIAL TIPS

Monday, 6 May 2013

Lending Money to Family, Buddies


Does it seem like each time turn around, people are asking to borrow a few extra dollars to tide them over until payday? Do you feel as if all you do is pay bills but nothing ever looks like paid off?

A recent survey from the National Endowment for Financial Education (NEFE) discovered that roughly one in four elderly parents has gone into debt due to financial support they're providing to their children. In trying to help, parents take on car payments and health insurance payments for their kids, and even sometimes throw in some spending money.

And it's not just children who drain them financially. Relatives and friends seem to have their hands out asking for a few bucks or a cosignature on a loan.

In my book Zero Debt, I talk about things that ruin your budget — you might think of them as SCUM, for "Something Comes Up Monthly." It's supposed to explain why you need a cash cushion: because there will always be some unexpected event that comes up, such as the roof that leaks or the tire that goes flat.

But for many of you, SCUM could be an acronym for Some Child, Uncle or Mom — the people you are always financially bailing out!

In all seriousness, I recognize that it can be hard to say no to friends and relatives and that balancing money matters with real-life family issues is no laughing matter. The answers aren't always clear-cut.

Your hard-won wisdom might help someone else who is grappling with the question, "How can I help my family financially without sacrificing my own retirement?"

Despite the debts you may be repaying, there are ways to put yourself on solid economic ground. Come join us in the Pay Down Your Debt community.

SOURCE

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