What are the risks of lending money to family?
Many people report not being repaid, but millennials were the age group most likely to say the loan to a friend or relative ended badly.
DALLAS — As we come together for the holidays, let’s hope these get-togethers don’t come with contentious and awkward conversations.
We don’t care about divisive political conversations here. It’s a question of money. Specifically, money people may still owe to friends and family they have borrowed from.
This isn’t the lecture we’ve all heard about how you need to be extra careful when lending money to loved ones. Let’s talk to the borrowers instead: If you’re asking someone you know or love for financial help, do whatever you can to get their money back.
A Bankrate survey has just revealed that 44% of people who lent to a friend or relative said it had a bad outcome. Respondents revealed that in most cases (38%) this simply meant that they had lost money. But a significant percentage (23%) of people who helped someone dear to them financially said it ended up hurting their relationship. Some (14%) said it hurt their credit score. And 7% of respondents said that not being paid back after loaning to someone dear to them resulted in a physical fight!
Of all age groups, Millennials were (by far) the most likely to burn themselves out financially after helping out a loved one. 62% of Millennials surveyed said it ended badly. So, again, beware of mixing love and friendship and money.
How you can help older friends or relatives
Now, one thing you can do to help a friend or relative who is older and in need is to make sure they get all the benefits they are entitled to. Some older Americans are cut off from the help that is available to them.
It’s quite concerning that the National Council on Aging has new public service announcements reminding seniors that there are programs they are eligible for that can help pay for things like food, prescriptions, utilities , transportation and taxes.
There’s no guarantee you’ll get a bargain from it, but it might be a good exercise just to double check and make sure you’re not missing out on any benefits. The organization has a benefit verification tool to help people make sure they are receiving all the benefits that are due to them.