Loaning money to a family member


Thoughts? My Mom asked me to borrow some money for a short term, well not some money, but a rather large amount($5,000). As a good husband I told her I’d talk to my wife about it. My Mom is not the most responsible person when it comes to money, is out of a job now, but has some money coming in soon from an alominy payment that is long overdue(another story). Of course, being my Mom, I feel I should do it, but my wife is skeptical. She threw out the idea of me and my 2 sisters splitting it 3 ways so the risk is spread out and I’m not the only one who gets abused if it came to not getting it back.


Well this might not be a popular answer, but I'd give it to her. She's your mother. What she's given you doesn't even come close to 5 grand and you will never be able to repay her fully. If you are in a financial position to have an extra 5 grand to give to anyone you are abundantly blessed indeed. I lost my mom 4 weeks ago and I'd have loved to have been able to help her financially while she was here, if I could have. Even if I never got repaid I'd not regret it. Just my :twocents:


if it is a loan, use the same business standards of prudence you would in lending to anyone else. If it is a gift, give it and forget it. If you have no reason so expect your mother to use the money responsibly offer intead to pay directly into whatever is her immediate necessity (mortgage payment or whatever) and make it a gift. In general all of her children should come together if she needs help from them and discuss, with her, what are her needs and how best to share the burden equitably among the whole family. Yeah like that is going to happen. She is your mother, but that does not mean you have to hand over money if it won’t be used for her needs.

as far as the unspoken question in OP, you and your wife have to consult together and come to agreement on all major financial decisions (and the underlying decision on how much involvement you have on all levels with your respective families).


Treat it as a loan, but mentally be prepared to consider it a gift, if there is a chance that it might not be repaid.

On the other hand, what is she going to use it for?

If it’s for food or essentials, maybe buy those things directly for her so the money doesn’t get diverted to clothes, on-line gambling, etc.

Or give her a credit card with a low limit. And have the bill come to you.

[It really depends on what your and your wife’s financial circumstances are. There was a person who was really up against it and it turned out they did have money but they spent it all on craft supplies and for vet bills for the cat to the point that they were literally near starvation themselves.]


Why does she need the money? If she needs the money to keep up with expenses because the alimony is overdue, then yeah you should give it to her. If she wants to go on a vacation, then she can wait.

She is after all your mother, and she spent way more money than 5000 raising you.


Dave Ramsey would say NO NO NO NO NO


If you decide to loan/give your mom the money and she is not good at managing money I agree with Monte’s suggestion. If you know what the money is (supposed) to be for try and pay the creditor directly. For example a medical bill, ask for the bill and pay the company direct. If it is for food and gas buy grocery prepaid store cards and gas cards. We have a close relative who cannot handle money and money “lent” was just not being used for the necessities. A gas card makes sure they won’t be calling you from the side of the road because they spent the gas money elsewhere. Also you want to be careful that you are not encouraging financial irresponsibility unless you are planning on regularly rescuing your mom. We are there :o.


Monetary gifts are fine. The giver gives you money and doesn't expect a thing in return. There is nothing shameful in taking a monetary gift from a relative or friend, even a large one. Thank you in word or writing is all that is required in return.

Monetary loans are a disaster waiting to happen. What would they do/say/think if something came up and you couldn't afford to repay it?

My :twocents:


Dave Ramsey says to never give loans to family. So if you truly feel that your mother needs the money give the money as a gift and don't expect anything back. If she pays you back it's a wonderful surprise. That way no hard feelings are created if mom never pays you back or pays you back later than originally planned. Family is too important for money arguements to tear it apart.


I agree that it is best to treat this as a gift rather then a loan if you can afford it. That is a big "if" though. 5 grand is a lot of money for most people. Do you have an emergency fund? Would that 5 grand gift drain the fund? It could endanger your families financial stability if so (and your immediate family should be your first priority).

Most importantly, make sure that your wife is onboard if you are going to give the full amount or a reduced gift. This is her money too. You don't want resentment brewing between her and you over this.


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