Thinking About Lending Money To Family? Suze Orman Says You Might Be Hurting More Than Helping
When a family member or a close friend wants to borrow money, it may be difficult to say no if it is in a difficult point. However, personal finance expert SUZE FOOD He wants you to pause before he says yes.
“Your heart will always be shouting” yes “he writes. Last blog post. But he encourages people to step back and ask an important question: Is that really generous?
For ForestGenerosity is not only about helping someone else, but also to protect your own financial welfare. “What is generous for someone you love must be generous for you,” he explains.
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This may not be the right move if lending to lending to miss a credit card payment, contribute to your emergency fund, or compromise on your retirement targets. “What you give is not generous when you reduce your own financial security or prevent you from creating strong security.”
This can be a difficult pill to swallow, especially for elderly adults who can feel a strong impulse to support children, siblings or grandchildren. However, as Forest points out, it should not be at its own cost to help someone else. Financial future.
Instead of gifting money, many may consider borrowing money to the family or friends in need. Forest thinks whether lending money will really help the other person in the long run or cover a deeper problem.
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Gives examples: Giving money to someone who struggles to manage their expenditures or to help a young adult to meet a more expensive lifestyle may not do them any favor. In these cases, financial support can actually prevent them from learning how to live and built in their vehicles. Healthy Money Habits.
If you are in a solid financial position and still want to help, forest advises you to treat money as a gift, not a gift.
This does not mean a difficult deadline to set or receive interest. Instead, the idea is to give your loved ones the opportunity to repay the loan without pressure. “It may seem unreasonable to you, but asking them to pay money when they will keep the money longer,” he says.
