When I was in college, my first car had finally broken down. I needed another car, but I didn’t have any money to get another one. I didn’t want to go to a bank to get a loan for a car, because I was didn’t want to pay all of the interest and I didn’t want the possibility of it getting repossessed if I could not make the payment. After several discussions with my dad, he agreed to pay for the car and I would pay him a set amount each month until the loan was either paid off, or he felt that I had paid enough towards it for him to give me the title. I didn’t have to pay any interest, and if I was a few days late, I wouldn’t be penalized. It seemed like a sweet deal at the time, but once I started driving that car and paying payments to my dad, it just didn’t seem right. He wasn’t a jerk about it, and he didn’t hold it over my head, but I didn’t like the idea of owing my dad money. I thought to myself, “My family shouldn’t feel like my bank.” At some point in your life, your money and your family will mix together. You may not want it to, but it will. However, you can choose how you deal with money when it comes to you and your immediate and extended family. Borrowing money, lending money, and starting business from family can be very alluring, because you are close to that person and you feel like you can trust them. I understand why families borrow money from each and start businesses together, but I am going to give you a few reasons why you should not do it and how to avoid it.

1. Don’t Borrow Money From Your Family. I have adopted a rule to never borrow money from my family. Granted, I know there may be dire situations when you are going to lose your house, have a medical emergency, or some other tragedy occurs where borrowing from your family might seem like the only option. If they are your last resort and the situation is life or death, then borrow from your family. But generally speaking, I don’t think it’s a good idea to use your family as your bank. You shouldn’t have to sit at the Thanksgiving table wondering if your parents, brother, sister, uncle, or grandparent is wondering when you are going to pay them back. It’s a horrible feeling. The best way to enjoy your family is by keeping your borrowing habits to yourself. Lord knows that most families have enough issues and money would just complicate them even more.
2. Don’t Lend Money To Your Family. This is the same concept as above. If you’re not going to borrow it from your family, you shouldn’t lend it to your family, either! Dave Ramsey likes to quote a famous proverb in the Bible that says “the borrower is slave to the lender”, and it is so true. Do you really want your family member to feel like they are a slave to you? Well, I know some of you wouldn’t mind your in-laws feeling that way, but you know what I’m saying.
3. Give Money To Your Family. I’m not a cold-hearted person, so if your brother, parent, or other family member really needs some financial help to get out of a bad situation, my suggestion would be to just give them the money, no strings attached. You’ll show them a lot more love by just giving it to them rather than “loaning” them the money. Watch out for enabling that family member, though. If you know the family member habitually gets into bad situations, makes bad situations, or has an addiction, don’t keep shelling out money to them. The worst thing that you can do for a family member is continue to enable their bad habits and decisions. But, if your sister just went through a divorce and she needs help with her rent/mortgage payment just one time, go ahead and give her the money rather than loaning it to her.
4. Give Financial Advice With a Loving Approach. You may have a family member that is completely screwing up their finances, and you don’t want them to keep falling into the same financial traps. If it’s your parents, they may never listen to you about money, because they don’t want to hear advice or criticism from their children that they raised. If it’s your sibling, cousin, or any other family member, the best way to approach them is with a loving and empathetic attitude. If you attack them and tell them how much they’re screwing up, you’ll never get anywhere with them. They’ll shut down, and you won’t get anywhere. Start the conversation by telling them a story about how you were not on the right path with money but how you turned it around. Show them that you were in their shoes a few years back. If you take this approach and show them that you genuinely care, rather than come down on them, they’ll be more susceptible to your advice.

Family and money just don’t mix. If you mix them, you’ll have quite a sticky situation on your hands. Consider these four tips when it comes to money and family. If you’re on the right track with your finances, you can be a light to your family members who are running their finances into the ground, but lead by example first. They will appreciate you much more for it, rather than spouting off at them at every family reunion.