Never, Ever, Ever Borrow Money From Family

Family Feud

If there’s someone in your family that you’d like to see less of, there’s one surefire way to ruin that relationship: Lend them money.

Our families can be the greatest blessing that we ever have in this life, but they can also be the greatest burden. The key to having thriving, healthy family relationships is knowing how to foster the former and avoid the latter. And that means keeping them free from debt.

If you ever find yourself thinking about borrowing money, you might be tempted to turn to your parents or other family members who are in better financial shape than you. After all, our families are often the first place that we look when we encounter difficult situations.

It can also seem much more convenient or comfortable to turn to a family member for a loan than to go to a bank. You have a lot of relationship equity established with your family– they love you, they trust you, and they probably want to do whatever it takes to help you succeed in life.

On the other side of the equation, that same relationship equity can motive you to loan money money to a family member who is in need. Your personal attachment to your loved ones can make it seem like loaning them money is the right thing to do.

Unfortunately, both of these notions are deceiving: Borrowing money is always a bad plan, and creating debt within families is a terrible idea.

We’ve written extensively about the problems with debt on this site. It’s a form of financial and spiritual slavery, it costs you tons of cash in the long run, and it holds us back from accomplishing important things with our money. All in all, debt is not part of God’s plan for your life.

Family or Slave?

Those are lots of reasons to avoid debt in general, but let me drive home one specific point that is most relevant in this discussion: Debt disrupts normal relationships and recasts them in terms of bondage. The Bible tells us in Proverbs 22:7 that “The rich rule over the poor, and the borrower is slave to the lender.”

Any time you borrow money, you place yourself at the mercy of the person who lent it to you. Financially speaking, you are a slave to them. And anytime you loan someone money, they become slaves to you.

This is where we see the real danger of debt in family relationships: God created family to be some of the most beloved people in our lives. Family relationships should be marked by unconditional love and mutual giving. But anytime we borrow or lend money with someone in our family, we pervert those relationships.

God’s purpose for your family is for you to be a loving, honoring child of your parents, and for them to lead you with wisdom, guidance and protection. But if you borrow money from them, it changes all that. You no longer have parents — you instead have masters.

Exceptions to the Rule?

Perhaps you think your family is different. You are too close, too trusting, and too honest with each other to let a debt come between you. And besides, you’re sure that you’ll pay the loan back on time and everything will be as it was.

That all sounds good in theory, but what happens if you hit a roadblock and aren’t able to repay the loan on time? How will it feel when your family members start itching to get their money back? Will they put pressure on you? Will they start questioning your financial decisions? Will they try to control you until you give them what you owe them?

It doesn’t matter how great a relationship you have with someone — debt can change it quickly. Trust turns into suspicion. Generosity turns into stinginess. Honesty turns into evasion. Patience turns into exasperation. Love turns into resentment.

Putting debt into a family relationship will drive a wedge between you. When debt is involved, family celebrations become a bit less festive. Borrowers look for opportunities to evade their lenders. Instead of loving the people that owe them, family members who lend money become preoccupied with figuring out how to collect from them.

If you have a great family relationship, borrowing money threatens to sully it. The more dearly you value your family, the more important it is to guard it from debt.

——

Photo by Brad Holt. Used under Creative Commons License.

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Comments

  1. Great post. I have often heard it said that if you really think the situation warrants you helping out your family members then you should give them the money instead of loaning it to them.

    Of course you will always want to make sure that you are not enabling bad financial behavior with your generosity.

    Thanks.

    • Very well said, Vincent. Thanks for reading and commenting!

    • “On the other side of the equation, that same relationship equity can motive you to loan money money to a family member who is in need. Your personal attachment to your loved ones can make it seem like loaning them money is the right thing to do”

      It certainly is the right thing to do if you profess to be a Christian. We are responsible for our family members in need. 1 Timothy 5:8 But if anyone does not provide for his relatives, and especially for members of his household, he has denied the faith and is worse than an unbeliever. I have never loaned money and expected the payment to be returned from any family member. How much of that money will I take with me when I breathe my last breath. none Better to give to someone who needs it.

      • I didn’t day not to GIVE money to family members… I said not to LOAN it — i.e., with the expectation that it be paid back. Romans 13 instructs us to be sure that we don’t owe any debt to anyone, and Proverbs teaches that debt is slavery. If I love someone, the last thing I want to do is enslave them.

      • My personal experience: I co-signed 2 student loans for my brother, $14k, they haven’t talked to me since, missed payments, I had to pay it off. I had just lost my job, wife, house raising my kids alone. He had $500k in 401, lost his $300k/ year job and was living rent free because he stopped making mortgage payments on his golf course house (He told me all this). I trusted he’d pay me back in 6 months like he said but he didn’t. My guess is loans to people (especially in USA) aren’t needed for basic shelter, food and clothing but are often requested by those who have somehow mismanaged their lives (and will continue to mismanage their lives). When I pumped more money into my brother’s bank verses feeding my 3 motherless children I was likely mismanaging my own life and now an accomplice in ruining a relationship with my brother that I once so admired. Folks like me will destroy ourselves caring for other’s perceived needs. Humans don’t need money. They need Food, Shelter, Clothing and love. But Christians deceive themselves by using scripture verses just as Satan used scripture with Jesus. You can make the bible say anything you want to. Even Jesus countered scripture with more scripture. Before you loan cash, consider there are better ways to help broke people than write checks. Giving cash is the lazy and easy way to help. Counseling, nurturing, loving, teaching, spending time with broke people to help them manage their lives takes a LOT more effort than giving cash.

Trackbacks

  1. […] Should you ever borrow money from family? This article says “no” and gives some good reasons. I’m still chewing on […]

  2. […] Never, ever, ever borrow money from family. […]

  3. […] never come free (unless perhaps you borrow money from a friend or family member, which is a bad idea in its own right). The bank that you borrow from will always charge you interest on your loan. You pay that interest […]

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