How do I tell my family member I can't loan them money? (2024)

Dear #MoneyChat: I have a family member who always asks me for money. Sometimes I don't have it and anyway I think it makes it awkward if this person borrows money from me and doesn't end up paying it back. What should I do?

Dear #MoneyChatter: It can be a little awkward when family members ask for money. If you're going to give someone money, it's better to make it a gift rather than a loan.

This is because more than a third of Americans who lend money to loved ones either don't receive their money back or the situation ends badly and damages the relationship with that person.

Now, if you're not interested in giving a family member money, you're definitely in your right to do so and you should be clear but also respectful. Empathize with them about their situation and be understanding but explain how you can't give them money.

You don't need to a huge explanation behind your reasoning, but you can also mention some resources or offer to help in other ways.Maybe you can connect them with resources like utility assistance programs to help them pay their bills or offer to babysit or make dinner while they take on extra work.

Maybe you can offer to help them declutter and find some items in their home that they can sell for extra cash. You can still support your loved ones without handing over money and while sticking to your boundaries.

xoxo

Your Financial Coach,

Dorethia

ps: Have you ever been in a tight situation where a family member has asked you for money and you didn't know how to say no?

Pss: Learn more about budgeting, saving, and managing your money for success by downloading my free guide.