Family loans: Dealing with siblings who don't pay you back
Lending money can be a tricky affair, and it tends to get complicated when it's your siblings, and they don't pay you back. It's exactly what one KZN man is currently going through, and he turned to Damon for advice.
Listen to Monday's debate about lending siblings money, or read the details under the podcast:
In this day and age, it’s easy to understand how someone can find themselves in a dark place financially, and although you want to help a loved one or friend in need, I don’t think I’ve ever heard a story where money is involved, and a friendship or family isn’t torn apart in the process.
Loaning a family member money with the expectation to be paid back just becomes awkward, and putting parameters in place can be even more awkward, because no one wants to be the person who starts talking about ‘when will you pay me back’ or ‘I’m going to charge you interest’.
Read: Is it okay to ask your ex for money?
But what happens if this said family member in question doesn't pay you back, and there's no written agreement in place? It just becomes one helluva mess.
This is what's going down in Muzi's life, a KZN man who made the mistake of loaning his brother money. Now it is the same brother who has been dodging him like the plague.
Listen to what he had to say below:
I remember lending a friend money once. He was planning an overseas trip in a year and just needed a helping hand. He had a job, and he promised to pay me back. The overseas trip should have been the first warning sign that I’d never get the cash back, and the ‘month or so’ gentleman’s agreement should have been the next red flag.
Months went by, and when I did eventually bring up the subject of the cash, he skirted around the issue. Then, suddenly, he was gone. No goodbye, no call to tell me how he’d pay me back, and, even to this day as he works in London earning pounds, he still hasn't paid me back. He’s been back to South Africa twice in two years, and I’ve seen him out and about both times, but there’s a horrible awkward vibe from his side.
Read: What's the strangest thing you've done for money?
You may ask why I chose not to ask him for the money? Well, if he hasn’t paid it up until this point, do you honestly think he’ll pay it now? Not likely! So now I look at it as though I 'paid it forward', and hopefully someday he’ll help someone who also needs the helping hand.
When lending money, know that your relationship with whoever you lend the money to will change. If you have to lend money, only lend what you can afford to lose and please put the loan in writing. Memories fade, priorities shift, and what you originally agreed on can cause problems.
What are your thoughts? When lending your siblings money, is it wise to have an agreement in place, or does a 'blood agreement' stand?