Dave Ramsey says: Think hard before lending money to family

Dear Dave,

Do you have guidelines for giving when it comes to helping family members?

My wife and I are both 52, we’re debt-free, and we have savings along with about $750,000 in retirement.

We agree with you that it’s a bad idea to loan money to relatives, but we were hoping you could give us a little extra guidance.

— Samuel

Dear Samuel,

I love that you have a helping and generous heart toward your family. Wanting to help is a noble and caring thing. Wanting to help in the best way possible for all concerned in a sign of maturity and wisdom.

The big thing is to make sure you’re helping someone get back on their feet, and make positive changes in their life.

You’re not helping anyone when you give a drunk a drink, so you have to ask yourself if your generosity is really helping them or if you’re just enabling bad behavior.

Also, you can’t give to a point where you’re putting your own household at risk. You have to continue to be responsible with your finances where your own family is concerned, as well.

This isn’t about being a control freak, Samuel. It’s about using the resources God has given you in a wise and responsible manner.

In human terms, that means helping someone get out of a mess they’re in, while at the same time ensuring they’re working to make sure they never end up there again!

— Dave

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