Dave Ramsey says: A loan between friends and family isn’t recommended

Dear Dave,

I’ve had some problems with my parents, and I’m hoping you can help. Last summer I borrowed $2,500 from them, and it is taking me longer to pay them back than we agreed. Since the payback date passed, they have made several comments about money when we’re together, and our relationship seems strained. In the last couple of months, I have taken steps to become more financially responsible. I am now doing things like living on a budget and putting something from each paycheck into a savings account. How should I approach this issue with them?

— Remi

Dear Remi,

Loaning money to, or borrowing money from, relatives or friends often leads to bruised feelings. I’m sorry you’re going through this, but I hope it will teach you and your folks a valuable lesson going forward. There’s nothing wrong with giving money in a situation like this, as long as you’re not enabling bad behavior by doing so. But a loan between friends or family is something I never recommend.

If they choose to hold a grudge there’s really not a lot you can do, especially if you took longer than agreed upon to pay them back. It just takes more time with some people—and in some cases even parents—for those kinds of things to heal. You have to remember, in their minds there’s an element of responsibility and trust involved here. But considering it’s your mom and dad we’re talking about, I’d say they’ll lighten up and become a little easier to be around with time.

Until that happens, though, maybe you could look for chances to mention your new approach to finances during conversations with them. Even something as simple as an off-hand remark about how much you were able to put into savings from your recent paychecks may encourage them to see things in a different light. Letting them know you’re actively working to change your ways and gain control of your finances could mean a lot to them.

Give it a try!

— Dave

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