Yes, No or “it depends.”
Brother in law has asked for a loan (unspecified amount–behind on mortgage and child support). He has always lived beyond his means in my opinion. Ran through his inheritance from parents. Ours has been saved for retirement, and now he’s asking to borrow some. My spouse feels guilty. I feel angry.
If you say yes, it won’t end and is just down payment on more requests. Hold firm and say sorry, funds are fully committed. No need for guilt or anger.
Adding to say spouse agrees bad idea generally, but feels we could help a little now. We could use liquid cash now, but with 1 in college now and 2 soon, might be a problem to not have that liquidity soon.
It will not be a loan, it will be a gift. Do you want to gift him this money?
If you do decide to go through with it, make sure you have the repayment terms in writing. You will probably never sue to enforce it, but at least if you have a repayment plan in place, when he asks again, and he will, you’ll have the proof that he didn’t follow the plan in the first place.
If he surprises you and does repay, then you can congratulate him and hand him back the loan documents.
If you feel like helping him, pay to the lender directly. Child support? Sorry, I have zero sympathy for him there.
If you “loan” anything and he lives above means as he has you won’t see it again and sour the relationship. If you have one in college and 2 coming up, your funds are already fully committed.
Have NEVER heard where this goes well for lender or borrower.
Given the description of this relative - and having one of these myself, the answer is NO NO NO NO Noooooooo.
I did tell my spouse we could just give him $500. But I don’t want him to come back and ask for more (and no clue how to stop that from happening). I feel like just the request has soured our relationship frankly.
If he NEEDS gift and you and H wants to give gift, realize it will be the start (or continuation) of MORE gifts and he will be resentful no matter what – that you have more assets, that you aren’t even MORE generous, that you don’t give him carte blanche to your assets, that he HAD to spend his inheritance and “lucky” you were able to “hoard” your inheritance.
None of this is fair but you and H will be cast in some of the above, regardless of what you do or don’t do.
If you give BIL the money, the cash may never make it to reducing BIL’s financial obligations such as mortgage and child support.
Sorry, the relationship is already “soured” by BIL’s request and likely to worsen as he continues to ask for more, which is highly likely.
We have loaned money to two relatives. In both cases, we didn’t expect to ever see that money again. And in both cases, it was less than $1000.
One relative paid us back almost immediately. If she asked, we would float her a loan again.
The other relative has not paid us back. It’s been years. There have been other times when family has asked us to chip in when this relative fell short on cash…and we have declined.
If you give the money to the relative…you have to understand…it’s money you probably will never see again.
People who truly only need short term floats and will repay already have options like getting a 0% CCard and repaying it before the interest starts. Most loved ones asking for “loans” are asking for gifts.
There’s really no such thing as a “loan” to a relative like you describe. It’s actually a “gift” as others have said.
Take a look at it from another direction. You’re going to have 3 kids in college soon and money will be tight, you might even take loans. Ask yourself, would you take on debt to give the money to your BIL? Or would you buy your kids lower-end laptops instead of mid-grade so you could give the extra money to your BIL? Would you ask your kids to take on loans in order to give the money to your BIL?
Bottom line is that money you own is one big pool. If you scoop some out to pay your BIL, you end up with less in the pool for other things. If you have to short-change your kids so your BIL can own a Lexus instead of a Hyundai, I think you have your answer right there. OTOH, if you had money already earmarked for charity in your annual budget, maybe that’s something you could redirect to your BIL without too much heartburn.
To add to my above post, W’s sister has a BIL like the OP. They’ve been giving him money for decades. It never ends.
My HS friend and her H have ILs like BIL. They’ve also been gifting money and their older cars and furniture to the ILs for decades with little to no gratitude. Their own kids have had to take out college loans as well. Sadly it never ends.
Yes @anomander it is just one big pool. And we’ve told my S18 this year that he can’t go to colleges that are too pricey. We are looking at merit aid schools primarily. So why would I give money to my BIL that I wouldn’t give to my son? (Hence my anger/annoyance.)
Ok, so how do I convince husband that we shouldn’t do this?
You could show him this thread? Ask him to identify a similar situation he know of where it went well and there was prompt repayment and were no future requests.
If he has a history of living beyond his means, don’t lend or offer to give him any money unless you’re prepared for him to come back asking for more.
The asking for more is a common behavioral pattern with those who have a history of overspending or otherwise living beyond their means.
Those who give to folks living beyond their means are enablers and not helping the spenders. It allows them to keep going on their over-spending way rather than buckle down and make some significant changes.
Imagine how you’ll feel when he continues to live beyond his means.
That was almost simultaneous! (above)
Imagine how your kids will feel if they have to take bigger loans so he can have more nights out on the town.