@Booajo - your BIL sounds like a clone of my BIL. Down to living beyond his means, running through an inheritance and asking us for a LARGE “loan” (ha) — right before we were about to take them/their family on a very expensive vacation. There is no child support in this scenario, but very very poor financial management, coupled with no desire to work. Thank heavens my DH said NO. I was the angry one til DH saw how his sibling mismanaged $ on the trip. Then he was the angry one 
I’ll feel even more irritated!
Most of his excess is about his kids sports crud (and living in a bigger house than he can afford of course), so I can really be the bad guy if I say that has to stop!
I do feel a bit bad for him because his ex is no innocent victim–he was definitely the injured party in their divorce.
Here’s another article agreeing with the “just say no” group.
https://www.moneytalksnews.com/tired-loaning-money-friends-and-family-heres-how-stop/
It takes two to make a marriage and continue it. He has to deal with what his situation is NOW. If he needs child support reduced, he has to man up and ask the court to do so, not to expect bailouts. If it’s too much house for him as a sole wage owner, he has to address that by renting, selling, sharing, etc.
Point out to your DH all the ways your BIL spend money that you don’t. Remind him that money is fungible, and consider that it won’t be going to the mortgage and child support, it will be going to the lifestyle excess.
Or maybe point out that it is unlikely this is a one time request, and you are going to have to say no sooner or later. The sooner BIL knows you are not a source of funds the sooner he can start correcting his spending habits. Paying him now will make it harder down the road.
And good luck.
And IF…and I mean IF you decide to help this relative…do NOT give the money to him. YOU can send the money directly to those he needs to pay.
That way…at least you will know that your “loan” actually went to the mortgage company, or utility company or whatever.
I loaned a family member money and it worked out fine.
In the situation you described I would not loan that person money
I am in the camp for no lending to family. My father once told me not to lend money to my brother. That seemed to come out of no where, and my brother never asked. I had a plan though. I planned on saying no. I think in simple terms. If my brother was starving or without shelter I would pay for shelter and buy him food.
If you decide to gift him the $500, set it up like a loan. To you, the money is gone and you’ll never see it again. To BIL, it is a loan, you have the loan agreement and repayment terms set up. When he asks for more, you have the loan agreement to show he didn’t live up to it so then the answer is no.
BTW, even though we saved well, the college expenses were way more than we anticipated. Between kids they seemed to increase exponentially.
You have to hold the line on this one. It is so much better if you do it right from the start. Your husband can blame it on you if it makes him feel better.
You will never see the money back, he will ask for more, and he still will be resentful. This will just enable his overspending habits. He needs to downscale, not have you pay for his lifestyle at your children’s expense. You will be so resentful if you do this “loan”, there will be more to come. Your husband should know this. I suggest you give him the gift of a Dave Ramsey financial makeover book.
The main thing, OP, is you and H have to figure out how you will handle this issue and be firm. Good luck!
Thanks to all. I’ll update if we get some resolution!
I don’t think you would ever get the money back, and I agree that he is likely to keep coming back for more and be resentful if you say “no” later. Giving him anything will only prolong his problem of overspending and will deprive your own family of funds that could make a difference.
Still, you don’t want this to create resentment between you and your husband. He evidently feels some sort of obligation to help his brother. Maybe a one-time gift would help your H feel that he did his part to help. I like this suggestion by twoinanddone:
@OP in your situation, don’t do it and don’t let your DH do it. So that one is a definite NO.
in answer to your general question, it depends. DH did “loan” (gift better term) his younger brother money over and over, until the last two times. The next to the last time was supposed to be the last time and since it wasn’t paid back as usual, I thought we were done. However, after about 3 years he seemed to be in a better place, married a hard working woman and had actually kept a job for a long (for him) time. I forget now why they needed a loan, but DH did it with the written description of how brother was going to pay him back. He had a certainty of a refund which would go to pay off this loan… except that his step-daughter’s father didn’t cough in for her “fairy tale wedding”. So DH got the “I had to pay for some of the wedding so of course you understand.” and no mention of making it up later. Next request got met with NOPE. And they do not see each other often, but I found out through FB that his step daughter had a baby… and we never were told. Alrighty!
However, we do have a successful loan story as well. DH’s cousin went through a hellish divorce and was caught short for moving. We loaned her money, thinking of it as a gift. but after a year, she started sending checks a little at a time. About 5 years into it, she paid the last $3000 off . And we mailed $1000 to each of her kids (two heading for college, both delayed because of their dad’s shenanigans). as graduation gifts. One wrote a really nice thank you letter. We would loan her money again, but I doubt she will ever need or ask again.
In general I agree that it is not a good idea to “loan” money to family however in certain circumstances it is warranted. One thing I would consider is how you would feel/what would you do if it was someone from your side of the family asking? (you might think it would never happen but people have emergency situations where the unexpected/unanticipated does occur). I think it is wise to discuss the ramifications with your husband but ultimately he has to make the decision himself.
If you do decide to lend, I think the brothers should also have a discussion on how to modify BILs spending to avoid future requests. Might seem intrusive but with asking for money, comes advice IMO.
I agree with most everyone else on this thread. This is a bad situation, and believe me it’s not a one time “loan”. We gave many family “loans” when we were our late thirties and of course were never repaid because we could “afford it” and were “lucky” to have high paying jobs. Fast forward many years and I can’t help but feel very resentful that our retirement could’ve been years earlier if we didn’t give away so much to people that had no real need for charity, just chose to live beyond their means and let us finance their lifestyle.
I’ve lent money to both a coworker who had run up a gambling debt, and a relative who despite significant assets was experiencing a severe cash flow problem.
The first one was about $1.3K in the 80s. She paid me back the next month, as promised.
The second was $5K, in the 90s. They paid me back within a few years.
We borrowed money from my parents to buy our first house. We had a regular amortized payment schedule, but paid them back significantly ahead of time, like years.
I think you really have to know who you are dealing with.
A few years ago a friend of mine asked my opinion about a loan request from a college friend. I told her that she should only go ahead if she felt comfortable making it a gift. She decided not to.
Why does your spouse feel guilty? I think you need to explore that with him, until you get to the place where you are both okay with whatever is decided. You don’t want this to become an issue in your marriage I strongly agree that if you lend your BIL money, you need to document it as a loan but think of it as a gift. If you give your BIL money for his mortgage and child support, why does your BIL think that he will be able to keep on top of this in the future and not need to borrow again? That’s not for you to answer me, but for you to ask your H.
Just to put this in context:
You and DH have spent your entire adult lives working hard at your jobs. You’ve religiously saved money, knowing that eventually you would like to buy a house, have children, buy cars. You’ve put money aside for all those things, because you’re responsible and mature. The inheritance that you received was a big help toward your achieving your goals, and you put it aside for a later time. You are finally at a point where your children are getting ready to go to college, and you’ve earmarked funds you’ve saved for college. You also of course have been saving toward retirement, which will follow sometime after the college expenses are finished.
Your BIL has lived beyond his means. He’s spent more money than he has, believing that he is somehow entitled. He viewed the inheritance as a windfall, as play money, and he quickly ran through it. He’s made poor choices in terms of marrying his ex-wife and buying the house he did. He hasn’t even set money aside to pay child support for his own children.
And you need to ask what to do??
ETA: Your and your husband’s first responsibility is to each other and your children. All the money you have is already spoken for, for those people. None is available for anyone else.
If a college kid came here asking for money for an expensive school their family couldn’t afford we’d ask them, “where’s your job?” If they had one that wasn’t enough to pay for everything they wanted, we’d suggest they go find a second one. Maybe it’s time your BIL got a second job so he can he get caught up on his bills.
Don’t let your BIL put you in the position of making his mortgage payments for him. If he can’t afford his home on his current income, it’s better that he learns that now. If you say no, he’ll figure something out. He’s smart enough not to ask for money for a trip or sports stuff. People who overspend then look to their family for financial help are like that – they spend the mortgage money on their toys then ask to borrow money to pay the mortgage. What did he spend his mortgage money on? That’s what you’d be paying for.
I don’t think it’s an accident that he’s asking for money for necessities like his home and kid instead of extras like cable and a car payment. We don’t feel guilty about suggesting cutting extras. Don’t let him guilt you. Your husband needs to think longterm. Unless you’re willing to help support your BIL, I wouldn’t set a precedent of bailing him out.