My Parents Asked Me for Money: What Should I Do?
There is not a set answer to this question. It is important to look at this on a case-by-case basis. Most parents would only ask for money or for a loan if they were in a very difficult situation. If you have ever been in a similar situation and borrowed money from your parents, you want to be able to return the favor. It is important to establish a plan for how you can help your parents financially. You need to ask yourself some basic questions before you make the decision.
Do You Have the Money?
If you do not have the money, then you need to say no. You should not go into debt in order to help your parents out. Additionally, if you are going to need the money, then you may also need to say no. However, if you have the money available in an emergency fund, and you are comfortable with the idea of never seeing the money again, then you may want to consider giving the money to your parents.
You may be in a situation that allows you to budget a set amount to send them each month. However, you should be careful because you do not want to have them rely on the money in case you are in a situation where you can no longer help out. Instead, you may choose to put that money into a special emergency fund that you can access to help your parents when needed.
What Are the Extenuating Circumstances?
It is important to consider the situation and then make the determination on whether or not you can help. If your father or mother just lost a job and they are struggling to put food on the table while looking for a new job, a loan may make sense. A similar reason may be that they became ill and were not able to work and are facing serious medical bills. They may need help with a car repair. These are one-time instances that may warrant help.
However, if your parents face more serious problems, like a gambling or shopping addiction, giving your parents money may actual hurt them. Additionally, you do not want to be in a situation where they become reliant on your help. While you may want to help your parents out, it should not get in the way of providing for your own family or your own basic needs. If your parents are in this type of situation, you may be better off encouraging them to seek help for their issues before you help them out. It can be difficult to have these discussions with your parents, but it is very important that you do.
If You Are Married, What Does Your Spouse Say?
Once your finances are combined, if one spouse is not comfortable with a situation, then you should not do it. It is simple: if your spouse says no, then the answer is no. Take the time to have a clear conversation about the expectations and what to do if the circumstances were going to change. It needs to be equal between both sides of the family. Never try to hide any of these types of transactions between spouses.
It is important that you treat both families equally. One family may not need the help, but if both are in tight situations, you can cause marital tension by just helping out one family. Of course, if extenuating circumstances like addictions or excessive spending apply, you may need to set clear limits on one family and find different ways to help.
What Kind of Help Can You Give?
If you are not comfortable helping with money, is there any other way you can help your parents out in this situation? For example, can you drop off groceries to help them the next week or two? If they need repair work done, are you able to help out with the labor? You may choose to pay for their trips to visit you, or take the car into the shop for them. As your parents get older and retire, they may be on a limited income, and you may need to help them more. The amount of help you give may change when they reach this point. It is important to realize you are not responsible for your parents' debts when they die unless you cosign on the loan. It is better not to agree to cosign.
If you live nearby, you may be able to help with food or by helping with home maintenance and yard work. Helping to keep their monthly costs lower can help them cover their other expenses. If you have siblings, be sure that the siblings that live nearby are also helping out in this way. It is not fair to have one person carrying the majority of the burden.
Make Sure You Set Clear Boundaries
It is important that you set clear boundaries with your parents when it comes to finances, just like they should set for you. You do not want to form a codependent relationship with them, and money can really cause problems within a family. If you cannot help, explain the reasons why and offer an alternative solution or way that you can help. If you can help make sure you explain any conditions that you have set and be sure to let your resentments go if they do not handle the money the way that you wanted them to.
These rules also apply to helping extended family members. It is also important to realize that you can break free of an unhealthy financial family history. This may be a good time to talk about the expectations for caring for your parents as they age and set up guidelines that will work for your family.