As a parent, your first natural instinct is to help your child if they find themselves in any sort of distress. Your child feels the same way about you and would be first in line to offer financial help if you need it. Whether borrowing the money you need to see your through is the right way to go for everyone involved depends on various factors, including your own financial picture and your child’s situation.
Take Personal Stock
Before you ever considering borrowing money from your child, you’ll need to determine whether you have the means to pay them back. Putting your child in a financial bind later will stress both of you out and you don’t want to make a repayment schedule you can’t manage.
Review your current household budget, savings accounts and other assets so you’re aware of what you need and when you can pay it back. Don’t overestimate your abilities, as you must be honest with your child so they don’t expect money they won’t receive.
Consider the Circumstances
Evaluate why you need the money. Your child has the right to know and it can help you determine what you may need to change in your life. You’ll both be more comfortable in general if all the details are discussed before the money changes hands.
Borrowing money from family to pay off debt, for example, is usually a smart way to go if you’re looking to cut down on the interest and consolidate your debts without taking on another creditor who will charge substantial rates or fees.
If you’ve found yourself experiencing a temporary financial hardship, such as money lost from missing work due to illness, borrowing from family gives them the opportunity to help while keeping you afloat until you’re back on your feet. However, unless your child is wealthy and can support you indefinitely, you’ll need to work out alternatives if your financial situation is long-term or possibly permanent.
In cases where you’re in a financial free-fall because of poor decisions you’ve made, you need to consider the effects of borrowing from your child seriously before you make your request. Unless you’re truly committed to changing your financial habits going forward, you may not be able to pay your child back and you’ll just end up in the same situation down the line.
Don’t Be Afraid
Don’t be afraid to examine all sources of help if you’re hesitant to ask family members for money. If your still stuck, give the income support number a call. This number can help you connect with agencies who may be able to locate assistance you qualify for.
If your child asks to review your financial information, be as open as possible about it. According to MSN Money, your child may be able to help you find financial drains you’re overlooking.
Neal Bricker has covered financial topics and news for various websites and other publications. He keeps up with current trends and stays on top of the field by researching and sharing information.