Sister has asked me to lend money - how to deal with it

TBagpuss

Hnestly, I think the best thing would be to say no.

However, uf you feel that you can't do tat, then lend her this £2,000 on the basis that you have a written agteement, signed by both of you, which sets out how much you are lending her, ndthe terms on whichshe will repay it (e.g. £1,000 by 31.01.23, the balance by 28.02.23, or 4 payments of £500 the first being paid on 15.01.23, or whatever she says she will pay.)  And tell her that this is a one off, that you don't feel comfortbale lending money to family and won't be able to do it in the future. 

Only lend it if you are willing to lose it asthe reality is that she probably won't repay it. 

Howeer, if she pays anything at all, keep a running total showing how much she repaid and when.

If she asks again, then your answer can beeither "I can't afford to lend you any more as you haven't repaid the £2,000 I lent you in December" or "I can't afford to len you any more asyou still owe £1,800 from the £2,000 I loaned you in December"  or "I don't feel comfrotnable lending to you again, becase last timne you agreed that you would repay me  within [agreed timesale] but actually you didnt repay it for [actual timescale]"

(Inthe highly unlikely event thatshe pays you back in full and on time then you can still refuse further requests, perhaps on the basis that you felt uncomfortabke mixing family and financial relationships. 

Also - I understand you fel that you mum wouldhave wanted you to help, but equallyu, I am sure that your mum would not have wanted you to jeopardise your relationship with your husband,or to put your sister's welfatere ahead of your own. She wanted to be fair to you both - it wouldn't be fair for you to end up gifting part of your inheritance to your sister any more than it was fair (or your mum allowed) for her to end up with more when mum was alive. 

And your sister is not in need. She chose to take multiple holidays instead of prioritising her bills.
IF she is struggling you can suggest that she looks into whether there are any benefits or care assistance she or her husband may qualify for, or suggest that she speak to StepChange to get help with managing her debts, or that she check out the budgeting and debt boards here to help her to manage her ney better. So you can sytill offer help, just not financially. 

NBLondon

ellenvan said:

If you do go down the route of giving her money - Pay the bill or whatever she needs it for directly then you know she is not just using it for buying clothes or other non- essentials.

This.  If it is a genuine unexpected bill (maybe connected to her husband's condition) then helping out directly is a decent thing to do.  If sister doesn't go for this approach then it will be a big clue to the likelihood of being repaid.

As others suggest - offering half is also a possibility.  Again, the response may be a clue as to future behaviour.

It's a tough position to be in - but if you already know that money wasn't paid back to Mum, then why would it be different for you?

FreedomBringsPeace

One of my pet peeves, people who watch other peoples money so they can make a request. People who party with their money and expect others to bail them out. Apart from unexpected repairs there are no unexpected bills. Your sons education is your priority. Her holiday and dining budget is not. Personally i think she has a cheek.

If you got £2k and burnt it in the garden would you miss it!? Be upset? Annoyed? Because thats what you would be doing. She has a history of overspending and not paying back. If she can stick to a budget to pay you back she can stick to a budget to live sensible if she was she would also have had savings to fall back on.

Best to point her to Dave, Ramsey and say no.

Id send her a text, say after careful consideration you wont be able to lend her any money. You hope she gets it sorted. 

You dont need to explain why not thats your business. Any attempt by her to discuss your money going forward needs to be stopped. 

coffee_cake

Definitely say no.  If you give an inch, she'll take a mile.  Lend her the 2k, you won't get it back and when (not if) she wants more, is it likely she'll try and guilt trip you into it, seeing as you've lent her money in the past?
Experience has thought me never again to enter in to financial transactions with family.  

sheramber

What is this unexpected bill? I would need to know if it was an essential bill or not.

Remember,' NO ' is a full sentence. No need for excuses, just 'no'.

DE_612183

I think as other people have said - don't LOAN her the money GIVE it as a GIFT.

In her eyes a loan is something she will pay back "some day".

A gift is just that - something that will not be repeated.

easy

frugalmacdugal said:

Hi,

suggest a zero interest credit card, or has she maybe maxed out any she had?

Because of the mortgage defaults prior to her house sale 6 years ago,  her credit history was shot to pieces.  I'm not sure she could get a 0% card.  They have one card still in her husbands name,  but I think the holiday they are about to take is on that,  I'm guessing at a standard interest rate.

Sea_Shell

How do you know of your sister's financials?   Credit card balances etc.

Has she been open with you directly, or do you only know what your mum used to tell you?

Sncjw

Is it actually unexpected billa.or does she want money for spending on the upcoming holiday..she needs to get grip on her finances and not rely on others to fund her holidays and lifestyle. 

You obviously don't want to as you say about the history with your mother and also that she goes on holiday alot which I have a feeling you don't think she should. 

Do what is best for you but I have feeling if you lend the money she will be back for more and she will say well you lend to me last time. 

turnitround

easy said:

OK, here goes... 
My sister has always lived beyond her means,  mortgaged to the hilt,  credit cards up to their limits,  borrowing from parents. 
A few years ago she had to sell her big-ish house because she could no longer meet the mortgage payments.  Building soc forced the sale. 

She retired early due to disability,  her husband now has Alzheimer's,  which is progressing quite quickly. 
Last year our mum died,  and we were both lucky enough to inherit a sum of money,  obviously the inheritance was shared equally.  Not a vast fortune, but a comfortable sum. 

Since then I put my money away -  I want to buy a bungalow when I retire,  hopefully in the next 3 - 5 years. I'm still supporting my student son,  so still working full time aged 62.
Sister has had several short holidays in the last 18 months since Mum died , plus one VERY big one,  and about to go abroad on an expensive holiday for 2 weeks over christmas.  She also goes out for meals a lot.  She says they need to go out and on hols while they still can.
But she has spent all her money.  She's asked me to lend her a sum of money,  a couple of K to help her pay some unexpected bills.  She says she will repay me early next year.  She has a plan .
My husband is incandescent with rage ...  I'm pretty pee'd off myself.   But I can't really say no at this stage - I know my mum would say don't leave her high and dry in a panic. 

Can anyone advise on how I tactfully say "This is a one-time only event.  I can't afford to lose what I am lending now,  and I'm definitely NOT going to lend any more".

I don't want to fall out with her or get resentful  

Any ideas ??

Is it possible that the 'unexpected bill' has arrived just as she realised that she had not saved up enough spending money for this imminent holiday?