The Dangers Of Borrowing Money From Your Family | Refresh Financial

The Dangers Of Borrowing Money From Your Family

Borrowing Money From Your Family

When it comes to money, it's tough to admit when you're in over your head. We tend to grasp at anything that can help us once we start feeling the growing weight of debt. When we need financial help, the first people we usually turn to is family, but this can be a bad idea. Here are some of the dangers of borrowing money from your family.

Don't Dig Yourself Deeper

Although you may not be accumulating interest on the money you borrow from family, and you won't see it go to collections or show up on your credit report, it's still a debt. The answer to overwhelming debt is not to add more debt. By asking your family to borrow money, you're actually taking on more debt and could be digging yourself into a deeper hole.

You also need to consider your ability to pay your family back - if your debt is already too much for you to handle, what makes you think you can manage to pay it all back, plus even more to your family? You need to take off your rose-tinted glasses before asking yourself this question and answer it honestly. Will you actually be able to pay your family back, in full, when you say you will?

Potential Relational Consequences

Will your relationship with your loved one survive if you are unable to pay your debt to them back? Often,e the lending party feels used and taken advantage of when you borrow and don't repay. Are you willing to drive a wedge between family over debt? Circumstances can change, and it's not always easy to fulfill financial obligations. Make sure you understand the potential negative consequences when it comes to borrowing from a family member.

Asking a family member for money can put them in an awkward position, and even if they agree, it's possible they could harbor resentment towards you. Are you willing to risk this over money? How will you feel about your family member if they refuse to lend you the money? Would you end up harboring resentment towards your family member because they said no?

Your Life Scrutinized

Often, when a family member lends money to another family member, the lender can suddenly become very critical of your lifestyle. "You bought a new bike? I thought you were broke?". Now that they're financially invested, they might not keep their opinions to themselves. They may feel they have a right to scrutinize your lifestyle. Are you ready to have your financial decisions put under the microscope?

These are just some of the possible outcomes of asking your family to borrow money. If you're in a tight spot financially, consider seeking credit counseling or a credit building program! Seeking the advice from professionals or building your credit score are two great ways at getting out of debt, and preserving your family relationships!

Have you ever borrowed money from family? How did that turn out? Let us know in the comments!

<< More Blog Posts

Leave a Reply

Not sure if we can help you?
Check out our products.
[random_testimonial count="1"]