When You Let Family Borrow Money – Ask the Pig #2

ask the pig

It’s like an advice column,

but not as judgmental or retrograded! Got a question about money? I’ll try to answer it to the best of my ability because we are all on this financial journey together!

So, gather around because the Pig is in!

This month’s Ask the Pig focuses on borrowed money.

Dear Breaking the Piggy Bank:

I loaned my sister $5K over the course of 2 years. For 3 years I’ve been telling her to pay her other debts before worrying about me. After letting the interest rack up, last Christmas, I finally paid off the credit card (I allowed her to use my credit for the loans) debt because she was likely never going to get to it. I told her that she doesn’t have to repay me BUT she’s never allowed to loan money and I wouldn’t be buying my nephew a Xmas gift. IMO not forcing his parents to repay me is a big gift. As his birthday approaches, I’m still suffering from the financial hit (cash flow, not emotional). How long can I use the I loaned your parents $5K so you can’t expect a gift from me excuse

– Broke Aunty

Dear Broke Aunty:

It sounds like you should be called Super Aunty, instead! First of all, I hope this response is still timely. I’m not sure when your nephew’s birthday was or will be, but at any rate I hope this is somewhat helpful. Now, it sounds like you decided to take on the burden of the financial responsibility that belonged to your sister and her partner, which is a TREMENDOUS action to take on. The unfortunate side of it is that now you are left feeling the cash pinch.

“How long can I use the I loaned your parents $5K so you can’t expect a gift from me excuse?”

A few thoughts:

I think that being honest with your nephew about how money is a bit tight for you at the moment can only serve to teach him the importance of how money works. In other words: money is not just something that we have unlimited access to. While there may be some people who may deem this as “taking it out on the kid” or “being stingy now”, I see it as a teachable moment for a child.

One thing I would caution about is pinpointing the money constraints on your nephew’s parents. As someone who was occasionally let it on the grown-up issues between my mom and her siblings while I was a child, I think there are certain things as kids we don’t want to hear about our parents or aunts and uncles. Being told that my parents are the reason that Super Aunty can’t buy my gifts, might make me unsure of how to take that information. Rather than holding the parents accountable in the form of your nephew, find teachable ways to explain how money should be budgeted. Since my line of work is around education, I’m also going to mention that the National Center for Families Learning has some great kid-friendly AND parent-friendly tools to learn about money. One such interactive game is A Day at Dollar General.

Furthermore, I think this is also a great time to demonstrate how love is not shown only in the manner of material things! I’m sure you can always give the gift of your time, as corny as that may sound. I think from a young age we are told by society that money and material things are what will make us happy. Being the aunt who engages with her nephew via quality time together: walks, arts & crafts, etc. , can also help teach that gifts aren’t everything. (Plus, I assume other people are also giving him gifts of some sort. What’s one less gift?)

I think keep doing you. You can keep the material gifts on the back burner for now.

A few other musings:

During the first Ask the Pig, Onicia (http://www.oniciamuller.com/resources.html)  (an overall awesome person, writer, comedian, project manager and Type A personality) left us with a useful comment that gives food for thought about lending money to family and friends —

My mom says when you lend money always consider it a gift and don’t loan more than you’re willing to lose. Money spent is money spent. If you wanted it to grow or be part of your rainy day fund, keep it in the bank.

This is a thought I had not previously considered. I mentioned this idea to my aunt, and she raised her eyebrow. Take it as you will, but it is at least a thought worth noting. 


Do you have something to Ask the Pig?

It could be anything from, “Hey Pig: What’s with your excel sheet?” to “Hey Pig: I still haven’t been able to save money consistently, got any tips?” or “Hey, Pig: How do I know which credit card to pay off first?”

Submissions are taken all month long and responded to every second week!

Can Someone Forget To Pay You Back?New Feature: Ask the Pig!

ask the pig

I don’t think we ask each other enough questions about money.

Reflecting on my own self, I didn’t want to ask someone a question about finances because I felt embarrassed. I hated the idea of the other person looking at me and thinking, “You’re (insert age here), and you don’t know this yet?” throughout my twenties. I know I can’t be alone in having felt this way. There are times I still feel this way.

We all have something to add to the conversation, even if we are only beginning to learn.

This is why I’d like to introduce you to ASK THE PIG. Who’s the Pig? Obviously, me. It’ll be like an advice column, only I won’t be teaching you about proper table manners!

You can click on ASK THE PIG on the website’s top menu to access the easy, simple, ANONYMOUS form. That’s right! You don’t have to leave your name or email. Just don’t be rude or tell me that I’m a terrible mess because I already know that and don’t need an unkind reminder, Internet!

Given my misadventures in money-handling, people I know sometimes ask me questions from what bank do I use to how I decided that bankruptcy was the right choice for me (emphasis on ME). If I don’t get any actual submissions via ASK THE PIG, then I shall just pull from these in-person questions or random people’s questions that are shouted into the twittersphere void.


Our first question…

comes from my friend who said I could use his name. James originally posted this question on Facebook and is responsible for me thinking ASK THE PIG should be a thing. Thanks, James!

If you’re in debt to someone for over $500 and have no inclination of paying up (albeit installments or even acknowledging the fact that you owe) How long until a reminder is needed? And if you’re not reminded and hoping the other person forgot, is it okay to “forget” as well? Asking for a friend.

If I have learned anything from being on both sides of this question, it’s that money can become a thorny issue between two people who have entered a lender and lendee relationship. Some of the comments responding to this inquiry definitely proved that sometimes we are quick to judge the other person for not paying back. Look, I don’t think anyone actually forgets that they owe someone money. A reminder is needed, but you should always be thoughtful in your approach. Of course, this is easier said than done when you might also be needing those $500 sooner than later. A lot of it depends on your relationship to the person and how to tailor that approach.

No one likes to be hounded, but you also want to make sure that they understand where you are coming from, too. When I borrowed money a while ago from Person A, I was reminded constantly and Person A also took the liberty to belittle me about my finances. When I borrowed money from Person B, I was checked in periodically after having set up a payment plan so to speak with Person B.

I preferred Person B’s approach because it actually taught me how to uphold my end of the lendee and lender relationship. Their approach taught me how to save money from each paycheck to pay them back, which also had an effect on my spending habits. It was a better learning experience.

Whenever friends borrow money from me, I typically ask when they can pay it back. If there are any issues, I try to work with them. Maybe $50 this week and the rest next month?

Definitely, don’t “forget”. It isn’t fair to you to just “forget” because at the end of the day, that is your money. Plus, you wouldn’t be helping the other person by just allowing them to also “forget”. It’s a better lesson to learn how to pay back money borrowed from a friend or family member, than when you have actual debt collectors calling every hour. The person who borrowed the money should hopefully consider this, too. Be honest, but approachable. If the person flat out shows no interest once you bring up the loan and possible options, then that’s a different story.

Another reason why YOU shouldn’t “forget” that they owe you money or let them “forget”: it can build up resentment on your end toward the lendee. That’s when relationships get real thorny.


ASK THE PIG will run once a month.


Make sure to come back and check out next week’s post where we talk about taxes like the adults we are!