Reduce the Chances of Money Conflicts With Our Families

by David Ning · 15 comments

relationship

Families are great. They are the first ones to come help, and the last ones to leave us when we are in trouble. When we were young, we lived with our families, and we start our very own later on in our lives.

Families however, make money matters even more complicated. Let’s face it, money is important to us, and anything important can potentially create conflicts. Most people enjoy a very good relationship with their families because there is no money conflicts; for others, money (or the lack of) can become a sticky subject.

Most people believe that the lack of money creates conflicts, but having money is just as troublesome. When parents have money, sometimes their children will try to fight for the inheritance, directly or indirectly. This is one of those unfortunate events that we all dislike when we hear it, but we see people do this time and time again. Another example is when our family members are in trouble and we become the “defacto” go to person for free loans.

So, if having money and not having money both creates conflicts, what should we do?

Here’s what I suggest. Although we cannot eliminate conflicts completely, we can drastically reduce the possible fiction points by being able to sustain our own finances. If we cannot stop everyone else from asking us for money, at least we can stop asking others for it. This also means taking the appropriate risks with our finances, and doing our homework so we are prepared for the consequences.

For business owners, this means they expand at a controllable level. For the rest of us, this means that we be responsible and create an emergency fund. Not gambling excessively or buy a house that we never really could avoid (something far too many did the last few years) also comes to mind.

If we don’t need financial help from our family members, I bet our family life will improve too. Money matters, but family matters a great deal too. So create a happy financial situation, and relieve the potential stress it will have on our families relationships.

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{ 15 comments… read them below or add one }

LiteDeals March 18, 2008 at 10:03 am

well, if you ever need to borrow money from your family (or feel compelled to lend money to a family member), set up an “official” loan via Prosper or Virgin Money. You are doing both of you a favor by doing that.

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Miracle Blade March 18, 2008 at 7:08 pm

I think everyone just gets touchy when it comes to money. Family or not.

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lena the thinker March 19, 2008 at 6:36 pm

Money issue shoudnt be a cause of conflict especially for a family. Relationship is more than just a material thing.

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Nseobong Victor Okon March 24, 2010 at 7:00 am

Love your post. Money should not be a problem in our families. Money should rather unite families.

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avanti March 30, 2012 at 2:53 pm

It is true that money shouldn’t be a problem in families, but more often that not it does. Too many times money is loaned without any real plan or documentation. Throw in that some family members simply don’t have that belief that paying back to family is a priority and instead think that they are at the bottom of list, if they are even on it. Sometimes it is better just to give the money and not get into the stress of trying to get paid back.

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LiteDeals March 20, 2008 at 7:12 am

Moreover, if a family member come to you for money exactly for the expectation that he does not need to repay it later, it become a big moral hazard problem and is bad for both of you.

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Mayank Rocks March 23, 2008 at 4:12 am

Well said. My dad and his own brother have been engaged in money conflicts. More money is always trouble. So whenever its a plan of more money. Alone or working with trusted people is the best option.

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Nseobong Victor Okon March 24, 2010 at 6:51 am

We will always need our family to cope with money issues very well.

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Mayank Rocks March 23, 2008 at 4:12 am

@ Miracle

Not really.

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Dividends4Life March 27, 2008 at 6:47 pm

I have found it is best not to mix money/business with family and friends. It seems to always divide.

Best Wishes,
D4L

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familymoney September 1, 2010 at 10:43 am

It is certainly the experience of many that money can cause issues in families and also with friends. My own Father said ‘Never do business with family’. Certainly if you casually loan money to family or friend you should think of it as a gift instead of a loan. Then if you get paid back, all is well and if not, you feel charitable and still have a good relationship.
However, it is also true that families can learn to understand and deal with each others money attitudes and values. Use of multi generation family meetings to discuss and agree on long term goals for the family and to hash out varying values about money can be used to allow family generations to help each other out. However, this is certainly not an easy task.

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Myself December 8, 2010 at 12:17 pm

Whenever I give money to someone (whether they just want to borrow it or not), I consider it a gift. If they choose to pay me back, then it is very much appreciated, and I may take them out to lunch/dinner using some of it.
If I give our children some money, it is money that is also gone, never to be returned, and I can only hope that I can guide their spending habits to be better than mine were in my youth. I can/will not demand that they take all their birthday money and put it in the bank. I also can/will not demand that they spend it a certain way, since I realize that is how they also learn.

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Thordar January 8, 2011 at 2:34 pm

I concur.

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question for you November 27, 2012 at 8:48 pm

Liked your post, and tempted to ask a question.

I was the one with big paycheck in my family. In crisis time, I had bailed out elder brother from business losses. Helped elder sister in my buying home for leaving. This was always done with intention to support my family thinking I was blessed more financially and should share wealth and think it will likely never come back.

one year back, I took a sabbatical and thought I will start on my own. Though I have good corpus to support myself for couple of years (personal finance planning) but I am feeling the pinch when I am not able to help extended family like my elder brother buy a home or my younger sister going through financial crisis. Touching my corpus to help or not giving both options are causing undue stress thinking I am not sharing my wealth or become less capable than yesterday, and I am tempted to think to go back to secure job with fat paycheck. I am wondering what is right?

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Linso October 22, 2013 at 9:30 am

Myself, the right thing is to do what makes you happy. Keep in mind that if you concentrate on building wealth and by the time you’re successful and there is no family member to share with you, you would have labored in vain. I can see that you derive a lot of happiness when you are able to extend a hand to help a family member in need, so I am.

Peace !!

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