Have you ever borrowed money from your parents?
Speaking from my experience, borrowing at the Bank of Mom and Dad isn’t always a pleasant thing. Approximately 15 years ago I was promoted to a management position on the East Coast. My company’s moving policy was – “move yourself, submit your expenses, we will reimburse you, maybe.” That weeded out a lot of tire-kickers but probably weeded out a lot of really good managers as well. Despite the shortsightedness of such an asinine policy for a multi-billion dollar company to arbitrarily use, I decided that a lack of money wasn’t going to stand in my way of success.
So I asked my Dad for $1,200. I was in the throes of financial stupidity and had no emergency fund, no budget, no savings account, no spare cash of any sort. My credit cards were maxed out and delinquent. I was behind on my student loans, behind on hospital bills, and behind on anything that required a payment … except rent and utilities. That $1,200 was just barely enough to rent a U-Haul, make my first month’s rent payment, and make the deposits for my utilities on my newly rented condo. But that was all.
Thankfully, my Dad said yes, despite the misgivings of my Mom. She wasn’t happy that we were moving her grandchildren 12 hours away and that $1,200 was enabling me to do exactly that. It was an emotional meeting we had that day and things only went downhill from there.
I had never officially borrowed money from my Dad and as a grown man of 30 years of age at the time, it gnawed at me. Voices inside my head kept repeating: “You aren’t able to take care of your own family without help. What kind of man are you?” I was in even more debt now and it truly bothered me. That loan was something that hung over my head every single day and my Mom’s dunning me wasn’t helping either. Even though the company didn’t reimburse me fully, after only 45 days, I was able to pay my father back with my monthly bonus in my new position (it paid substantially better than my previous position). My wife and I eventually moved back closer to my parents, thanks in large part to the experience I was able to garner as that store manager.
I haven’t borrowed from my parents since.
Back in 1996 peer-to-peer lending companies like Prosper and Lending Club weren’t around. I wish they had been. I would rather have borrowed from a stranger than have to stare at my family across the Thanksgiving dinner table knowing I owed them.
If you find yourself needing some cash, why not consider a peer-to-peer lending company like Prosper or Lending Club? Both have interest rates and terms that will let you keep your dignity and prevent that Thanksgiving turkey from tasting a little strange. I dunno, maybe it’s the canned cranberry sauce?
On the other side of the coin, if friends or family ever come to me wanting to borrow cash, my plan is to direct them to Prosper or Lending Club and then help fund their loan myself. I believe that’s the best way to maintain a good relationship as well as keep money from causing hurt feelings and bitterness.
What about you? Have you ever borrowed from friends or family? Have friends or family asked to borrow from you? How did it work out? How did you feel about it?