Family and financial assistance can be an awkward combination. Paying down debt, medical bills and tuition costs can all take their toll on personal relationships. So what are the top 5 things you need to ask yourself before helping out a loved one? Well, first you need to make sure that you can bail out a family member without sinking your own boat. Borrowing from your retirement fund to pay for a loved one can put you in long term trouble or at immediate risk in an emergency. So make sure your financial well being comes first. If you’re giving a gift, does it have strings attached? To make sure that financial gifts don’t generate resentment you need to be clear on how spending it can make you happy. If you’re feeling hesitant to give, it may not be the best move. If the gift is a loan you should set a repayment schedule from the beginning and stick with it. If the money isn’t paid back it can destroy a relationship so your plan and terms shouldn’t be based on trial and error. Getting an attorney involved has to be your judgement call. Sometime just an IOU is enough but professional help can add more of a sense of accountability. Commitment, communication and understanding can help strengthen bonds with loved ones, but both sides need to take the situation seriously. That means approaching financial aid from family in a business like and responsible way.
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