what should i do when i lend money to son to buy car

What Are the Extenuating Circumstances?

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It'due south equally of import to consider the specific problem your parents are facing then determine whether or not giving money to your parents is the solution. Having a discussion with your parents with a fiscal advisor present can assist you identify their need for aid in a non-combative way.

Providing monetary back up may make sense in any of the following situations:

• Job loss: If your parents are notwithstanding working, only ane of them lost a job, consider giving them a loan to help them put nutrient on the table while looking for a new job. Your parents tin repay the money at an agreed-upon timetable when one of them secures employment.
• Illness: A similar reason might exist that one of your parents is ill and is not able to piece of work. As a consequence, they might be facing serious medical bills. Giving money to your parents in this scenario can enable their financial recovery as they make a concrete recovery.
• Essential repairs: These are one-time instances that may warrant help. Your parents may need aid with a car repair, for example.

However, if your parents are demanding money considering of unhealthy spending behaviors like gambling or shopping addiction, complying with the request may really hurt them. A steady supply of coin from you may enable them to continue these behaviors and put them into serious debt, so you're better off encouraging them to seek help from a credit counselor for their issues before you assistance them out. These professionals will review your parents' financial picture and identify problems that you may non be able to spot yourself during an initial (sometimes costless) session. They will and then recommend solutions for better money management.

If you extend your parents a loan, at that place's e'er a take chances of default and the permanent loss of the funds you doled out. Plus, if you don't charge involvement or you charge below the market interest rate, the IRS may characterize your loan as a "gift," and you lot, the lender, might have to pay souvenir taxes on information technology.

Does Your Spouse Concord?

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One time you are married and your finances are combined, if 1 spouse isn't comfortable with giving coin to your parents or theirs, y'all shouldn't do it. If your spouse agrees, take the time to take a articulate chat about the expectations of the fiscal support and what to exercise if your ain circumstances were to change. Never hide these types of transactions from your spouse.

Moreover, it's important to care for both families equally. Ane spouse's parents may non need assistance, merely if both are in tight situations, you can crusade marital tension by helping out just one family. Of course, if extenuating circumstances similar addictions or excessive spending apply, you may demand to fix clear limits on one family and find different ways to help.

What Other Kind of Help Can You Give?

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If, based on the above questions, you decide that giving coin to your parents isn't an option, make a concerted effort to help your parents through non-financial means.

For example, yous might exist able to drop off groceries for a set menses of time to assist them save money on gas. Or, if they need repair work done, you might be able to help out with the labor to reduce their maintenance expenses.

Helping to go on some of their monthly costs lower tin assistance them cover their other expenses. If you lot take siblings, ask if other siblings that alive nearby can aid in this endeavour so that you don't have to shoulder the burden alone.

The extent of financial assist your parents need may change when they reach the age when they are on a fixed income. Even then, realize that you're generally not responsible for your parents' debts when they dice unless you lot cosign their loan or sign on as a guarantor on the admission form of a nursing home or other health facility.

What Are Your Limits?

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Information technology's important that you set clear boundaries with your parents when it comes to giving coin to them, just like they should do if lending money to you.

You don't want to create an unhealthy reliance on the money in perpetuity, and nor should you lot encourage them to spend the coin frivolously and continue asking for more than. If you can assist, establish a programme for payments that clearly spells out the payment amount and elapsing and whatsoever expectations for how the money should be spent. Fix upward a timetable for repayment if extending a loan. If you cannot aid, explicate the reasons why and offering an alternative solution.

These rules besides apply to giving money to extended family unit members, which is an option if you accept a salubrious financial family history. When your mom or dad asks for money, this may also be a expert time to talk near the expectations for caring for your parents as they age and prepare guidelines that will piece of work for your family.

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Source: https://www.thebalance.com/my-parents-asked-me-for-money-what-should-i-do-2386101

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