Millennial Money - FT Money
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They say don’t mix money and friends. In my case, I have chosen not to mix money and family any more.

I recently found myself in the situation of having to say no when my parents asked me for a €10,000 loan to fund construction work on a beautiful property in Europe that they’ve been turning into a family-run B&B and wedding venue.

This was not the first time they had found themselves in a tight spot. Four years previously, when I was 23, I’d loaned them €10,000 and had a strenuous time getting paid back.

Hit by the 2008 financial crisis, declining revenues from my father’s business and a credit crunch, my parents have been relying more and more on their kids for financial help. But when they asked me recently if I could loan them the lump sum, I declined.

Like a lot of millennials, I was never taught good financial principles. My parents didn’t set a good example, enjoying years of rising property prices and plentiful work in the good years, without putting much aside for the lean ones.

I, on the other hand, have always been a saver since my teenage years.

Student debt was my first encounter with serious financial stress. I miscalculated how much my final year would cost me and struggled to find a job after I graduated. Having lent my parents my savings, I had no safety net to fall back on. The stress of pressing them to pay back the money earlier than they expected, on top of searching for a job and figuring out how to pay the rent, was too much to handle. “Never again,” I promised myself.

We hear an awful lot about the Bank of Mum and Dad (Bomad) but the cash flows both ways. There is mounting evidence that the Bank of Son and Daughter (Bosad) has a growing loan book.

A recent report by M&S Bank found that 49 per cent of millennials had provided some form of financial support to their parents. The bank claimed that, on average, 23-38-year-olds have given £1,161 worth of financial support to family members over the past 12 months.

It’s possible that some parents are struggling after lending too generously to their offspring. Last month, Legal & General claimed that “Bomad” is now the UK’s 10th biggest mortgage lender, with parents lending or gifting their children property deposits of more than £24,000 on average.

L&G fears parents may live to regret dipping into their retirement savings. Certainly, if you search the web for “how to say no to family” you will mostly see stories of older generations discussing how to set boundaries for younger relatives asking for cash. Plenty of them also wished they could say no.

Here’s some advice I’ve learned through making my own decision that may apply to either situation.

Hold your ground
This might seem simple, but once you’ve decided whether or not to lend a family member money, don’t change your mind. There’s a chance they’ll look for a solution elsewhere and you might not end up in a tense family dinner situation.

If they persist and you quickly fold, your family will lose confidence that you had good reasons to refuse in the first place.

Protect your personal boundaries
Financial problems within the family often feel overwhelming. Once you’ve been asked for money, you’ll almost certainly be clued in on some of their financial troubles and they will want to unburden themselves more, if you let them.

For me, that meant waves of emails, synchronised with phone calls and Facebook messages, from my family telling me I urgently had to answer their money concerns. The communications often came during work hours.

Those kinds of pleas from the people who gave you life are hard to ignore and can add a high level of stress to your daily life.

So set boundaries. It’s OK not to answer emails from your parents when you’re at work. It’s fine to let phone calls go to voicemail. You can also create a special folder in your inbox that sends all your family’s messages to “personal” so that you only see them when you’re ready.

Look after number one
If you are involved in an accident, the standard advice is to check you’re not in danger before you help someone else. Likewise, you have to consider your personal financial situation before lending money to others.

In my situation, I realised that if I lent money to my parents I would derail my own savings goals and weaken my financial resilience.

Consider the amount of stress that granting a loan might put you in and how it could affect your future financial stability — especially if they are unable to repay. If lending money is going to strain your finances, hurt your credit score or harm your financial independence, remember that you come first.

Only take your own advice
When it comes to family money issues, people around you will have strong opinions. If you ask friends for advice, be warned — they’ll probably have something to say.

One friend’s verdict was: “They’re your parents, you owe them.” That piece of advice and the guilt trip it led to, made me realise that no matter what decision I made, it would be mine and mine alone.

So only take your own advice. You might resent others for leading you to a decision you didn’t want to make.

Making tough financial decisions won’t ruin your relationship
No matter what happens, if your family loves you, they will be OK with your decision.

If you’re uncomfortable lending money, doing it anyway will hurt your relationship. You’ll probably be angry with them for asking in the first place. If you weren’t in a position to lend money, it could imperil your finances and put pressure on them to pay you back quickly.

If you decline a loan, your family is most likely to respect your choice and move on. It’s better to refuse than to build resentment about a decision you didn’t want to make. Rather than ruin your relationship, saying no could actually save it.

The author works in the FT’s digital team.

Have you experienced something similar in your family? Have you found good ways to make these kinds of decisions or have helpful tips to share on how to deal with money and family? If so, please post in the comments below or email money@ft.com and keep this conversation going.

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