I'm German, in my mid-20s and currently living together with my girlfriend without kids. I earn a fairly good salary for my age compared to other family members and was always a saver (cheap car, no expensive vacations, ...) to fulfil my ultimate life goal of buying a house (real estate) for myself. Recently I also inherited some money which I of course also want to spend on my house.
Sadly, some of my (close) family members (like my sister/her husband and partly my mother) can't handle their own money/income that well (at least this is my impression, of course, this view is biased). They spend money on stuff that I never would spend so much money on (e.g. leisure time, amusement parks, vacation together with their kids). It is also not that they are poor. They have a very good double income.
Regularly they ask me for a loan to pay their stuff because they can't. The amount of money they owe me is getting higher and higher. Of course, I want to help my family in critical life situations, but not to let them live their dream life while I lose money to invest into my future house. If I try to say no, they come up with sentences like:
- We need that new car because we both have jobs (one of the parents could easily travel by bike)
- Get old enough to have kids, then you will understand
- You don't even need your own money
- We need a cleaning lady because I can't handle it alone
Eventually, I'm giving them the loan because I don't want to be seen as a complete mug.
In some bigger cases, I have a valid, written contract. For smaller amounts, I usually said to them to add this to the final volume of the money lent. They started paying back but stopped quietly (!) doing so for some months until I asked them to start paying again (and they did). I could have cancelled the contract (because there's a clause for this case), but eventually I didn't.
They have interest rates, far lower than from a bank and also including an agreement for regular payments, which they have not fulfilled all the time. Because they didn't, the interest rate being so low caused the whole loan to be a negative game for me because of inflation. I am in no way wealthy, I just have above-average savings and earnings which I currently don't spend to save on my life goal.
Finally, this pattern of behavior has set a bad example for my nephew: he is now asking me for a loan. His own mother can't lend him any money because the next vacation is already booked.
How to avoid being seen as a cash cow in my family without being seen as a grasping and unhelpful person? My goal is to not give them any more money in the future.
A thing I always ask myself is whether the problem I have is really on my own side and it should be okay for family members to ask for money even for non-critical stuff.
Responses to comments
Did you get anything written down? Or does the exact amount and even the fact that they did loan any money at all come down to your and their memory (or conscience)?
In some bigger cases I have a valid, written contract. For smaller amounts I ususally said to them to add this to the final volume of the lent money.
Are they actually paying back any of the "loans"? How much total money do they owe you? €5k 10k 20k?
Yes and no. They started paying back but stopped quietly doing so for some months until I asked them to start paying again (and they did). I could have cancelled the contract (because there's a clause for this case), but eventually I didn't. The total money lent is more than 10k.
Are those loans with agreed interest and regular payments, or just "pay me back when you can"?
They have interest rates, far lower than on a bank and also regular payments, which they did not fullfil all the time. Because they didn't, the interest rate so low caused the whole loan to be a negative game for me because of inflation.