Money can complicate relationships
Leaning on friends and family for financial security is remarkably common. More than half (57%) of Americans said they borrowed money from friends, according to a 2024 survey by Bread Financial. And, 30% of these borrowers said they never repaid the loan.
Meanwhile, 37% of American homebuyers had relied on the bank of mom and dad (and grandma and grandad) to finance their purchase, according to a recent survey by Compare the Market.
The trouble with these financial arrangements is that they can blur the lines between business and personal. Friendships and family ties are not built on strict scorekeeping, but borrowing or lending certainly is, which is why money can complicate these connections, according to the Society for Personality and Social Psychology.
These complications and gaps in expectations can ultimately break the connection altogether.
One in five respondents to Bread Financial’s survey admitted that they were no longer friends with someone because of money issues.
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Learn moreSetting clear boundaries
Putting guardrails on your finances can help you maintain healthy relationships.
Practice saying “no” to requests for money in a firm but polite way. Also, consider offering alternative solutions to others’ financial problems before you consider offering your own money.
For instance, a friend struggling with debt or an adult child struggling to buy their dream home might be better served by a professional financial planner helping them to solve their issue, independently.
If a loved one is in financial distress, you could consider a one-time gift or limited monetary support. The key is to have an open and honest conversation about your limitations and expectations.
For instance, if you expect to be repaid, set out a schedule for payments. And, only offer money you can afford to lose and never see again.
Clear, respectful dialogue can help prevent misunderstandings — and preserve your relationships while protecting your financial well-being.
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