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When Friends & Family Ask for Money: How to Make Smart Decisions & Keep Relationships Intact

When Friends & Family Ask for Money: How to Make Smart Decisions & Keep Relationships Intact

By Stacey Tisdale (sponsored partner) • April 16, 2019

In 2009, I conducted a workshop for a professional sports team about managing money. It was a bittersweet moment for this fan. I loved this team, yet they were having a horrible season.

The evening before, I invited a friend who was a former professional athlete to join me for my presentation. I was hoping he could help me better engage what I feared would be a distracted audience after yet another horrendous loss.


Inviting my friend turned out to be a good move. When I asked him to share what he found to be his biggest financial challenge in his professional career, he said without hesitation, the loans he made to friends and family. That quickly grabbed the team’s attention, with most heads and expressions signaling agreement. The entire energy in the room changed.

In my work as a financial journalist, and my research in the financial behavior of pro athletes, I was very familiar with the reality that most run into huge financial challenges — even bankruptcy — soon after their sports careers end.

According to Sports Illustrated, within five years of retirement an estimated 60% of former NBA players are broke. By the time they have been retired for two years, 78% of former NFL players have gone bankrupt.1

Size Doesn’t Matter

The public is quick to blame this on extravagant and irresponsible spending, but in reality, many of them also fall victim to the pressure to lend, as well as support family, friends and entourages.

Psychologist and psychotherapist, Dr. Jeanette Raymond, says part of it is also chemical. “We’re chemically wired to be drawn to situations where we can rescue someone. It’s very hard to stop.”

“When we help someone in need, we get a rush of dopamine that is the same as the release when we feed an addiction,” she adds.

While this dynamic is exacerbated in athletes and celebrities, the pressure to lend comes up at some point for all of us — particularly in groups that experience financial challenges. A survey by Prudential Financial finds that African-Americans are more likely than other groups to bear financial responsibility for friends and family members, due to factors such as higher incidents of unemployment and barriers to wealth building.

5 Things to Remember

If a friend or relative asks you for financial support, be sure to consider the following factors:

  1. Don’t be an enabler: Does this friend or family member often seem in financial crisis? If so, you could just be enabling bad behavior. If you choose to make a loan, make it with strings, and make them commit to changing their patterns. Make them show you a financial plan, give you a repayment plan or seek financial counseling before you hand over any funds.

  2. Put your own needs first: If you’re having trouble making ends meet, have significant financial responsibilities on the horizon, or don’t have enough money in emergency savings to cover at least six months of living expenses, you can’t afford to lend money. If your loved one doesn’t understand that, you need to be having a different conversation.

  3. Remember the person in the mirror: It’s you who must look in the mirror after you deny a sibling, parent or best friend a loan. Think about how you will really feel. Be honest with yourself about what you can really live with.

  4. Be realistic: About two-thirds of people who lend money never see it again. Don’t count on getting your money back; and talk to your accountant about IRS codes for gift giving.

  5. It’s not just your decision: Do you have financially dependent family members? Remember it’s not just your financial well-being that’s at stake. Discuss the impact on your family budget and find out how everybody feels about making the loan. Make the decision together. You’ll be glad if you’re not solely responsible for the outcome.

Love Will Keep Us Together

Financial stress can send our minds and emotions into flight or fright mode, as our brains literally connect money with our ability to survive. And as we all know, fear can often cloud judgment.

Remind yourself again and again to bring your attention to the connection you have with your loved ones’ hearts…even when their hands are reaching for your wallet.

Stacey Tisdale is compensated by OneMain. Click here to learn more about our featured financial experts.


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