Ask Amy: Advice for the Real World

DEAR AMY: My mother frequently borrows money from me at the last minute for various reasons. The “loan” amounts have gotten progressively higher as I’ve climbed the ranks at my company. I’ve been paid back 30 percent to 40 percent of the time, but she “owes” me close to $10,000.

My mom lives in a Third World country where the cost of living has been increasing. However, she makes questionable decisions regarding her finances, including extensive online shopping, and helping my fully able-bodied brother in Florida with his expenses. This includes “loaning” him money to buy a car and an engagement ring for his girlfriend.

I live in New York City and I’ve been trying to buy an apartment. I found a place and want to make an offer. As luck would have it, Mom just asked me for a loan for $4,000 to pay off the mortgage on a piece of property she’s renovated, which she inherited from my grandmother.

She says she’s in a bind and the payment is past due. She won’t ask my aunt (her sister) who co-owns the property because she doesn’t want to appear like she can’t handle her finances. My aunt has her own issues with her finances and may soon be out of work.

Loaning my mother the money would jeopardize my ability to buy this home. But not loaning the money means they’d be in arrears for the mortgage and possibly face other repercussions I may not know about.

Do you have any advice?

— S

Dear S: You seem to be shoring up a financial house of cards, where money flows back and forth among family members, always in the form of “loans” that are seldom repaid. According to you, both the frequency and amounts have accelerated. You should expect this to continue.

You will not be able to take care of people during true emergencies if you aren’t able to secure and stabilize your own financial situation.

A great way to handle family loans is to use the “Netflix” model (not the video-streaming model, but the DVD-loaning model): Money will be available only when a previous loan has been repaid.

In your case, you can give your mother a break without additional outlay. Tell her that you can’t loan her this money, but that you will “forgive” previous loans you’ve made to her. Her account balance is now zero.

If you think it’s necessary, you might want to give (not loan) your mother a small amount each month via automatic deposit to help with her ongoing expenses.

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