I'm wondering if anyone has advice on how to respond to my 29-year-old brother's request for a loan.

By his choice, he remained unemployed after finishing college last December and opted instead to move in with my parents, with a plan of relocating to far-away, high cost-of-living "City" within the next half year or so. Long story short, he did a bunch of work at home for my parents for which they paid him $6k ($1k more than he requested), expressly telling him that that was all the help they'd be able to give him.

At that time, my brother began his trek to City to look for shared housing and a job. He chose to stretch the drive into a nearly three week vacation to explore different areas of the continent along the way. About two weeks into his trip, he called me to ask for a $500 loan because the transfer he requested from his online-only bank to his brick-and-mortar bank had not gone through before the start of the weekend, and he just needed something to tide him over the few days until the transfer completed. He’d pay me back as soon as the transfer went through. No problem -- I sent the money instantaneously by same bank transfer.

Now, a few weeks later and he hasn’t paid me back. Instead, I get a phone call that he found a place to live, but needs to pay the first and last month’s rent up front, and somehow he’s $800 short. He spent over $5k in just one month! He’s calling my dad, my mom, me, and our other brother for help until he can take a loan out on his paid-for car (which the credit union has already told him they won’t give him due to poor/limited credit history) and/or get a job.

Background: He has never been good about saving money. He’s quit several jobs just because he was tired of working or got into a disagreement with a boss or co-worker, though I think he has matured beyond this last point by now. He’s 29, I’m 30, and our other brother is 26. Parents have no/low-income. Youngest brother and I *could* help him out, but we both also have loans to pay back (him student loans, me car and mortgage), recently loaned a large amount to other family, and also prefer frugal lifestyles in order to aggressively pay down debt and plan for future marriages, kids, retirement, etc. We are not thrilled about paying for our other brother’s beer and yoga classes. On the other hand, it’s our brother, he’s all alone thousands of miles away from any other family, he doesn’t have a job yet but is trying, and he’s trying to secure his own living quarters. Still, we can’t help think that if he flushed that much money down the drain in the last month, any other money sent is sure to follow and we'll continue to get more requests.

Please, I look forward to receiving any advice on what to say to him!

"NO!" is a complete sentence.

I would not lend money to family or friends. Gifts only, if I could afford it. A loan would theoretically allow you to help him with more money than you could otherwise afford to give, but what happens to your relationship if his failure to repay the loan causes financial hardship? An ugly situation.

Unless you have a real concern that his immediate health and safety are at risk, I think giving money should be contingent upon him agreeing to talk with you in detail about his financial plan. Then you can at least try teaching him to fish, as per the proverb. You'll also get a better idea of how much he needs, and where the money will go. If he comes back asking for more money, you guys can refer back to his plan.

Tim

OP's last paragraph speaks volumes. If you owe student loans, mortgages, & car notes yourself...IMO...you are not in a position to loan or gift anything to anybody especially when they have a track record of making horrible financial decisions.

He has a car, so he has shelter. If it's too cold where he's at then he has the means to go south and thrift stores sell blankets for cheap. If he needs cash, tell him to take up juggling and find a busy street corner.

Seriously, now is the time for him to learn how to fend for himself. I think you're absolutely right that any additional money you give him is going to get flushed down the drain and he'll continue to ask for more. At this point I wouldn't even recommend Tim's idea of giving him money contingent on a financial plan, I'd wait until he's hit bottom and started helping himself first.

I know it's easy to be harsh to someone I've never met, but it sounds like you already know that giving him the money won't actually help him and withholding the money is much more likely to help in the long term.

Don't lend him a dime!

It might be different if he had paid you back the $500 emergency loan. But he lied to you and does not deserve any sympathy or accommodation at this point. It kind of sounds like your parents have been smart enough to figure that out. Now it's your turn to wise up and cut this deadbeat off.

I think it is easy to sit up on the hill and command those in the trenches.

Being in the trenches, is a very different thing.

I wouldn't "loan" money to anyone. But, those I would "loan" money to would be considered a gift by me, without setting my hopes on getting paid back. IN essence, If I had a couple hundred dollars I could spare, I would help out a loved one. And, there are family members where I would rather pile my money nice and high and watch it burn before I gave them a dime. But, someone I truly loved, I would help them out.

Unfortunately, your brother is a man-child, so the thing most people will flame me on is being an enabler. But, some people don't learn as quickly as others. Personally, and this is my take on limited details, AND IF I HAD THE MONEY, I would give it to him and make it clear that I have no more to give him. Also, that he needs to get his crap together or he will continue to suck at life. My 2 shillings.

I've never figured out why people take this stance. They won't make a loan to a deadbeat but they will "gift" it to them. Really? You're gonna lose either way & I'd rather have at least a glimmer of hope to be repaid rather than enable them.

No flames from me, just a comment...

I think the brother here HAS learned an important lesson. He has learned that he does not have to be responsible or work for anything because there is no real penalty for NOT doing so. Family support will continue to reinforce that message. He has learned who in the family he can milk.

I've also been in the trenches. The requests never end until you stop giving. Then they somehow find a way. In my case the deadbeats (and yest there were 2) figured out that they had to get a job if they were going to eat and buy beer. And you know what, after several months of not being able to find the right job, they found them very quickly when the handouts ran out.

This guy is not in dire straits because he worked hard and got laid off because of the economy or whatever. This guy is LAZY. He is choosing not to work and needs to understand the consequences of his life choice. Plenty of people choose to be a free spirit, move far from home to make it on their own, or whatever. But those people then accept a lifestyle then can afford consistent with their decisions. This guy wants to do something he clearly can't afford.

Now, one thing that crossed my mind when I read the original post is that I really think there are drugs or something involved here. It's REALLY hard to blow $6500 in a month otherwise if you are traveling across the country. And he ran out after just 2 weeks and wanted the first $500. At $100 a night for hotels he needed $1400 by then. Let's add another $50 a day for food and we get $2100. Miami to Seattl is 3000 miles. Let's say he only gets 10 mpg and pays $4 a gallon. That's another $1200 for a total of $3300. Where in the heck did the other $178 a DAY go after he paid for this luxury vacation? OP, I might be completely off base here but if you have ANY reason to suspect drugs or some other addiction then you better investigate this further.

In any event, regardless of the circumstances, if you decide to give this loser another dime then you better be smart enough to demand a receipt for every penny he spends. And, as much of a hassle it would be for you, don't give him any more than you can document he needs for the next day or two and send him only that. If you are going to fund his life you have every right to know every detail.

If you make a loan you set yourself up for disappointment and animosity when it is not repaid. A gift does not carry the same expectation of repayment. A gift in-kind is even better. In other words, if he needs a place to stay tonight, don't send him $100, call up a Motel 6 and prepay a room for the night for him. That way he can't use the money to but beer and weed and camp out in the woods.

Again, hard to know. I read it as the brother is maturing and trying to get it together. There is a big difference between circling the drain and climbing out of a hole (with mistakes and stumbles expected along the way). My point was, it is hard to know with the limited details we were given. If someone is in a downward spiral, I certainly wouldn't give them anything. If someone is working on improving, I'd certainly help them out and reward their behavior with positive feedback. Of course, it is hard for me to watch those I truly love suffer. Perhaps it could be a mistake to help them out now or not, but based on what I think I know about the OP's situation, I would tend to error on the side of helping his brother to get him back on his feet. Again, assuming I had the cash to be in a position to help.

Personally, I don't mind "gifting" money as long as they don't mind if I take possession of something they value until they "gift" my money back to me. When they don't, then I'll sell their crap on ebay or hock it at the pawn shop.

Well, I agree about the difference between circling the drain and climbing out of a hole. The defining piece of information for me is the $500 need to cover a delay in a transfer. A hole climber would have paid that back immediately after the delay was resolved. A drain-circler would have kept the money and made another excuse. The brother is a drain-circler.

Thanks, everyone! Your insight has been incredibly helpful and given me and my youngest brother a lot to think about. I'll post an update tonight.

.Agree

It's a black hole my friend.