“Heck no!”
Imagine if a stranger asked you one of the following questions:
- Can I borrow your credit card to make a quick purchase? I don't have any cash on me.
- Mind if I take your car for a quick trip to the grocery store. I don't feel like waiting for the bus.
- Do you mind co-signing with me on the new house I want to buy? My credit isn't the greatest.
My hope is that if a stranger asked you any of these, your response would be an emphatic, “Heck no!”
Flip the Script
Okay, now let's change the situation a bit. Instead of a stranger asking you the questions above, what if it was someone you knew? And not just anyone, someone close. Very close. What would you say then?
It might be easier to turn down a friend, but what if was a relative? What if it was a parent? Then what would you say? Could you say “Heck no!”? Could you at least muster a simple “no”?
Saying “no” to a parent can be much more difficult. It can feel impossible. I know it did for me.
It's Just a Signature
When I started my career, my future was bright. Good job, good credit; things were progressing as planned. My mom's financial situation at the time, however, was a bit different.
My mom had good amount of cash from selling at the height of the Los Angeles real estate market in 2004 and used those proceeds to pay cash for her new home in the significantly cheaper Las Vegas market. Timing wise, she couldn't have chose a better time.
She could have sit back and enjoyed her retirement years with the excess cash. Instead she wanted in on the real estate boom that was taking over Las Vegas.
Unfortunately, there was one small hitch preventing her from doing so: bad credit. A bankruptcy filing years back had ruined my mom's credit, and that made getting approved for any loans impossible.
She needed someone to help her out.
She needed someone with good credit to co-sign with her.
She needed her son.
“Do you mind co-signing with me on the new house I want to buy? My credit isn't the greatest.”
What would you say if it was your mom asking you this question? Could you say no? Here's how it all played out:
Author: Jeff Rose
Jeff Rose CFP blogs at GoodFinancialcents.com. Jeff is well known among bloggers for his various causes: The Debt Movement, The Roth IRA Movement and The Life Insurance Movement. His also wrote a book, Soldier of Finance.
Very good advice – and pertinent to me at this point in time. Being able to say no is important, and I hope the author’s mom did come around and understand. My own parents (mid 60’s) tend to be more manipulative – bombarding me with their fears and paranoia, and once I’m overloaded then pressuring me to do something. I’m getting better at pushing back on them – instead of saying no outright and getting their emotional manipulation, I push them hard for details of their plan, and how they are planning on handling contingencies. Logic seems to push back… Read more »
What a sad situation. That must be very difficult for you.
@Jim
That is a tough position to be in. What I didn’t mention in this post was that I had a similar experience with my father where I also had to say “no”. That was equally as tough.
Both parents did come around and my mom knows better to use such tactics (my father is now deceased). Our relationship is much better now.
It’s different when you want to help vs. being guilted into thinking you have to.
I’m a firm believer in that you can’t help people that can’t help themselves no matter how close they are.
Great post Jeff!It can be so hard to say ‘no’, but it really is better not to lend money when you can’t afford it.
What helped me was reminding myself that once my finances were under control, I could be of assistance to my loved ones.
We have helped family, but it’s gifts instead of loans and it’s always an amount we’re comfortable with.
I’m with you on giving gifts (in amounts you’re comfortable with), rather than loans. Years ago I had to practice saying “I have a policy of not loaning money (co-signing loans, etc…), but I can give you a $200 gift. Family members / friends who cross that boundary and ask for loans are likely always going to be in some financial fix. You need to put on your own proverbial oxygen mask before trying to save them.
Wow, that’s a toughie. I don’t think my mom or dad would ask me for those things, but if they did I would hope I could explain my “no” with compassion. Good question!
It is a tough one, huh?
It was super tough for me!
Being able to say no is important but it’s also important to be there for your family. After all…they’re family. Sure, there are situations where it’s not a good idea (like the crazy uncle that keeps spending his money on drugs) but family is supposed to rally for each other for support.
That is a admirable theory. The trouble is the same people are always the ones with their hands out, and the same people are always the givers. That is not a mutual rallying for support.
I agree with Anne. I guess it depends on the family you come from. You want to help someone out when they hit rock bottom, help them get back on their feet. But it becomes a viscous cycle when that person hits “rock bottom” again and again, and refuses to do anything to help themselves. I’ve cosigned on a loan, only to find out once it was in default that the person never had any intention of making payments on it. Gotten the person multiple jobs, only to have them quit because they didn’t want to work. Given the person… Read more »
I agree Matt, I see a huge difference between cosigning on a home loan for someone (No!) and letting them borrow my car or use my credit card. If my mom was strapped for cash or had to take the bus.. of course she can borrow my car or use my credit card. Why on earth would I say no, unless she had some sort of drug addiction or history of lying? Everything I am today is because of the resources and teaching that she and my dad provided me with growing up. Part of the reason I want to… Read more »
This is a tricky one. Of course I would say yes to the first two questions for a relative, or a good friend. It’s hard for me to contemplate my parents asking for money or to co-sign because I can’t imagine that they would. For me, having a stellar credit score is important for my future business endeavors, so I would just use that as means of an explanation. I’d also probably point out that by having a mortgage liability on the record, it would affect my own chances at getting a mortgage. Also, dont bankruptcies fall off after a… Read more »
Luckily for me, my parents won’t be asking for money any time soon. Honestly, I’ve been the one asking them over the last couple years! (Just to borrow, or for co-signing a loan) I’m still pretty young so it’s been nice that they’ve been able to help me start getting good credit. But I had to show them that I was responsible with my money first!
Solid advice Jeff. I know it can be so difficult to say no to family, especially to parents. We’ve had similar situations in our family, albeit on a smaller scale, and it’s always uncomfortable. Looking back I am so glad that we’ve made the decisions we have because potentially throwing in money to a close relationship can make things go south awfully quickly.
I help my parents but usually to help them on splurges. They manage their household pretty efficiently, and they have never asked me for money. Even when my dad was unemployed for a really long time.
This is the kind of situation where you would want to help; simply because your dad never asked.
I’ve heard of situations of unemployed parents mooching off their kids as they literally do nothing.
After we had given a sister tens of thousands of dollars over the years before we retired, we decided it was time to start saying no. We realized that any help that continued would put more of a squeeze on us because our income was 30% lower than it was before. At the same time, the relative received a windfall from a legal settlement and should have been able to live on that money for at least two years. So we explained the situation and told them we were happy for her about the settlement and the good timing of… Read more »
Oh my gosh, Deb. How horrible!
I’m sorry that it ended up that way.
And the nerve to call back seeking another handout!
Boy, your description sounds like a friend of mine who is very co-dependent on her mother’s money.
Since I had my mom cosign on stuff for me when I was younger, and I compeltely screwed her over, I think if she came to me needing a co-signer, I couldn’t say no. And if she screwed me over, I probably deserve it!! Although, before I co-signed, I might like to have a look at her finances and see if I could help her out some other way first.
It is exactly that kind of thinking that lands so many people in trouble. “I did a bad thing to you so you can do a bad thing to me.” Or, “I ate too much ice cream today, so I will help you not to feel bad about spending too much money.” Can you say, codependency?? Instead, we should each be looking to do our best and to be a blessing to others through our time, money and talents. THEN, if they or we fall on hard times, hopefully through no one’s fault, there is an ability by one to… Read more »
If you “screwed her over” it is not to late
to make things right. I am sure it would ease the pain she feels to this day.
Actually, my Mom did ask me. When I was in my 20’s, she asked me to cosign on a student loan for my younger sister. And I didn’t say no. The results ended up being terrible for everyone involved. Hindsight is 20/20, but I think the fallout of my saying no would have been less than the fallout of my saying yes. It’s taken my Mom and I a decade to recover financially. Everyone’s relationship with my sister has been hurt. I still struggle with saying no, but I’m getting better. Years of saying yes have taught me that I’m… Read more »
Yes. I had to.
My mother bankrupted herself, morally and financially, to support (translation: enable) my youngest brother – the addict, alcoholic, felon. Better to buy heroin and beer than pay the mortgage.
I had always given her money every month, thinking it was going to pay bills. Then, when my sister found the foreclosure notice in the garbage, I woke up.
I ended up helping her pay the mortgage, utilities, etc. directly. Never put a dime in her hands again.
My mother’s situation is 1000% times better than mine would ever be so I can’t imagine her asking for any kind of financial assistance. Since she never assisted me via co-signing, loans, etc (not that I’ve ever asked her), I can’t see her asking me for the same. Its my father I have to be cautious of but I know to look at the situation objectively and not give into it. The balance of power between the two of us educationally, financially, healthwise and even my upbringing with him is not where it would be fair of him to ask… Read more »
I have been in this situation and have been able to say no. Not t because I don’t care, because if the person is not in the right space, financially, taking responsibility, it will just end badly. I give small gifts of money when I can, and other than a spot on the couch if it all goes to hell, that’s all I’m going to do. Yes, there is an enabling\enabler relationship going on here as well.
Gee, I sure would have liked to see how it all turned out. Too bad it went to video without captions.
Me too. I can’t watch the video at this time. A transcription or synopsis would be appreciated.
Video should be working fine now.
I hope that embedding videos does not become a trend for this site/blog. Even if a transcript were provided, the content of the video could have been summed up in a few sentences of well-written text. I guess some people might be more audio-visual learners, but I sure appreciate reading the outcome of the story in 3 sentences rather than listening for 3 minutes or reading the verbal banter being transcripted. Kudos on the topic, it’s an important one, but please don’t let this become a trend. In the least, make a poll about it to see what the majority… Read more »
Some of us don’t hear well enough to use a video. Is it captioned? If not, then you are actually in violation of the Americans with Disabilities Act. Also, some of us don’t want to spend the time and just want to read quickly.
And no, the “captioning” in the UTube isn’t acceptable. Turn it on and see.
Just because there is a fun and fancy new technology it doesn’t mean it is necessarily appropriate to use it everywhere. If you must play with video, at least provide a transcript.
“If not, then you are actually in violation of the Americans with Disabilities Act.”
Hahaha… seriously? That’s not true at all.
You better get on it reporting 99% of the videos on the internet then.
I do not share my financial situation with anyone, including my mom. It’s a lot easier when nobody asks. Although my financial situation has improved, the habit of frugality means that I still carry on my life as I did when I was digging myself out of debt. If my mom was responsible with her money, it would be different, but she’s not. I’m prepared for the possibility that she might have to come live with me, but that’s tomorrow’s concern 🙂
Someone in our family bled his mother dry. It was not pretty. She resents it and holds out hope that some day he will pay her back. She sees them spending money and never receives back any of the ten of thousands of dollars she gave him. I don’t have the heart to tell her that he will never pay her back. Anne is right. There are usually takers and givers in families. Rarely do people step out of these roles. It makes me mad just thinking about the situation in our family, even though I wasn’t the one who… Read more »
She should take him to court!
I often like to catch up on GRS while at my desk eating lunch. It would be nice to have the main points in text without relying solely on a video for the main point.
This is one of the toughest things for me to do. I love taking advantage of opportunity but often the opportunity turns out to be a distraction or detour from the financial path I need/should be taking.
Great advice Jeff. Thanks for sharing your personal experience. Good to hear even successful people have struggled with saying NO as well.
The Warrior
NetWorthWarrior.com
I’d really like to know the rest of the story — what happened to his relationship with his mother as a result?
Please share!
Initially it was strained. We didn’t talk for a few months and being stubborn I refused to call her. When she finally did call it was like nothing happened (regarding you she acted when I turned her down). After the houses went to short sale, it has never really been discussed on “what could have been” had I co-signed. I casually brought it up once, but it was a very short conversation. She now knows she made a mistake and let greed takeover. She’s complimented many times on my approach to my business and finances, so in a roundabout way,… Read more »
I think “No” is the only answer weather its family or not. If the person has made mistakes in the past to put themselves in this situation who to say them won’t repeat the behavior again.
My mother was an idiot about money and she was a moocher on a grand scale. Her answer to any kind of money shortage (and she was perpetually short of money) was to “borrow” it from someone. I lent her money once, to buy a car, and she gave me her old car as collateral. It wasn’t worth much but I did get to drive it for a few years before the repairs would have cost more than it was worth. Which is longer than my mom kept the new car, which was the first of three she had repossessed.… Read more »
I can’t watch videos at work. A text transcript would have been appreciated.
Agreed.
Agree. I actually haven’t been able to watch the video. I read the comments, and got an idea of what it was about. But would like to know the actual story!
Jeff Rose;
How did your mom buy that investment property in Las Vegas?
I say no to my mom all the time! “No, Mom, I don’t want you to buy my lunch. How about if I get yours?” “No, Mom, I don’t need for you to pay me gas money for me to take you shopping. I’ll be glad to do it!” “No, Mom, I don’t want you to pay for X, I’ll save up for it myself.” She still wants to take care of her baby. I find myself doing the same thing with my daughter, and she tells me the same thing. “Thanks, Mom, but I got paid this week. How… Read more »
Wow. Many of you have some tough stories to share. My family certainly isn’t perfect but my Dad is a great example of a person who can say NO and not be manipulated for it. I’ll need to lean on that observation in the years to come when inevitably his estate is dispersed among my siblings. When I see him next I’ll give him an extra long hug in appreciation.
Don’t know if I’m looking at this right, but I tend to see a lot more adult children asking for financial support from their parents (or the government) than I see parents asking for help from their children.
For me the more pressing question at the national level is– can you say “no” to your children? This ties to JD’s post from the other day, actually.
(But I’ll have to agree, having irresponsible parents would be a real nightmare. Fortunately mine are financially independent.)
I have, and have seen, a number of families that have the “weak” sibling, who the parents seem to need to help more than the others. Much like the Economic Outpatient Care as mentioned in The Millionaire Next Door, soon it’s impossible to tell who is at fault, the parent(s) for refusing to allow the sibling to fail, or the sibling for refusing to cut themselves loose and become truly independent. I have made my sibling the case example to my children of what I will not tolerate. My children have seen how my mother was financially bled. Yet even… Read more »
I too come from a family with “one of those” members and it has caused a lot of resentment. I had to buy my first car at 18 while my sister has been driving around one of my parents cars for a decade now, never has to pay for more than gasoline, and has been running it into the ground and got into multiple accidents with it. She’s been without a job for months and I’ve never seen her get nagged about it while I was daily from the very day I graduated college, sometimes when right in the middle… Read more »
I think it depends on your individual family members. I would be glad to lend to my sister and two of my brothers. We have gone into real estate investing with one of them. We would never lend money to my oldest brother but we did buy a house with him so he would have a place to live. We help pay the taxes and insurance, and some of the repairs while he has shouldered some of the repairs. My father would never lend any of us kids his cars but we have lent our car to him and to… Read more »
well, my mom would never ever ask me something like that, and neither my dad, so I guess that´s off the table. I have however been asked by my brother to lend him money, but heeeeell no! I have no obligations to him non whatsoever!
My SIL and her DH have been milking my inlaws for years. SIL got a degree from a private college, very expensive, paid for by the parents. She was placed into a job, got fired a year later due to poor performance. My inlaws moved her 3,000 miles, bought her a new vehicle, paid her rent deposits, bought her furniture when she was placed into a new job. She was fired from that job after 6 months, again due to poor performance. She then buys a house (HOW???). Drops insurance on her vehicle then gets into an accident that totals… Read more »
Is your dh on the same page? This is where we are–in laws helped out my BIL and the in-laws are now in over their heads and needing our help. It’s not easy for sons to say no to their moms.
Good for you to let them know your stance now. We got sucked in because the In-laws kept bailing out my husband’s little sister and let her have and do anything she wanted. When they retired and said they could no longer live on their income, they started getting handouts from us. We were careful not to give more than we could afford, but MIL was a heck of a manipulator. The money was going straight to their “baby”, and when we found out we started scaling back, furious that we had been misled. A couple of years before they… Read more »
Videos also don’t load on my mobile browser. Please don’t tell me to download an app-my phone is already plenty cluttered and I would like to be able to view all content from my phone. Thanks!
You can’t access Youtube on your phone?
A guy at work was getting money taken out of his work check by court order because he had co-signed for his brother and now the brother had taken off overseas.
Are you related to Neil Rose?
I am not. Great last name, though. 🙂
Another Rose here too. 😉
Phew – what a tough situation which you handled wisely. I’m not sure I would have the courage to say no in a similar situation. Stellar advice. Your mama raised a smart son.
A very wise decision. You said no to a want, not a need.
You can always remind your mother she did a fine job raising an individual with the intellect to know the difference. 🙂
This is tricky. If I had money to spare, I would be more comfortable lending then co-signing. I hate the idea of co-signing bc it usually means you are backing a previously financially irresponsible person. (Usually.) Parents are hard. I have one that has more money than he knows what to do with, and one who told me in five years she will not be able to support herself. I will have to be the bank. It is for survival, not speculation, but still it is a position I never, ever want to put my kids in.
We have given my husband’s older sister tens of thousands of dollars over the years, including one time three years ago where we gave her $22k – she was sure she would be ok going forward from there. However, she asked us to bail her out again in the Spring – this time to the tune of about 5k. We told her then that this was it – we were going to be paying for college in a couple of years and just couldn’t help her anymore. I don’t know if she’ll ask us to help her again and I’m… Read more »
That’s a tough situation. It sounds like they need professional help. You offering money to help pay for stuff is not really helping the situation; it’s just prolonging the obvious.
I, personally, prefer no to lend money to anyone, even my son, or do business with any of my or my husband’s family. When there is money involved, this is when all the arguments and misunderstandings start.
a useful topic! however in my family people come to me for things that are necessities, not investments. I know my mom fully expects to move into my spare bedroom when she blows through her retirement. Saying no to extra investments is one thing. Telling your mom she’s homeless is another!
I was listening to August 16th’s Marketplace Money podcast and it was very relevant to this issue. Anybody struggling with it should listen to this: http://www.marketplace.org/topics/your-money/how-successfully-ask-family-members-loan [Disclaimer: I do not work for American Public Media or NPR, but I recommend their podcasts to all readers of this site.] Particularly, in this segment, Diane Lim provides a good model, in my opinion, for borrowing from loved ones. Offer to pay back with interest higher than the lender could get from a Savings Account in their bank, but less than it would cost you to likewise borrow from your bank. Sharing the… Read more »
I guess I also wonder if anyone on this thread is 1st generation americans? I know a friend of mine (a financial planner no less) whose immigrant parents told them they didn’t need 401Ks because they had him to pay for their retirement. I think depending on which family you grow up in it’s not manipulation, but the expected tradition. I think the hard part is knowing where it is manipulation and where it isn’t. I agree that you should set terms, but people don’t like being told what to do with their money even when it’s yours. I dunno–I’m… Read more »
I have a similar story. I moved out of the house when I was 22, after racking up a ton of student loans to get through trade school. My mom supported me by paying my auto insurance and letting me stay at home rent free while I was in school. She always has (and probably always will) work 60+ hours a week as a nurse. So there’s no sense of her being lazy or reckless. Anyway, I met someone and we moved in together while I worked and finished school for a couple more years. About three years ago, I… Read more »
She kept on asking me for money after that and I always told her no, I didn’t have any to spare. The inevitable response to that was “Can’t you just put it on a credit card?”
I guess I also wonder if anyone on this thread is 1st generation americans
Wonderful insights in the post and in the comments. I value my hard won financial independence and those of my younger children. My eldest is almost fifty. He is handicapped and gets a social welfare grant but I value my ability to care for him beyond what the grant provides for.