Q: Do you think it's wise to have loans among family members -- for example, brother to brother, adult to child, parent to child, etc.?
Jim: Financial counselor Ron Blue highlights one all-important point to bear in mind in any situation like the one you're envisioning: Whenever money is loaned, the relationship between the parties involved changes. It's no longer simply brother-sister, father-son or friend-friend -- it's borrower-lender. When you loan money to a family member, you've introduced another level of complexity into the relationship.
This would also apply in the case of cosigning on a loan for a family member -- in other words, putting yourself in the position of becoming a surety for that person's debt. This is, in effect, the same thing as lending the money yourself.
If a member of your family is truly in need, you may want to seriously consider the option of simply giving him the money. Giving generously, with no strings attached, is a commendable and positive virtue.
However, if you have reasons for believing that this would be impractical or unwise, then Ron Blue recommends that you take steps to establish a formal borrower-lender relationship with repayment terms and interest rates clearly defined. Both parties should understand and agree to these terms up front. Don't leave anything to uncertainty or chance (as in, "Oh, just pay me back when you can"). Those terms should be documented in writing so the expectations for repayment are plain to all concerned.
Again: However you approach the situation, lending to or borrowing from family members is a potentially dangerous thing to do precisely because of the way it changes relationships; it will almost certainly introduce tension at some point or other. I'm not saying that it's wrong to get into an arrangement like this, but it's something that needs to be approached with caution and discernment.
Q: I'm a stay-at-home mom and my husband works hard to support our family, but we're living on a shoestring budget. How can I give my kids the chance to try different activities and programs when we don't have much money? I don't want them to miss out on life-enriching opportunities.
Greg Smalley, Vice President, Family Ministries: The happiest, most well-adjusted children aren't those who are involved in a million different activities and who own every tech device on the market. Rather, the kids who thrive best are those who have committed, caring parents who spend time with them on a regular basis, and emphasize the importance of character over comfort and consumerism. So if you're feeling guilty because you can't buy your kids everything our culture says they need -- don't.
There are dozens of ways you can provide stimulating activities for your children that don't cost much money. A great place to start is your local library. Books and DVDs can introduce them to people and places they've never dreamed of before. If they're old enough, they can get their personal library cards and select their own materials to check out.
You should also take advantage of public museums, science centers and zoos in your area, most of which offer low-cost or free children's programs. If you live in a rural location, this may involve a special weekend trip once in a while, but it's well worth the time and effort.
Finally, don't overlook the world of music and drama. Many communities and universities offer concerts and theater productions for kids. There are also a number of classical radio stations across the country that produce educational programs aimed primarily at children (many of which stream over the Web).
These are just a few suggestions. I'm sure you can come up with many more ideas on your own, or from other moms.
Jim Daly is a husband and father, an author, and president of Focus on the Family and host of the Focus on the Family radio program. Catch up with him at www.jimdalyblog.com or at www.facebook.com/DalyFocus.
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