How should you deal with family finances when there’s more than one sibling?
Finances are one of the biggest causes of family arguments. As soon as you introduce a complicated financial situation to the family unit, things can get very messy.
It’s easy to lose sight of what’s important and let arguments about finances break apart a family but what you need to remember is that family should come first. You need to find a way to separate the two as far as possible. In some cases, that’s not an option.
When you do have to involve your family in money matters, you need to deal with it in the right way so it doesn’t end in a dispute. These are some common situations where dealing with family finances can get tricky, and what to do.
Lending Money To Family
As a general rule, you should avoid lending money to family and friends wherever possible. But realistically, if a loved one is in a tight situation, you’re not just going to turn them away.
The first thing to do is ask them whether they’ve got any other options. Could they borrow from the bank or cut back on spending to save the extra money they need? If the answer is no and you absolutely have to lend them money, consider the problems that it could cause.
If they don’t pay it back on time, you might end up in a sticky financial situation yourself. It can also cause problems with your partner or spouse because they may feel some resentment towards you and the family member for putting them in financial trouble. That’s why you have to set out some clear ground rules from the outset.
Even though they’re a family member you should treat it like you’re the bank and they are just any other customer. Go over their finances with them and work out how much they can afford to pay back every month. Then you can agree on a suitable amount to lend them and a time scale in which they’ll pay it back. Knowing this from the beginning will help to avoid any late repayments.
When it comes to getting your money back, it’s important that you don’t feel awkward about asking for it. Even though they’re family, you’ll need that money back so if they’re late just be straight and ask them for it.
Another important thing to remember is that you can’t let it become a regular thing. If a family member needs to borrow money once due to extreme circumstances, that’s fine as long as you do it right. But if they start calling you up every month and asking to borrow money, that’s an indication that they aren’t handling their money properly.
They won’t learn if they know that you’ll just bail them out every time they do something irresponsible and they’ll become dependent on you. In that situation, you need to employ some tough love and just say no. That doesn’t mean you can’t help them. However, that help should extend to teaching them to manage their money so they don’t need to keep asking family members to borrow money.
Disputes Over A Will
The death of a loved one is always a difficult time but it’s a whole lot worse when there is a dispute in the family about the will. These arguments can get ugly very quickly because there is a lot of strong emotions flying around.
It’s important that you keep things in perspective. Remember that family relationships are more important than who gets what out of the will. A helpful way to do this is consider how your deceased loved one would feel if they could see you now, arguing about money when you should be supporting each other during this difficult time.
If a dispute does arise for some reason, the best thing to do is keep emotions out of it. The first thing you need to do is seek legal advice from somebody like Family Law solicitors, Bannister Preston. They will help you to deal with it through the proper channels and stay impartial.
If you try to solve it yourself without the help of legal professionals, the argument will become emotional and escalate without getting anywhere nearer to a solution. During the process, keep your distance from the rest of the family members and let the lawyers deal with it.
Money Troubles In The Family Business
Running a family business can be great but it can also make things very complicated when things get tough. If the family business runs into money troubles, you’re at risk of a big falling out.
The biggest problem is blame. If you all start blaming one another for the problems with the business, you’ll argue instead of solving the issue.
One of the major reasons that a family business runs into trouble is difference of opinion. Everyone may have different ideas about the direction of the business. The way around this is to meet regularly and be open about your ideas for the company. This is also something you should discuss at length before starting a business together in the first place.
When problems do arise, don’t play the blame game. Sit down together, identify the problems and start working out how you’re going to get back on track. Blaming one another just wastes time and causes more friction. If you’re struggling to come to an agreement, it might be time to think about selling the business.
Another way around it is to distance yourselves from the finer details of the business. You can hire a financial officer to deal with that aspect of the business and you and the family can deal with the broad strokes. That way, the family business finances won’t come between you as much.
Money is always an incredibly emotional subject and it can easily cause rifts in the family. Always keep in mind that those money worries will pass. You shouldn’t let it ruin your relationship with your loved ones. There’s more important things than family finances.