Thursday, July 7, 2011


Financial emergencies come up for all of us. You may be forced to ask a relative for financial help because you don’t have adequate reserves to drawn on. Before you consider that route, as either the recipient or the giver, here are some points to consider:

• Even small gifts may come with expectations that might have little to do with the money itself. If you don’t meet the giver’s expectations—showing up for every holiday dinner, for example—the relationship can become strained. Or, if you give money to a family member, you may find yourself scrutinizing the recipient’s future financial behavior.

• Borrowing money from a parent, for instance, may make you feel dependent, even if you pay the money back.

• Lending, rather than giving, a family member money might be a better idea. But, to avoid problems, always formulate a loan contract with specific repayment and interest terms.

Gift or loan, thoroughly talk about the transaction beforehand to make sure everyone is in agreement. In addition, make arrangements with your financial advisor to start building an adequate emergency fund of your own, so you’ll be prepared to handle a financial emergency yourself.