A recent Bankrate survey reveals that the holiday dinner table is filled with conversational landmines. Money takes the lead, with only 38 percent of U.S. adults comfortable discussing their bank account balances with family and friends. Fewer are comfortable with love lives (47 percent) and credit card debt (52 percent). In contrast, Americans are more amenable to chatting about weight (71 percent), political views (78 percent), religious views (81 percent), and health (81 percent).Have a Question? Reach Out!
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Financial Assistance at Holiday Gatherings
During holiday gatherings, 19 percent have given financial assistance to a friend or family member. Surprisingly, 10 percent say friends and family often ask them awkward money questions. And 9 percent have asked for financial help themselves. It shows that money still comes up in these settings.Also, our holiday travel survey found that 13 percent of holiday travelers plan to ask family or friends to pay for their trips. Among those who have maxed out a credit card since early 2022, nearly a quarter (22 percent) had to borrow from family or friends.
Caution When Helping with Finances
Just like in airplane safety demonstrations, it's important to put your own financial mask on first before helping others. Among those who have lent money to family or friends, 42 percent lost money, 24 percent had a damaged relationship, and 9 percent had their credit score harmed. Treating the money as a gift rather than a loan can be a good idea. Drawing up an informal contract can clarify expectations and outline a payback schedule and interest rate.
Alternative Ways to Help
Instead of giving money, you can offer career advice or referrals. For an adult child, having them live with you while they find their footing can be helpful. It's beneficial to have an end date in mind and have them contribute to household expenses. You could also set aside money and give it back as a security deposit or for moving expenses. Additionally, make sure they consider alternative ways to pay off debt, like opening a balance transfer credit card.
Gently Saying No
Sometimes the best approach is to gently say no. You can explain that you value the relationship too much to mix family and finances, fearing it might damage the relationship. You can also state that offering financial assistance doesn't fit your budget. Some people even turn the request around by saying they were about to ask for a loan too. With nearly two-thirds of Americans feeling behind on their emergency savings, you're not alone in having to decline.
The Bottom Line
Don't be surprised if a family member brings up money during the holiday season. Before lending money, carefully consider your financial situation. If you agree, be prepared to never see the money again. Remember, there are gentle ways to say no or not right now and offer to help in other ways.
