At 35, Kelly is just starting to feel like she’s in control of her finances. Her family didn’t have a lot of money when she was growing up, so she had to pay for school herself through scholarships and student loans.
She’s been working since she graduated, and after paying off her student debt, she’s been able to save $100,000 spread across an emergency fund ($15,000), 401(k) ($30,000) and brokerage account ($55,000).
Her parents, however, continue to struggle financially. They have little retirement savings and struggle with high-interest credit card debt.
Kelly’s parents recently asked her if they could borrow $10,000 to replace their damaged roof. They say they can’t wait any longer to redo the roof without the house sustaining damage.
Kelly doesn’t know what to do. She wants to help her parents out, and she has enough money to do it, but she’s worried that they won’t be able to pay her back. After all, they borrowed $5,000 from her brother six years ago and still haven’t repaid him. In that time, they took a beach resort vacation, instead of prioritizing paying her brother back.
When lending money to family members or friends, a common piece of advice is that you should only do it if you’re comfortable with never being paid back. Some experts advise that if you lend money to family, you not only go into it with the mindset that it won’t be repaid, but, importantly, you choose an amount of money that you are OK to part with.
A 2025 survey commissioned by JG Wentworth [1] found that half (50.3%) of people who borrowed money from friends or family and have yet to pay it back admitted concern about their ability to repay the loan in full. In addition, 46.6% of respondents said “serious arguments or conflicts” had resulted from loaning money to friends or family.
Read more: Rich, young Americans are ditching stocks — here are the alternative assets they’re banking on instead
This might be top of mind for Kelly, since she already has evidence that her parents don’t prioritize paying back loans to family members. The fact that they aren’t adept at saving and budgeting, and will spend on non-necessities like vacations over loan repayment or emergency savings, should also alarm her. Plus, if Kelly ends up loaning a large portion of her emergency fund, it leaves her vulnerable in case of an unexpected expense.
The problem with a situation like this is that Kelly’s family is in a dire circumstance, and they need help that they may not be able to get elsewhere. This makes it extremely difficult to say no. If you’re the first in your family to have financial stability, you might find yourself in a situation where you feel pressure to financially support your family.
Kelly should, first and foremost, decide whether she’s comfortable lending money to her parents, knowing that she might not get it back.
If she decides to help them, she should choose an amount that works with her budget. While $10,000 will not completely derail her finances, it will set her back. If she chooses to lend the money, Kelly should sit down and discuss the loan with her parents and write out an agreement that includes a timeline for repayment, and potentially any interest to be paid on the loan.
If Kelly decides not to loan the money to her parents, she could instead suggest other ways she can help. For instance, she could offer to help them look into a bank loan, or to help them build a budget that works for them so they can work on saving for repairs and emergencies.
Saying no to her parents will be difficult, especially if Kelly receives any backlash for her decision, but it is important for Kelly to make sure she is financially stable, first and foremost. Telling her parents that it would put her in a difficult financial situation if she lent them the money might be enough of an explanation for her parents, who know what it’s like to face financial hardship themselves.
Stay in the know. Join 200,000+ readers and get the best of Moneywise sent straight to your inbox every week for free. Subscribe now.
At Moneywise, we consider it our responsibility to produce accurate and trustworthy content people can rely on to inform their financial decisions. We rely on vetted sources such as government data, financial records and expert interviews and highlight credible third-party reporting when appropriate.
We are committed to transparency and accountability, correcting errors openly and adhering to the best practices of the journalism industry. For more details, see our editorial ethics and guidelines.
[1]. JG Wentworth. “Shadow Debt: How much do people borrow from friends and family?”
This article provides information only and should not be construed as advice. It is provided without warranty of any kind.
