Thursday, November 25, 2010

To Pay back or Not to Pay Back?

Happy Thanksgiving!

I hope you all are enjoying your day and have plans to eat lots of yummy food today. I can't believe it, but I am cooking my first thanksgiving meal EVER today. Wish me luck! Are any of you cooking your first one EVER too?

During this last week leading up to Thanksgiving, I have been giving a lot of thought about giving. Giving as it relates to many things but mainly when you are the beneficiary. Fellow working girls, I am talking about being on the receiving end in these tough times with so many unemployed or working paycheck to paycheck. It may be a loan from your parents or other financially well-off family members. The question I would like to pose is: How should we handle this: take it and be grateful OR pay it back?

I will start by letting you all know that I have borrowed money from my family before so this is something that I can relate to. My personal belief is that no matter how big or small the amount you should always pay it back, even if it is from the Bank of Mom and Dad or a wealthy Aunt.

Yes, I know that times are tough, and yes finding a job right now is even tougher. Our families are here to love and support us and have given us the tools to succeed. All too often I think people rely too much on these handouts. They don't understand that there is more to it than just paying back the money. It's about trust and showing those who we have borrowed from that we mean business, are motivated and understand this is their hard earned money, not ours for the taking.

An example of this is when my parents, who were young and in love, wanted to buy their first house. They borrowed a significant amount from my grandparents. At the time, my grandfather reluctantly said soemthing along the lines of "those kids will never pay us back". Well a few years later my parents paid back every penny they borrowed, much to the shock of my grandfather of course. But there was a trust built that if they ever needed to borrow money again my grandparents would be there to help out.

For me personally, I want to show my family that, yes I needed the money, but now I am ready to pay you back and show you I am a responsible hard working person. I know that if I am ever in a situation again where I need money, they will be more than willing to let me borrow it again because they know that I will pay them back. Again it's their money, not mine. It is simply a loan.

All too often I think young people rely on money flowing their way when times get tough. However, family members that continiously give money without ever expecting anything back are just enabling the situation. Sure we all go through hard times, but the more honest we can be with ourselves and pay back what we borrow, the less sticky everything gets.

So my advice is, borrow what you need and come up with a payment plan to pay back what you owe. Once you write that last payback check, walk away and hold your head high knowing that if you ever need to borrow money again, someone will have your back.

What is your take on this situation? To pay back or not to pay back?


K said...

I would agree that a formal loan should be paid back, such as a significant amount of money for a house or car. To say that any favors or gifts of money that were given to help but not asked for should also be paid back is debatable.

Angeline said...

Ditto should DEFINITELY be paid back. There may be times where things are definitely a gift. The giver can change their mind on this. I don't think a gift necessary needs to be paid back, but I think a similar offer of generosity in the future would not be out of place. For example, my parents "gave" me about half of my graduate school tuition, and when I offered to pay them back (beginning immediately with monthly installments), they refused to accept it. I am eternally grateful for their generosity, and they already know that if they ever fall on hard times or when they get old and unable to care for themselves, my home will become their home, and they won't have to worry about anything. So at this point, I'm not pushing the payback issue. Luckily, I've never had to outright "borrow" money from people, but if I did, I would definitely pay it back.

Angeline said...

Oops, should clarify my third sentence--I think the person loaning the money can decide later on they don't want to be paid back, but they shouldn't change their mind and switch a gift into a loan. :)