Should You Borrow Money From Your Parents? When to Say No

If your parents want to give or loan you money, should you take it? Here’s what happened when a reader’s rich mom loaned him money.

“My mother is a very wealthy woman, and she offered to support me for the rest of my life, so I could write,” says Rolf on Should You Lend Your Adult Child Money? “I did not accept her offer easily, but as she had never let me down I finally agreed and quit my secure job. I never once asked her to give me money. She paid me for six years and then suddenly changed her mind, saying she did not have enough money and that I was impacting on her lifestyle (even though she gave my brother a million dollars to buy a house, and continues to pay my sister’s children’s private school education). My mother doesn’t want to listen, and although she admits she made a promise, she says that life changes and I should move on. What should I do?”

My friend, I think you need to listen to your mother. I know this is easier said than done – which is why I recommend books like The Life You Were Born to Live: A Guide to Finding Your Life Purpose. It may sound weird, but you need to figure out what your life goals are. Writing? Going back to school? And then you need to move on.

I also think you should pretend your mother is not wealthy. You’re an orphan, striking out on your own for the first time in your life. This is a daring adventure, and you’re the hero!

If You Accept Money or a Financial Loan From Your Rich Parents…

I realize Rolf already made the mistake of getting money from his wealthy mother. These tips will help him rebuild his life AND serve as a warning for other adult children who are taking money from their rich parents.

I hope.

Never assume your parents’ money grows on trees

Rolf learned the hard way that even though your mom offers to support you financially, the gravy train could come screeching to a halt at any moment. Even if your parents put it in writing – which Rolf’s mom did (“I will give you my beloved child money for the rest of your life and ensure all your needs are met”) – you should never assume for one minute that it’s a good idea to accept money from them! Even the richest of rich parents could lose it all.

If you accept money from your wealthy parents, do not rest on your laurels. Always make sure you have a back up plan and are employable in some way.

Accept your dependence on your parents when you take their money

No matter how much they love you, your rich parents will always have the upper hand in your relationship if you take money from them. The hand that controls the purse strings is the hand that rocks the world.

If you’re an adult child who depends on his parents for money, you live in insecurity. You’re like a child again, at the mercy of their financial lives, whims, and decisions.

Rolf’s experience reminds me of a friend who is also a writer. He’s never been published, and he’s worked part-time at a low-paying job for almost 25 years. He’s been working on various novels the whole time, but never sent his manuscripts to publishing houses. He’s not worried about his retirement – he’s now 53 – because his mother is wealthy and he’s certain of his inheritance.

If my friend’s mom doesn’t give him the inheritance he’s so sure of, his retirement years will be financially lean. I think it’s a mistake to assume your parents will support you financially – no matter how rich they are. You’re just weakening yourself.

Be ready to roll with the punches when the money dries up

Rolf is in a tough situation – I feel for him. It would be incredibly difficult to start over at age 50, especially after being out of work for a few years. He was focused on writing, and thought his wealthy mom would support him forever (or until he got published and started to support himself). He didn’t even have to worry about repaying loans to a family member.

But the one of the worse case scenarios happened: his mom stopped giving him money to live off of. As he said, he’s in a financial freefall and he has to start rebuilding his life.

Instead of fighting his mom’s decision not to give him money anymore, I think he needs to accept it. He has to take her advice: get a job, start supporting himself financially, and move past his mother’s promise of giving him money indefinitely (if that’s what she promised). Even if she promised to give her son money until he dies, she has the right to change her mind.

Start improving your financial and money management skills

Here’s more of Rolf’s story:

“I was lucky enough to get a job for a year, but the recession hit and I was terminated. At 50, I can’t get work, as I have spent most of my life in academia. I am in financial free fall and my mother doesn’t care. She refuses to help me in any way, except to scream at me to “get a job.” I don’t know what to do. My life is falling apart. I am estranged from my mother and my siblings. My father feels for me, but he is in financial difficulty (and is divorced from my mother).”

In 10 Tips for Achieving Financial Goals, I describe how to start pulling your money and your life together after a crisis. Rolf may think about suing his mom for reneging on her promise (he’d have to talk to a lawyer to determine if his mom’s “contract” to support her son financially while he writes is binding in a court of law) – but I think it’s far healthier and better to move on.

It’s a difficult spot to be in – Rolf trusted his mom and didn’t think she’d let him down. He feels like she didn’t live up to her promise. She withdrew her offer of financial support, and he’s left holding the bag.

It’s not easy to bounce back after something like this…but I think life is about bouncing back from setbacks, disappointments, and tragedies, and making the best of what is leftover.

What do you think – would you let your rich parents support you and give you money whenever you need it?

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