December is often a time when families come together, celebrate, and share what they have. However, behind the festive gatherings and Christmas celebrations, some households are dealing with financial difficulties and may turn to relatives or friends for assistance. Whether it is money for groceries, transport, school expenses or an unexpected emergency, requests for financial help can become more frequent during the festive season.
For those receiving a salary or an early December payday, it can be difficult to turn down someone who needs help, particularly when they are close family members. However, lending money without considering your own financial commitments could leave you struggling financially when January arrives.
People who regularly support family members and friends need to decide how much they can afford to lend or give without putting themselves at financial risk. It is advisable to be clear about whether the money is a loan or a gift to avoid misunderstandings later.
One of the biggest mistakes people make when lending money to relatives is focusing on the other person’s immediate needs without looking at their own budgets. December expenses can already include groceries, Christmas presents, travel costs, rent, insurance and debit orders. January then brings additional responsibilities such as school uniforms, stationery, transport and other household expenses.
Standard Bank advises consumers to consider whether they can afford to lend money and, more importantly, whether they could manage financially if the money is never repaid. The bank also recommends establishing clear repayment expectations before handing over any money.
A practical starting point is to review your budget before agreeing to help someone. Calculate how much money is needed for your essential expenses and savings, and only consider lending what remains. Avoid using money set aside for rent, school fees, groceries or debt repayments. If you cannot afford to lend the amount requested, it is better to be honest than to create financial difficulties for yourself.
It is also important to establish whether the money is a loan or a gift. If you expect to receive it back, agree on a repayment date and amount beforehand. For larger amounts, consider putting the arrangement in writing so both parties understand their responsibilities. Smart About Money, a South African financial education platform, also recommends keeping a written agreement and maintaining records of repayments to reduce the risk of disputes.
Another important boundary is avoiding borrowing money or using your credit card to help someone else. FNB has previously warned consumers against taking on personal loans or credit card debt to assist family members, as the person whose name is on the credit agreement remains responsible for the repayments, regardless of whether the relative pays them back.
Saying no can be uncomfortable, especially when family members are involved. However, refusing a loan does not mean you do not care. If you cannot offer financial assistance, consider helping in another way, such as contributing groceries, assisting with budgeting or helping the person identify other ways to manage their expenses.
Nedbank also highlights how unpaid family loans can damage trust and create tension between relatives, particularly when repayment expectations are not met.
Ultimately, helping loved ones is part of what makes the festive season meaningful, but generosity should not leave you financially vulnerable. Before transferring money, take a moment to consider what you can genuinely afford.
Remember, you can support your family without sacrificing your own financial security. Sometimes, the most responsible financial decision is knowing when to say no.
