Big financial crisis in my house. My youngest girl got a Summer job to save money for a car. She has been a great saver, but doesn't have quite the amount that she wants to spend. So she would like to borrow a few hundred dollars to get the used car that shes been shopping for. So, do we lend to her, or should she have to deal with the budget that she already has. Hubby is on the No side, we didnt lend to any of the other kids, I am leaning towards Yes, I would rather that she had the best car possible. And to be truthfull, we didn't have the money to lend to the other kids, even if they had asked for it. So I don't know which way we will go. Decisions, Decisions!
Loan to the kid? Or not?
August 21st, 2009 at 01:39 am
August 21st, 2009 at 01:49 am 1250819349
Does she have a job to repay the funds? Would you charge her interest (nominal)? Is she responsible?
I'd learn toward yes if it is for reliable transportation.
August 21st, 2009 at 01:51 am 1250819488
I say lend it, with the condition that she pay it back at x%, for $XXX/mo, for x months! Taking a loan out is a good experience...even if it is with your parents!
August 21st, 2009 at 06:04 am 1250834688
If it were me, I would lend DD the money, especially since she is only a few hundred short and has shown diligence in working and saving the majority of what she needs. Personally, I would not charge interest, though... I just don't feel comfortable making money off of someone who has so little and I'd be happy just getting the money back. But you have to do what feels right for you.
August 21st, 2009 at 11:48 am 1250855292
August 21st, 2009 at 11:51 am 1250855476
It also would benefit me - I would not worry (as much) and loose sleep over her driving something "maybe not as safe", that she would have to buy, by using only what she saved. I am a big worry wort.
August 21st, 2009 at 10:30 pm 1250893835
If she is going to have a job, why not jump start her credit history by cosigning for a car loan in the difference between what she budgeted and what a reliable car costs?
I once cosigned for a car loan that was only $800 so I know some banks will do small car loans since usually the car is worth much more than a few hundred bucks. I believe the monthly payment was $50. Which I am sure if she only worked weekends during school she could afford to pay.
August 24th, 2009 at 04:57 pm 1251133061
LEt's face it - it was just as much for them as for me. I mostly drove to work, to pay for the car. It saved my parents a LOT of driving me around.
I am pretty anti-debt, and my parents never handed me much financially. But I always appreciated the help. Let's face it, most teens don't have the money for a car and the ability to work often depends on a car.
I don't think charging interest is a half bad idea either. I would have been just as grateful for an interest-loan.
I would make clear that this was a special exception when it came to debt and borrowing.
August 24th, 2009 at 05:01 pm 1251133310
I am getting the feeling that is your husband's angle and I am afraid I would probably side with him. You didn't mention price range of car, so I Assume much.
August 27th, 2009 at 04:39 am 1251347998
August 29th, 2009 at 09:11 pm 1251580286