It might sound really mean to never lend money to your children. If they come to you and need financial help, you might think that you should help them out. It seems to be the right thing to do, for a parent to help their child, but there can be huge problems if you help them financially and it is always wise to think very hard before you do so.
Firstly it does not help the child to learn to manage on their own. If they know that their parents will always be available to lend them money, then they will not try hard to be so independent. Although it is nice as a parent, to think that you will be there for your children, you will not always be able to be there. If they keep borrowing from you, you may run out of funds and then they will have nowhere else to turn and they may have got themselves into a lot of financial trouble and not be able to get out of it. They may also be taking money from you that you need but because you have let them borrow in the past, you find it impossible to refuse them.
Teaching your children financial lessons is really important. They need to learn how to live within their means so that they do not need to rely on borrowing. If you can help them with this then they should not need to come to you for help. It is something that can be taught form a young age but actually there is no time limit as to when you start so the first time that they come asking for money could be the time to start and explain to them why borrowing is not wise and how they need to learn to manage their money.
Another problem with lending money to your children is that it can cause jealousy between them. If you lend to one child and not to the others they may find out and wish that they also had the opportunity to borrow the money. They may then not have such a good relationship with you after that and even if they do not say anything they may be cross inside. They may wish that they had asked as they didn’t know you would be prepared to lend money or maybe they ask later and you have nothing left to lend them. There can often be sibling jealousy and rivalry even in the most loving families and it is important to think about what impact this might have, both on your relationship with all of your children as well as their relationships with each other.
It could also affect your relationship with the person that you lent the money to. They may not be able to pay you back as soon as you had hoped and that may annoy you. Imagine if you needed the money and they did not have it to give to you, then you could struggle and blame them for that. You may disagree on how much they should be paying you back and when and so that could cause problems as well. You may think that it will be fine and that you can have a rough verbal agreement or not bother and that things will easily sort themselves out. But in reality it may be that they do not pay you back, they seem to be buying things but are not giving any money back to you or they deny agreeing to pay back the money. This is when things can get really nasty between you and it is surprising how easy it can happen.
You may be left thinking that giving money as a gift would be simpler as you could evenly distribute it between children and not worry about having any of it back. However, this still means that they may start to rely on you for money. They may expect more, they may think they can come and ask for money when they need it and just get given it and if you do not have it they may make you feel guilty. It will also not help them to think about how to get money by themselves without relying on others to give it to them.