Relationships with in-laws can be tricky — especially when money is involved. The last thing you want is to offend your spouse’s parents, but you’re not sure how to handle a financial issue causing you to feel uncomfortable.
While this issue is awkward for you, it’s important to realize different families take different approaches to money matters, said Jodi RR Smith, president of Mannersmith Etiquette Consulting, based in Marblehead, Massachusetts.
“In some families, money is a commonplace topic with no judgment involved,” she said. “Finances and debt are discussed openly and without issue. In other families, finances are considered confidential and only discussed in hushed tones.”
Regardless, she said you and your spouse must speak with each other first and come to an understanding, so you can put on a united front when discussing the issue with your in-laws.
Smith and Jennifer Porter, a Seattle-based etiquette expert and customer care coach, offered tips to help you navigate four dicey — yet common — financial situations you could face with your partner’s parents.
1. Your in-laws loaned you money and they want it back — but you don’t have it.
If you borrow money from family, Smith said there should always be a clear and written agreement outlining specific repayment terms. She said having these conversations upfront makes subsequent conversations much easier.
“When you and your spouse realize you are not going to be able to repay a loan, the two of you need to initiate the conversation,” she said. “If you have part of the repayment, return that along with a clear payment plan to repay the remaining amount.”
Smith said one thing you should never do is force your in-laws to play debt collector.
“Do not put your in-laws in the position of having to ask for their money,” she said. “The more responsible and mature you are in the process, the easier it will be to have a good relationship going forward.”
If you did create a written agreement, but your in-laws need the money back sooner than expected, Porter said to sit down and come up with a new payment plan that works for everyone.
“Put it in writing and create milestones that are met and include financial penalties to create incentives,” she said. “In a dire situation, a borrower may need to find another financing source to pay the loan immediately.”
Regardless, she said it’s important to be honest and clear about the timing and expectations while expressing gratitude for giving you the loan in the first place.
2. Your in-laws constantly ask you for money and you’re tired of giving it to them.
Saying no to in-laws who keep asking for money can be very difficult, but Porter said you must do it if you are tired of shelling out cash or incapable of doing so. She recommended sitting down for a polite discussion about this with your in-laws, having your partner open the conversation.
“Position your needs as the driver — not your in-laws behavior,” she said. “This focuses the ‘issue’ on you instead of casting hard feelings on your in-laws.”
Smith noted that cultural expectations might also be at the root of this expectation. If so, she said to gain an understanding of this first, then talk to your spouse about how much, if any, money you’re comfortable giving them.
“Once you and your spouse decide what is comfortable to you, then the two of you can speak with your in-laws,” she said. “Remember, when saying no you do not need to provide a reason. A simple, ‘We are so sorry we cannot help,’ will suffice.”
If possible, she recommended finding other ways to help them, such as having them meet with a financial advisor.
3. Your in-laws provide you with some type of financial assistance, so you feel obligated to let them overstep — but you’re tired of it.
“If you feel manipulated by money, you need to find an immediate solution to remove this pressure,” Porter said. “Create your own budget and start following it.”
The sooner you’re able to take care of your own finances, the better.
“Money manipulation creates toxic relationships and is very unhealthy for families and friends as well,” Porter said. “Work hard and quickly to become financially independent and watch as those emotional pressures disappear.”
Your in-laws are nearing retirement age without a lot of money in the bank. Judging by their spending habits, they’re not too concerned about their cashflow running down to empty — which seriously worries you.
4. You’re concerned your in-laws don’t have enough money for retirement and are relying on you to foot the bill when their funds run out.
Smith recommended asking them about their financial plan for retirement in advance.
“Be sure they know you are asking from a place of love and concern,” she said. “If they joke ‘Well, we will just move in with you,’ make it clear that is not a real option.”
She said to talk about what will work and if there are other siblings, bring them into the conversation as well.
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