Borrowing Money? Here’s The Generation That Most Expects To Be Paid Back

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When you loan out money, do you always expect people to pay you back? You may be surprised to hear that expectation can change depending on the generation you belong to.

A recent GOBankingRates survey discovered some interesting trends in our readers’ response to the question: when you loan a family member money, do you expect them to actually pay it back?

Age Breakdown

As demonstrated in the graphic above, the youngest generation, the Zoomers (18-25), have the highest percentage of “yes” answers at 72%, while Gen X (42-57) has the lowest with 57%. Millennials (26-41) and Boomers (58-76) sit at 63% and 62% respectively. You can see that almost three quarters of Gen Z expect a return on the money they loan out, which makes sense considering their age. 

The youngest Zoomers are ten years old. Those of money-making age probably aren’t making much as they enter the workforce for the first time. With dollars stretching less and less far as inflation continues, it’s only getting harder to part with them. Because Gen Z doesn’t have a lot of money to begin with, you can see why they’d hope every cent borrowed gets returned. And the majority of the other generations seem to lean that way too.

So how can you give someone a loan and ensure that you get your money back? Here’s what the experts say.

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Expert Tips

Jason Porter, a senior investment manager at Scottish Heritage SG, says to “make a policy for lending money…, and then stick by it.” Porter advises readers to put all agreements in writing. “I recommend an informal contract between both parties, including details such as the loan amount and repayment period.,” he said. “This might shield both parties in various situations and stop a ‘he said, she said’ argument.”

On the other hand, financial expert and host of her own show, Rachel Cruze says, “No! Lending money to a family member is a bad idea. If you loan money to a family member, you’ve become their creditor, and they are now in debt to you… Every time you see that person from now, until they pay that money back, it will be an awkward experience. Thanksgiving dinner tastes different when a family member owes you money.” Cruze says to instead only loan money when you’re in the financial position to do so with the understanding that it might not be paid back.

Many experts, including Porter, advise getting comfortable with saying no. He says to “have a prepared response to requests to prevent unpleasant situations. For example, you can reply, ‘I’m sorry you’re having a hard time, but I’m not able to assist.'” He finishes by saying that regardless of what you decide to do, “the most important thing is to respond with kindness, empathy, and clarity.”

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