While paying off student loans, it can be hard to devote financial resources to anything other than repaying student debt. Indeed, many student loan borrowers dedicate a large percentage of their incomes each month to student debt, and this leaves little money left to devote to any other purpose. However, you might need you to consider helping family while paying off student loans if a life emergency arises.
During my student debt repayment saga, there were times when members of my family needed financial help. Each time, I lent relatives money even though I was drowning in student debt. However, one instance put me in a difficult financial situation.
About a year into my student debt repayment saga, my grandparents were having financial difficulties, and they reached out to my brothers and myself for help. After my mother got sick and passed away while I was a teenager, my grandparents really stepped in and supported me. My father also passed away more recently, and my grandmother is my only remaining direct relative from an older generation.
Even though my grandparents had financial issues for most of my life, they still helped my brothers and myself whenever they could. During college, I really needed a new laptop, but I couldn’t afford to buy one myself. Although they did not have too much money, my grandparents gave me the funds to purchase a new computer, even though I’m not entirely sure they knew what a laptop was!
Another time, I needed to pay a seat deposit to a law school that accepted me, but I did not have the financial resources to shell out this kind of money, Again, my grandparents gave me the funds to pay half of the deposit, and I was able to pay the other half on my own. My grandparents also let me crash with them during vacations from college and law school. They never charged me a dime for rent or food, even though they struggled financially to help me out.
When it came time to help my grandparents while paying off student loans, I did not hesitate to give my grandparents the few thousand dollars they needed to pay rent and set themselves up financially. They had done so much for me, and this amount of money was small in comparison to the help I had received from them. As it turns out, they were able to pay me back all of the money I lent them about five months later, so I only had to float them the funds for a relatively short amount of time. They even gave me a little money for interest out of nowhere, which they claimed was for good luck.
There were other times during my student debt repayment saga when I lent smaller amounts of money to my grandparents and other family members. The four other times I lent money to family, I helped my relatives pay for moving costs, pay rent, and deal with cash-flow issues. The funds were always paid back, although one time it took around a year and half for me to be paid back in full.
There are certain things you should keep in mind when helping family while paying off student loans. The most important consideration is that you should not risk your own financial security to help out family members. As previously mentioned on this website, everyone should have around six months of living expenses stashed away for life emergencies, and try not to raid this fund when helping family while paying off student loans. If something happens to you, there might not be anyone around to assist, so it is important to have some money stashed away.
Also, it is important to be completely clear about the terms of any financial help. Specify right at the beginning if the assistance is a gift or a loan and what the other terms of the financial assistance will be. Furthermore, it is worth noting that it is extremely tacky to charge interest to family on money you lend to relatives for financial emergencies. One of my family members suggested doing this when we were helping out a relative, and I was so disgusted that I loaned all of the money myself. Maintaining good relationships with family is worth not charging interest on money you lend to them.
Furthermore, when helping family while paying off student loans, it is best to not assist relatives alone. Since student debt might limit the amount of money you have available, it is best if you share the financial burden of assisting relatives with other members of your family. I am fortunate to have four brothers (one of whom has written a number of guest articles for this website), and each time a family member was in need, we all pitched in to help. Combining all of our financial resources ensured that none of us had to devote too much money to assisting family members, and this eased the burden all of us faced by helping our relatives.
As previously mentioned on this website, I saved money in some pretty insane ways while repaying student debt. However, I made helping family while paying off student loans a top priority, since these relatives had helped me when I needed it. In the end, as long as you keep certain considerations in mind, and don’t put yourself in a bad financial situation, your student loans should not prevent you from providing financial assistance to relatives.