Our tech team has launched updates to The Nest today. As a result of these updates, members of the Nest Community will need to change their password in order to continue participating in the community. In addition, The Nest community member's avatars will be replaced with generic default avatars. If you wish to revert to your original avatar, you will need to re-upload it via The Nest.
If you have questions about this, please email help@theknot.com.
Thank you.
Note: This only affects The Nest's community members and will not affect members on The Bump or The Knot.
Lending money
Currently I am engaged and set to marry my guy in September. We currently rent and are able to save quite a bit of money. We plan to buy a home late next summer (2014). If we don't find anything we like at that timeframe we will likely wait till the following spring (2015).
I am paying for our wedding and am keeping it as tiny as I can. I have a little over 10,000 in my bank accounts and will use probably about 5,000 of that for the wedding. * no debts just typical monthly expenses of rent/groceries/gas
Here is my question- I had originally planned to loan my dad some money. Instead of him borrowing from the bank and paying them 7% he would pay me that. *for the record I have no money issues nor does my father and I know my money would be secure and if I ever needed it at the drop of a hat he can give it back.
Does this make sense to do this for the next year or so? Since there aren't a lot of other less risky vehicles to making money. Thoughts?
Re: Lending money
If your father doesn't have money issues and could pay you back at any moment....why does he need you to lend him money? How much money?
I would never do this, I dont think lending money to friends or family is a good idea. How does your fiance feel about it?
I would not do this. It can screw up relationships. You said your dad is good financially, and that you could get the money back when you need it- at least that is your hope. Obviously he needs to borrow this money. What if you don't get paid back- like ever? Would that mess up your relationship?
If you aren't willing to give the money as a gift- don't give it as a loan. Getting $350 or whatever it would be in interest is not worth the possibility of losing the relationship you have with your father. Let him get a loan at the bank.
He owns a large business and borrows $ for his business as well as farm. Unlike many people he is in very good standing with our bank and can borrow what he needs. That is why I have no issue with this.
My number to lend is about $8,000 (previously it was higher until wedding expense lowered it). I already have the wedding budgeted as well as extra money budgeted for extra random expenses.
My question isn't should I loan it to him...it is: are there other vehicles that would earn me as good of percent?
You probably can't make interest that high with as much confidence as you have in your father. Lately, H and I have been making 10%+ in our mutual funds, but that's no guarantee - you can lose money, too. There is also peer lending, like lendingclub.com or prosper.com, where you lend your money to another user, and they pay you an interest rate based on their credit history. You can make 8-9% lending to people with good-but-not-great credit - but again, there's a chance they may never pay you back (you can lend to many people at once to help avoid this, but it still means there's a chance of losing money).
That said, there is also some financial risk in lending to your father - and quite a bit of emotional risk. The above options may actually be better for that reason, even if you end up getting a lower interest rate.
"You know you're in love when you don't want to fall asleep because reality is finally better than your dreams." - Dr. SeussAgreed with what many others have said (We've been burned before).
We have a policy not to lend money to family. We give money as a gift to certain people in the family whom we are close with and we know will make the most of it, viewing it as an investment in their future, but we don't loan money since not getting paid back leads to toxic relationships, and we never borrow.