Nearest and dearest: Tips on the give and take of money talk

Many of us find talking about money to family and friends difficult. But given that many of us end up lending to – or borrowing from – loved ones at some point or other means it makes sense that we’re able to have conversations about cash, so that everyone knows where they stand.
Having the facts at your fingertips and clear objectives should help the conversation to go more smoothly. Photograph: PAHaving the facts at your fingertips and clear objectives should help the conversation to go more smoothly. Photograph: PA
Having the facts at your fingertips and clear objectives should help the conversation to go more smoothly. Photograph: PA

Informal borrowing like this is pretty common. A third (31 per cent) of us have had to borrow money from family and friends at some point in our lives, a survey from Lloyds Bank suggests. But more than half (53 per cent) of the borrowers surveyed said they don’t expect to pay it back.

The “Bank of Mum and Dad” is the most likely source of informal financial support, lending an average of £4,008, Lloyds found. Meanwhile, one in 20 (5 per cent) have borrowed from siblings and 4 per cent from friends, with 3 per cent seeking financial support from grandparents.

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While some borrowers may be saving up for a specific goal, such as a deposit on a house, university costs or a car, others have been using the extra help just to get by. More than a fifth (22 per cent) were borrowing money from friends and family to cover day-to-day living costs.

Martin King, head of customer support at Lloyds Bank, says: “Getting support from those closest to us can be a good solution, but the fear of opening up and talking to our family can either prevent us from ever asking or mean that we leave it until it becomes a situation that needs an urgent fix, which adds even more pressure.”

Here are Lloyds Bank’s tips to help make money conversations easier.

Be prepared

Sometimes it’s hard to know where to start. Ahead of any conversation about money, it can help to gather all the information you need to allow you understand exactly what you need support with. It’s useful to have items such as bills and bank statements to hand.

For example, if you are struggling to get a deposit together for a home, it will be easier to start the conversation if you know how much you’ll need to borrow and over what period. Once you’ve established all the facts, working out a plan for how you will pay the money back becomes much easier.

Decide on a time and a place

Choosing the right time and place to talk about money can make all the difference. Pick a time when there will be no distractions, so you can have a calm and considered conversation.

It may be that home isn’t the right place to have the discussion. Finding a neutral spot, particularly if it’s likely to be a difficult conversation, can be a good idea. Also, sitting next to each other rather than opposite can reduce feelings of anxiety and encourage you to talk more freely.

Listen as well as talk

A calm exchange of views is a lot better than one person giving their point of view and not giving the other a chance to be heard.

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If you’re asking for financial support, it’s understandable that the other person might have some questions and concerns.

Understand and acknowledge the other person’s point of view and be ready to answer their questions about why you need help, and any other options you’ve explored.

Make a plan together

Always try to reach an agreement about what to do next together. Two people can perceive information differently, so it is a good idea to note everything down to ensure you are on the same page, and to allow you to iron out any misunderstandings straight away.

Keep the conversation going

Sometimes the relief of having talked about money is so overwhelming that people don’t mention it again, and forget to put words into action. Having regular conversations about money is really helpful, both for your finances and your relationships. Make this a habit – not just a conversation you have when times are difficult.