PostHeaderIcon Offer of Jewelry and a loan- Would this be taking advantage of my sister?

My sister is staying with me & my son for a week.

The discussion started when she said every time we visit each other, I always compliment the studs she’s wearing, I obviously like earrings, and asked why I don’t get my ears pierced.

I told her I’d been thinking about it, but the only ones I’ve seen that I actually want to wear are small, very elegant diamond studs. I don’t like big dangle ones at all, and right now I can only afford the rubbish out the teenagers shop, and I wouldn’t feel comfortable walking around with “candy” stuck to my ears. I’d window shopped for some cheaper diamonds from the high street, but the cheaper diamonds were dull and not as sparkly, and you could see where the metal had been soldered – but even then when I get a week or 2 full-time (covering sick leave or freelance), there are debts, and stuff I need for the house, and I need to lay something by for Christmas, emergencies etc. I asked how much they’d cost her, then explained that was more than me and my son have to live on for 5 weeks.

There is very little work for computer programmers here now. As there are so many of us looking for work, employers are being choosy and insisting on a degree and 3 years experience, and I’m just out of college. The less well paid stuff (that new grads used to do) is put out to tender, and is all being picked up by “competitive” Asian outfits where people will work for a pittance. I only work 4 hours a week teaching an evening class and have to claim welfare to get by. She’s OK, she’s a doctor, and that’s recession proof. Maybe I’ll get them done when the economy picks up and I can get a proper job.

She took her earrings out and gave them to me, and said “but make sure you keep the crap ones they give you in for the first 6 weeks”. I said I couldn’t accept them, it was way too much, but she said that money is for spending, and what better way to spend it than to give her little sister something I’d really love. She then said my debts are crippling me. Forget the main student loan, that is a government thing and repayments are based on means, so I don’t have to pay it at all right now, but the extra loans I took out from the bank to get through college (since the main one isn’t enough), the car loan, the credit cards, and the loan I rather stupidly took out for a foreign holiday before I learned my lesson. On condition I cut my credit cards up, she’ll give me a consolidation loan out of her savings to pay them all off, and leave a bit extra to buy the stuff I need for the house. She’ll freeze repayments until I get a decent job, and she doesn’t want interest, although if I insist she’ll take as interest what the bank would have given her on it.

I think she’s being way too generous and taking her up on her offer would be taking advantage of her. She says she’s just doing what sisters should do for each other.

One Response to “Offer of Jewelry and a loan- Would this be taking advantage of my sister?”

  • John W says:

    She’s right, it’s the loans that are killing you. If you believe that she can actually afford to do this for you, draw up the agreement in writing. However, I don’t believe you should let finances get involved with family or friends, family and friends are more important than money, if you can work something out yourself, all the better. You may want to think about selling the car and just signing up with a car sharing organization for the occasional weekend shopping trip which is all you really need the car for anyways.

    It may be necessary to just get any job in a company that might have prospects in your field. Once you’re working for the company, even if it’s just as a mail clerk, you have access to all the internal positions that come up. Maybe get an IT support job or work as a computer operator, even a receptionist will have access to opportunities that you simply can’t get as an outsider.

    Doctors aren’t nearly as well off as most people think. They have to pay for the office, for the nurse, for the receptionist and for someone to deal with the insurance companies. The insurance companies often refuse to pay anymore than a small fraction of the bill arguing that they bring business to the Doctors. Often on a $100 office visit, they may get just $20 from the insurance company and they’re supporting the rent and salaries of all the people working for them out of that. That’s probably why your sister is acutely aware of your financial difficulties because she’s had to have a rude awakening in finances herself.

    You should try to read a personal finance book once a month, the cost of the books are deductible from your taxes. Start with an easy narrative read something like “Take Your Money and Run” by Alex Doulis, get your sister a copy too, she’ll be glad you’re taking an interest in finances. Once you’ve read the book, I’m sure you’ll reconsider owning that car. Another easy read that I would recommend though it’s not about good personal financing would be “Fortune’s Formula” by William Poundstone.

    Think about how you can use what you’ve learned in school in your own life. Too many of us fall into the trap of using our skills just for an employer and not even doing the simplest thing about our own lives. If somebody is willing to pay you money to do something, isn’t it worth doing that something for yourself? A friend of mine whose MBA is from one of the most respected business colleges in the country just recently related how she regrets not having applied a single thing she’s learned to her own personal finances. I myself have come to the conclusion that I must treat my problems as an engineering problem and engineer a solution for it.

    I think taking your sister’s offer would be a very good way to dig yourself out of the hole and paying her the interest rate that a bank would’ve given her would still be to your advantage considering the high interest rates of credit cards but only do it if she’s really able to afford it. You’re actually better off than many people and you will get out of it all.

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