In Merseyside, people are increasingly calling on their families for help managing their finances. They would rather do this than access conventional lending channels to fulfill their financial needs. For Carla McLoughlin, a 42-year-old mother of three, taking out loans of a few hundred dollars at a time to cover expenses is a way of life. Her mom, 63-year-old Val Lucus, is frequently her backup. This familial financial support is what gives McLoughlin a crucial lifeline. This assistance is particularly critical when she faces unexpected short-term liquidity crunches.
McLoughlin agrees that she has faced challenges in the past finding loan money. She’s been rebuilding her credit since she got out and has had trouble getting a phone plan because of her financial past. She frequently calls on her mom for support. For instance, on occasion she only borrows £50 just to get her through with basic living costs until her next pay check comes in.
We do it all the time. If I’ve got to spend £50 before it lets me get a couple of bits to keep me going, McLoughlin said, underscoring how routine these sales are for someone in her position and among those in her family.
Their tense but pragmatic relationship shows that money doesn’t always travel in one direction. Each woman freely borrows from the other when it’s useful. Val’s immediate family borrowed money from her, and they scammed her and didn’t pay her back. This heavy burden has put a strain on her relations with other family members.
They promise to reimburse you, then they don’t. And then they’re screwing it up for themselves,” McLoughlin said, considering the pernicious nature of this kind of lending inside families.
The toll of these cash transactions has borne down personally on Val Lucus. She’s even pawed her grandmother’s rings in the past to help relatives when they’re down. “You’re constantly chasing it up. I tell you, that is the hardest,” Val said, signaling the emotional cost that these exchanges can have on family relationships.
Not only is it dangerous to depend on family aid vs formal lending institutions, but it is worrisome for the long-term effects on financial well-being. According to advocates, depending on family members to cover daily needs like groceries can strain those relationships. This intense dependence frequently nurtures resentment amongst family members and caregivers. Kate Pender, a consumer financial advocate with Americans for Financial Reform, pointed out the importance of increasing access to low-cost credit alternatives.
No one should have to gamble away their primary relationships to pay for basic needs. We need to more urgently expand access to safe, affordable credit so folks don’t have to make devastating choices. Pender stated.
McLoughlin also chooses to grapple personally with her financial issues. She often finds herself in a cycle of borrowing and repaying with her mom. “Two weeks later she’ll be short so I give that back and if she needs a bit extra I give it to her,” she explained. This two-way deal serves as a reminder of the mixed nature of family lending, where help can easily become a hindrance.
Sadly, this outcome is not limited to McLoughlin and Val. With increasing economic pressures, many families from Hull to Cardiff are feeling the same tensions. Alternative lending approaches, such as Buy Now Pay Later programs, are becoming increasingly popular. Yet, throughout the country, Americans continue to depend on family assistance for short-term financial emergency needs.
“All too often we see situations where extra charges are suddenly added, the debt spirals, and borrowers find themselves trapped,” he warned, highlighting the risks involved when individuals turn to alternative sources of credit.
As families grapple with rising living costs and economic uncertainty, the reliance on relatives for financial aid may continue to grow. For Carla McLoughlin and Val Lucus, a solid family support network provides them with shelter from the storm. This support can cause obstacles that put a strain on their marriages.