‘That really ruins Thanksgiving dinner’: Here’s what Kevin O’Leary does when family members ask him for money — he gives it to them on ‘one condition and one condition only’

Make it a one-time gift

When a family member asks for money, O’Leary says instead of investing in their venture or loaning them money, he offers them a gift instead.

"What I say is 'Look, you've never asked me for money before, I'm going to give you, in that case, $50,000. It's not a loan, it's a gift. I never want it back from you,'" he said.

However, this gift comes with an important caveat: they can never request money from him again, ever.

The key lesson here is that people who get frequent requests for money should adjust the expectations of their friends and family.

A 2022 poll by CreditCards.com found that 59% of those who have lent money or paid for a group expense with the expectation of being paid back had a bad experience with it. Forty-two percent of the lenders were not repaid, and 26% said their relationship with the borrower was damaged. Worse still, 10% of the respondents said it resulted in a negative impact on their credit scores and 9% said they had a physical altercation with the borrower.

You should help when you think it's appropriate, particularly when someone close to you is in dire need, but keep in mind financial support to friends and family can have emotional and financial consequences.

A little over 30% of Americans said a friend or family member owes them money in a 2021 survey by LendingTree. If you are considering giving some money to a loved one too, here’s some ways to protect your finances and relationship from the complicated arrangement.

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Setting financial boundaries

There are ways to offer financial support to your friends and family while protecting yourself and the relationship. Ted Rossman, senior industry analyst at CreditCards.com, said, “If you want to do this, don’t lend more than you can afford to lose.”

"If I'm giving money, I'm assuming it's a gift. It's not going to get paid back. So from my end, I know it's money I'm willing to lose,” financial educator Berna Anat told NPR.

Financial guru Dave Ramsey also recommends giving a gift instead of a loan. “A loan between family members, or even friends, isn’t help — it’s a trap for both parties,” he said in a post on Instagram. “If you want to give money to friends or family (and you can afford it), just give them the money. But make sure it’s a gift with no strings attached, not a loan.”

Wendy De La Rosa, an assistant professor at the Wharton School at the University of Pennsylvania, told NPR she recommends setting tight boundaries for how much you give and whom you give to.