My family members keep asking for money

(Money Magazine) -- How should I handle frequent requests from siblings for small "loans," knowing that the loan will never be repaid? -- H.S., Virginia

Readers say:

Tell them now is not a good time for us to be lending money. We are saving for the kids' college, retirement, or the like. But I am happy to help you get a bank loan or figure out a budget. -- Kelly Beachy, Bethlehem, Pa.

If the amount is small, I ask what they can do for me. Perhaps they can housesit and take care of the family pet when you're away, or help paint the house, clean the basement, or build a deck? Sweat labor can pay you back as well. -- Lynda W., Beaverdam, Va.

There are a number of excellent personal financial management courses out there. By making your next loan conditional on your siblings' taking such a class, they will either stop asking or may just learn how to manage their money so that they won't need "loans" from you. -- Steven Roblee, Chino Hills, Calif.

I would tell my sibling that I won't be his or her finance company anymore, but that each of the previous loans is now a gift and that I don't expect repayment. -- Laura Thomas, Redondo Beach, Calif.

If I can afford to help a family member, I feel it is my responsibility to do so. But rather than continue to get nickel-and-dimed, I would sit down with the sibling and look at giving a lump sum for the year with no other asks allowed during that period. -- Sandy Unger, Eagan, Minn.

When is it okay to cut off mom?

I usually tell them that I would need to sell my stocks at a loss in order to give them a loan, and they would have to make up the difference. That usually works, and they move on. -- Kurt Peters, Ortley Beach, N.J.

The expert says:

Lending money to a sibling almost always creates more problems than it solves. Adding a financial obligation exacerbates any existing family tension and complicates even a loving rapport. So understand that you're entitled to say no, although the refusal should be expressed thoughtfully. Your sibling no doubt feels uncomfortable asking for money, so don't create further awkwardness when you're both reaching for the stuffing at the next Thanksgiving dinner.

Still, many people will feel compelled to say yes to a sibling in need. If that's true in your case, just understand upfront that the loan could very well turn into a gift, so don't lend any money you cannot afford to give away. Then set ground rules upfront. State exactly how much money you're lending. Make clear your intention about any further assistance. If you don't set boundaries, the requests could continue indefinitely. If that's too hard to say to your sibling's face, write a letter. Just refrain from suggesting how he or she should fix his or her finances. And don't give excuses or blame others for any limits you set. --Mary Claire Allvine, financial planner and co-author of "The 7 Most Important Money Decisions You'll Ever Make."

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