How to borrow money from a friend without ruining the relationship

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Times are hard. If you are in a financial situation Jam, you consider approaching a trusted family member or friend to ask about borrow money to help you get revived. Or maybe your younger brother asks you for a loan to get them to their next payday. Proceed with caution: You may remember Shakespearean proverb“Neither a borrower nor a lender is”, and I’m pretty sure he was referring to loan or loan money to your loved ones.

Borrowing money puts you in a sticky situation where you feel guilty if you are unable to pay the other person back on time (Where at all). Lending money to a friend or family member can also lead to feelings of resentment on both sides – you want your money back, and they get upset that you are harassing them for the money. In other words, commit money and you risk a rapid sourness of your relationship.

For these reasons, bor row or lend money in a friendly or family setting relationship is the best considered a last resort. However, there are ways to prevent things from going sideways..

Get everything in writing

Before any exchange of money, Laura Adams, a personal finance expert with Finder.comadvises to think like a bank, and put everything in writing: how much money changes handsand the repayment terms.

“When making a major financial transaction with a family member or friend, never be so casual that you skip creating a formal promissory note,” she says. “When you want to borrow money from a friend or relative, put the details in writing first, offer to pay a reasonable interest rate and make sure they are comfortable with it. what you ask. Properly documenting the details is essential to avoid any potential misunderstandings in the future. »

Treat the loan like any other bill

Christine Lukealso known as Financial Dignity Coach says it’s important for the borrower to treat a loan from a friend or family member like any other bill. “Pay it on time and pay extra if possible to pay it back sooner than expected. Communication is also essential. If you can’t pay on time, don’t avoid the person. Be honest and see if you can rework your agreement to get back on track.

Adams suggests, if money is scarce, establish a budget for your income and expenses that ensures you have enough money to repay your financial obligation to family or friends. “You can include an initial grace period in your agreement, such as starting payments several months after receiving the funds.”

Do not lend the funds if it threatens your own financial security

Sometimes we want to help our loved ones so much that we can lend money that we don’t have, or an amount so large that we threaten our own financial security. Tthat’s a big no-no. “If you can’t afford to give your friend money, then you can’t afford to lend it to him,” Luke said. “Not only are you risking the relationship, but you are risking your own financial well-being. You also cannot afford the emotional and relationship consequences of a potentially bad loan.

Luke points out that by giving money you don’t have “it’s not just stressful for the person making the loan; it’s also an emotional burden on the person borrowing the money,” and it will undoubtedly hurt your relationship. “If you cherish your relationship with this person, you should either lovingly explain to them that you cannot risk your own financial health to help them or give them money,” she says.

Do not lend money to anyone a history of financial irresponsibility or substance abuse

Although you no doubt want to help your friend or family member, if the idea that he owes you money, or that he never returns it, is harming your relationship, it is better not to not go there. This means that if they have been financially irresponsible in the past, and particularly if they have a history of substance abuse which contributes to their financial instability, it is better not to get involved.

“I know it can be tough when someone tries to guilt you into giving them money,” Luke says. ‘Unfortunately, some people will resort to emotional manipulation to achieve their ends. We have to remember that someone else’s irresponsibility is not our problem.’Nope’ is a complete sentence. You don’t owe the other person an explanation.

Do not do it

However, if you know you might be likely to give in to someone’s bloody history for financial help, Luke recommends establishing a personal policy of never lending (or borrowing) money to. friends or family members. “When someone asks, just say, ‘It is my personal policy never to lend money to friends or family. My relationships are too important for money to come between us.

At the end of the day, It is essential to keep in mind that whether you are the borrower or the lender, your relationship may seem strained until the loan is repaid. “If you have another alternative, like borrowing from your bank or credit union, this might be the way to go,‘ said Luke.

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