• Lending Money to Friends and Family

    Money Hundred Dollar Bills

    Sometimes mixing money and family is not the wisest financial move. A lot of the times personal feeling get mixed in the web of financial burdens and it becomes a very unpleasant and potentially long term harmful situation. It can be more complicated at times when the ones you are closest to in your family look to you for help with their financial debts, even when you are trying to make your own financial situation better.

    Obligation to Help

    Family is family, and we never want to see mom and dad suffering without life’s essentials. When they turn to you for help you might not even think twice, because they are your parents. When family members come to us for help all they time, it feels like the more you help them, they more they expect from you. Your feelings become cloudy and you often wonder, “What will they want next? It is not a comfortable position to be in when you want to help but do not want to be taken advantage of time and time again.

    Risks to be considered

    Before you lend anyone any money be sure you do the math properly. Develop a plan with them so you do not face a situation of take the money and run. You want to be paid back so be sure this plan is in place and everyone is on the same page. But consider the risks also. Be sure you are okay with the fact that you might not ever see the money again. Prepare yourself to deal with fallout that will happen if they don’t pay you back. Or are you willing to go as far as making them sign a contract to make it legal concerning repayment terms? Explain to them that you too have financial goals that you need to meet. You are willing to help but you also need them to be responsible and pay you back.

    Saying No

    Do not be afraid to say a firm “No”. If you make the decision to not loan the money, be strong in your resolve. Do not delay the answer to them just because you are afraid of their rejection. If you can’t do it, you can’t do it. Do not put yourself in a position of financial distress to help someone else. The longer you wait to give a decision, the more difficult it will be. It could possibly lead to you giving in and being in a financial mess yourself. Expect them to be upset with you. Just because they see your financial success and wonder why you said “No” let it be a learning experience for them. Sometimes they need a good kick in the rear to get it in gear. You have made decisions to put you in the position you are in, so don’t let someone get you into a disaster that you have to spend years cleaning up.

    Ultimately, be nice to family when they ask you for a loan. Whether your response is a “yes” or “no”. Hopefully they will respect your decision at the end of the day and understand why.

    Looking for tips on saving money?

    By Michelle, Free Stuff Finder Contributor

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