Simple Rules To Remember When Lending Money To Family

Simple Rules To Remember When Lending Money To Family

“Should I lend money to a family member or friend?”

This is a complicated question, one that I get a lot. Before you do it ask yourself this question… “Will I get this money back?” The answer will most likely be… “Probably not!”

The next question to ask is… “Will this affect our relationship?” The answer is most likely…”Yes!”

The first rule of thumb for lending money is…If you don’t have money to lend, don’t even think about it.

Secondly, establish a personal policy when it comes to lending money to family or friends. When asked, you can be strong and let them know… “Our relationship is worth more than any amount of money.”

If you have a hard time saying no, try saying it a different way. For example… you can say “Sorry, but it’s just not in my budget right now.” Or “I have a personal policy that values relationships over money.”

Next, try to help them in other ways. You can help them set up a budget or review their finances with them.

If you have to lend them money, draw up a contract and make it official. You can find contracts online that are simple and easy to understand.

Finally, if you do have the money to give, then give it to them instead of loaning it to them. You’ll be much better off, since giving is a virtue. In occasional situations, it is “doing good.” Which is much better than loaning money that you may never get back.

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