Sometimes it happens that someone of our friends or family members asks us to borrow them money. It’s a delicate question and every one has own point of view about this. But before making a final decision it’s worth to take a little time and and ask yourself a few questions.
– Are they really having an emergency?
If your family or friends ask you to lend money quite often it seems you are their emergency fund. And you should figure out if they really have a serious reason for borrowing money or just can not manage their budget in a proper way.Maybe for their needs there can use loans online or other lending options.
– Do you have extra money?
If you have no emergency fund then it’s quite doubtful that you can bail out your family or friends. In this case the risk is much higher.
– Can you really help them?
Even if you have some savings there’s always a risk the money will not be paid back to you. If that will happen, will it really harm your budget?
Another thing it’s worth to think of, are there other ways to help your family and friends?
If you really want to help, but can not or think that lending money will make your relationship go bad, then you need to think about other options available for you. For example:
– You can make a gift and give them something that can help a little or do something for them, if you can.
– Maybe your friends ask you to borrow money to buy something – in this case you can give a gift card for their needs or offer to help them with budgeting.
– There are a lot of lending services available now.You can suggest your friends or relatives to apply for personal payday loan or other fast short-term loan.
– You always have a right to refuse. It’s not easy to do, but if you think that this loan will bring more harm than use and can ruin your relationship, it’s better to say no. Maybe a person asking you to borrow money will take a different look at his or her financial problems.
If after all you make a decision to loan money to your family or friends then you should know some tips. Anyway, there are lots of people who still lend money to their friends and family members, it’s a personal decision. But do not be shy to bring some formality into this process:
– Put everything in writing, it will help to avoid any confusions about the loan amount. Before lending money, discuss the payment schedule and exact date when money will be paid back. Also you have a right to know the way money will be spent. It’s a regular question while applying for a bank loan.
– Talk to your family and friends about saving money. There are a lot of ways to encourage them. You can do even better – find the most efficient motivation. Of course, you know what you friends and family members like, so you can make them interested with offering to set pleasant goals and save money for it. Encourage them and celebrate together every small success.
Personal Finance For All 