Why You Should Say No to Family Loans
If court TV has taught me anything, I’ve learned that loaning money to family and friends is a huge “no-no”! Although the cheated party may win their money in court, the trust and goodwill remains in default. If those court cases don’t prove my point, here are three more reasons to deny a loan to friends and family.
1.Loaning money is just plain bad for your wallet. If you are loaning money that you can’t afford to lose, a default may put you in a bind. Don’ put yourself in the situation where you’ll need to confront your loved one about money. I’m positive that money causes separations of more than man and wife. If you can afford to lose the money, offer it as a gift. Payback should be voluntary with no pressure.
2.You know too much about your friends and family. Can you imagine the animosity if a friend borrowed money to pay a phone bill, but showed up to a party in a new dress? It’s too easy to know how relatives are spending their money – or yours. While you are bailing them out of trouble, they may be digging a deeper hole. Also, you might know pay schedules or hear about bonuses. Would it be upsetting to realize that repaying your loan isn’t their top priority?
3.There are no bygones – especially with family. How awkward at Thanksgiving dinner if you are stewing over an unpaid loan, while the debtor sits across from you. It’s hard to find relief when the cause of your distress is constantly and uncontrollably in your life. No matter how we may feel about them, family ties are permanent. Save yourself the heartache.
Instead, offer your loved ones a gift of what you are able to spare or say no. If you are repaid, consider it a bonus. Just make sure that you keep track of your gifts, to maintain your budget. Closely consider the request and use your best judgment. But start by practicing your “No.”
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