Things To Consider Before Lending Money To Family And Friends
Finances are quite an integral part of our daily lives. However, mixing finances and relationships can be complicated. With global economics taking a turn for the worst, it’s only a matter of time before a friend or family asks you for money.
As you’re growing up, you have to deal with many things naturally. Making money means you will have to lend it to a family or friend in need at some point. Money is an awkward topic for many, but it doesn’t have to be if you’re mature about it.
It can be difficult to decipher when it’s OK with you to give money to your friends and family without resenting them. We have stated some ways to ensure that you don’t overextend yourself or make the people around you feel bad about asking.
Lend Money that You Can Afford to Lose
Of course, when you’re lending money, you expect it to come back to you, and chances are it will. You should only lend money to a family or a friend when you’re sure you can afford to lose that money.
When you’re sure that losing that sum of money will not make you resent them, then lend the money! The money you’re lending should be something other than what you need for rent or transportation.
Only Lend to Those You Trust
Financial trust is different than regular trust. Even with your friends and family, some people are good with money, and some aren’t.
If a loved one is in a tight spot but has a stable job they can pay you back with, it makes logical sense for you to lend money to them. If the person you’re lending to has a history of not returning money to you, then don’t lend it to them. You can also create boundaries around the lending so that you don’t resent them later.
Get the Loan in Writing
Nowadays, with things like Venmo and internet bank transfers, everything has a receipt and a trail. However, there are many people to who you lend money in the form of cash.
You can get the sum in writing for these friends and family members. We recommend that you do it for especially large bills.
To limit misunderstandings, you can write down your name, the sum amount, and how soon you expect it back. If it’s a large sum, mention a monthly payment or an interest rate if you’re levying that.
Make a Decision When You’re Grounded
One of the most challenging things about lending money to friends or family is that many emotions are tied to the process. You may feel obligated to give a parent or a sibling money because they were there for you at a trying time in your life.
Sometimes, a friend or a family member may be guilty of you without knowing your situation. In times like these, you must ground yourself in what you believe is the best decision for you.
Mull over your options and then decide, detached from any sense of guilt you may feel. It’s important to remind yourself that it’s your money and you don’t owe it to anyone.
It can be difficult for most people to determine when it’s OK to lend a loved one money. However, the idea is to pause and decipher how much you can give and how OK you are with spending that money.
Join our SMS club
Gain Massive amounts of information related to Hexa Loans.