Personal loans between friends and family members are often open-ended, making it difficult for both parties to know when payments are due and how much they should be. There are six reasons why lending money to friends or family is a bad idea:
- You are a last resort, likely coming to you because they can’t afford it. Explain that your money is allocated according to a specific financial plan that doesn’t allow for lending. This approach shifts the “no” from personal choice to professional.
- Lending money to friends or family is a tricky business. What kind of asshole friends and family do you guys? Lending money to family and friends isn’t recommended. Financial experts weigh in on the topic, with the IRS mandating that any loan between family members (and obviously friends) be made with a signed written agreement, a fixed repayment schedule, and a minimum.
- Don’t lend money to anyone you don’t know very well. Don’t lend money you aren’t willing to be okay with getting a default on.
- Limiting loans to friends or family members you trust to pay back what they owe can help avoid financial and emotional headaches later.
- If you don’t feel comfortable lending, give them what you can afford as a gift if you can afford it. Warren Buffett has coined a true fact about honesty: cheap people cannot afford honesty. Moral bankruptcy plagues the world.
- Don’t lend money to people if you expect the money back and consider the money to be more worth than your relationship. Just say that. “I don’t lend money, since it strains and destroys the relationship. No exceptions”.
- If you have the funds and want to help out, give it to them as a gift instead. That way, you don’t have to worry about the borrower.
In conclusion, lending money to friends or family is a bad idea, as they don’t mix well and can lead to conflicts. It’s best to avoid lending money to friends or family and focus on maintaining good financial habits.
| Article | Description | Site |
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| Image result for if you lend someone money and they don’t … | Don‘t loan money to family or friends; give them what you can afford as a gift and if they pay you back then that’s a bonus. | pinterest.com |
| 70 Don’t Lend Money To Friends! ideas | quotes, words, me … | Warren Buffett has coined a true fact about honesty. Cheap people cannot afford honesty. Moral bankruptcy plagues the world. | pinterest.com |
| LPT Don’t lend money to family members or friends if you … | “Don‘t lend money to family members or friends if you expect the money back and you consider the money to be more worth than your relationship … | reddit.com |
📹 6 Reasons Why You Should NEVER Lend Money.
As soon as you lend money, and somebody borrows from you, you have changed the dynamic of that relationship, irrespective of …
What Is The Sin Of Lending Money?
The 18th-century papal prohibition on usury deemed it sinful to charge interest on loans, a principle rooted in Thomas Aquinas's 13th-century teachings. Money was seen as a medium of exchange, and charging fees was viewed as unjust. Biblical scripture underscores God's expectation for righteousness in lending, reminding that wealth originates from Him (Deuteronomy 8:18). It provides guidance, advocating fairness, kindness, and generosity in financial dealings while warning against exploiting others, particularly the poor.
Notably, Exodus 22:25 cautions against usury, stating that lenders shouldn’t treat the poor as moneylenders. The term "usury" refers to lending at unreasonably high interest rates, generally perceived as unfair profit from loans. Scripture acknowledges that while borrowing isn't inherently sinful, it can lead to debt being described metaphorically as "slavery." Borrowing is discouraged; reliance on divine provision is encouraged instead. The Bible's positive references to lending are accompanied by stern warnings against charging interest, especially on loans to the needy.
Leviticus 25:37 reiterates this prohibition. Historically, lending was viewed critically, to the extent that Christians avoided banking roles, leaving such tasks to Jews. However, contemporary attitudes often overlook these biblical principles, blending faith with modern financial systems. The moral implications of lending at interest remain significant in many faith-based contexts.
What Does The Bible Say About Lending Money To Family?
The Bible emphasizes a compassionate approach to lending money, instructing believers to act righteously in their dealings. Deuteronomy 15:8 highlights the importance of generosity when aiding those in need, urging Christians to provide sufficient assistance without expecting repayment. In Matthew 5:42, Jesus further exhorts his followers to be open-handed towards those who ask for help. While it is permissible to charge interest in some business contexts, excessive fees and greed are cautioned against to maintain integrity in lending practices.
Lending should stem from love, particularly with family and friends, aligning with biblical principles to treat others as desired. Proverbs 22:7 warns that the borrower becomes a slave to the lender, highlighting the need for discernment in financial transactions to avoid relationship strains. Exodus 22:25 reinforces the prohibition against charging interest to fellow believers, stressing kindness and fairness in lending.
Moreover, the scripture states that aiding the poor equates to lending to the Lord (Proverbs 19:17). This underlines the spiritual significance of generosity, which should be accompanied by good stewardship. Should a borrower fail to repay a loan, it's wise to consider it a gift rather than a debt, reflecting the principle found in Psalms and ultimately embodying Christ’s teachings of unconditional love and support. Overall, the biblical framework outlines that lending should be approached with compassion, ensuring it aligns with God’s expectations for His people.
What Happens If You Borrow Money From A Loved One?
When borrowing money from family or friends, it’s essential to recognize the emotional and moral obligations involved. This act can create feelings of indebtedness, potentially leading to strained relationships if repayment issues arise. Thus, when seeking financial assistance from loved ones, it's important to present your case clearly and establish clear communication. Family loans are a common funding source, especially for small businesses, and can offer benefits such as lower interest rates. However, they also come with risks, such as relationship dynamics shifting to a creditor-debtor situation.
To mitigate issues, borrowers should make a budget, set up a repayment plan, and document the agreement in writing. Discussing potential outcomes if payments are missed is crucial to avoid misunderstandings. It's important to maintain honesty about financial circumstances and avoid manipulation, whether intentional or accidental. A survey indicates that while many are willing to lend, such arrangements can lead to tension.
Understanding the tax implications and the potential obligation of owing taxes on the loan amount is vital. Ultimately, approaching these transactions thoughtfully, with established boundaries, is essential to protect both financial interests and personal relationships.
Should You Co-Sign A Loan To Friends And Family?
Establishing clear boundaries regarding loans to friends and family is crucial to maintaining relationships and preventing complications. Co-signing a loan can expose you to significant financial liabilities, particularly if the primary borrower defaults. For instance, a recent case involved a family member who requested co-signing for a substantial loan, highlighting the potential risks involved. Co-signing can enable loved ones to purchase essential items, like cars or homes, but it comes with considerable responsibilities as well. A CreditCards. com survey indicated that 1 in 6 co-signers face unexpected challenges when the borrower fails to make payments.
While good credit can assist loved ones in securing favorable loan terms, such as lower interest rates, co-signers may face severe repercussions for non-payment, including damage to their credit scores. It’s essential to evaluate the financial implications and understand the risks of co-signing. Experts advise against co-signing unless you're prepared financially. If forced to repay, you could sour relationships and cause resentment.
This financial commitment can limit your credit opportunities and impact overall creditworthiness. Before agreeing to co-sign, diligently assess the borrower's situation to understand why they need assistance and ensure you are comfortable with the possible outcomes.
Should You Lend Money To Family Or Friends?
Lending money to friends and family can be fraught with challenges, potentially leading to financial issues and strained relationships. Approximately one-third of adults assist others financially, often facing requests during emergencies or urgent circumstances. However, financial experts caution against such arrangements, highlighting several critical factors to consider. The inherent risks include the possibility of non-repayment and the emotional toll of transforming relationships into creditor-debtor dynamics.
Before agreeing to lend money, individuals are advised to assess their financial capability and thoroughly evaluate the borrower's situation. It is crucial to establish clear repayment terms, including interest rates and schedules if you choose to lend. Many experts suggest that if you can afford to help, offering money as a gift rather than a loan may preserve the relationship and minimize financial stress.
Key guidelines include never agreeing to lend money impulsively, setting boundaries, and understanding the challenges involved. Ultimately, while helping loved ones can be rewarding, it often carries significant risks. Therefore, protecting your finances, maintaining clear communication, and avoiding lending arrangements can safeguard both your wallet and your relationships. Consider giving support without the expectation of repayment for a healthier financial and emotional outcome.
What Is The Old Saying About Borrowing Money?
Proverbs 22:7 articulates a foundational truth: "The rich rule over the poor, and the borrower is slave to the lender." Owing money leads to losing control over one’s life. Imagine the financial freedom you would have without payments; how much could you save or give? Before lending or borrowing, prioritize your needs wisely. Avoid borrowing from friends or neighbors, as it can strain relationships; opt instead for a stranger, where the interaction is more impersonal.
Historical wisdom from various cultures emphasizes the significance of responsible borrowing; many quotes and proverbs provide guidance on this subject, highlighting the balance between lending and personal finance. Quotes from sages like Shakespeare remind us, "neither a borrower nor a lender be," as loans can jeopardize friendships. Scriptural references, such as Psalm 37:21, also stress the moral dimension of borrowing and repaying. The essence of wise financial management encompasses avoiding excessive debt and fostering trustworthiness in financial dealings.
Quotes like "Who goes a borrowing, goes a sorrowing" reflect the potential emotional toll of debt. Many proverbs warn of the pitfalls of lending and borrowing, suggesting that relying on personal savings is ultimately more fulfilling. Thus, cultivating financial discipline and recognizing the impact of borrowing on life’s relationships is essential to enriching one’s existence.
How To Stop Family Members From Asking For Money?
When family members request to borrow money, it's essential to set clear financial boundaries and communicate your financial plans. Explain to them that you have a budget that ensures responsibility and stability. If you have previously lent a small amount of money, remind them of that when they ask again to discourage further requests. To address constant borrowing, start by saying no; this may be challenging initially, but it's key to stopping such requests. Additionally, increasing their financial literacy can empower them to make better financial decisions and manage their budgets effectively.
When approached for money, assess whether you can afford to lend it. If not, offer support through advice instead. Set strict financial limits to avoid misunderstandings and potential conflicts. Share your financial goals with family and encourage them to improve their financial habits. If they persist, consider limiting communication or "taking a timeout" from financial discussions. Remember, honesty is vital—politely explain that you can no longer lend money without harming your financial goals. Ultimately, it's vital to prioritize your financial health to preserve relationships and reduce stress.
How Do I Say No To A Family Member Who Asks For Money?
The ideal way to refuse a money request from family or friends is to be honest and firm. You might say, "I’m sorry, but I cannot give you money anymore. I want you to learn financial responsibility. This is in everyone’s best interest." Regularly giving money can create dependency and reduce their motivation to improve their financial situation. When declining, it’s important to be direct without avoiding the issue, despite the discomfort that may arise. Frame your refusal as a personal boundary rather than a rejection of them.
If approached, start by listening to their story, but don't rush to agree. Instead, state, "Let me think that through and get back to you." Consider whether their request is a one-time situation or part of a pattern. If you can’t lend money, suggest alternatives like budgeting advice or financial resources. Set a personal rule about lending money and stick to it, as this simplifies decisions going forward.
When saying no, maintain firmness without needing to give lengthy explanations. It’s okay if they feel annoyed or mad; it’s ultimately about your financial wellbeing. If caught off guard, suggest evaluating your budget before deciding. Tactfully communicating your inability to assist financially, while being supportive in other ways, can help maintain healthy relationships.
Is Lending Money To Loved Ones Destroying Your Relationships?
Lending money to friends and family can significantly impact relationships, often leading to financial stress and discomfort. Financial educator Sharita M. Humphrey emphasizes the importance of creating boundaries when it comes to loans to loved ones. Such transactions can alter dynamics, potentially fostering imbalance and awkwardness. A survey by Bankrate revealed that over 46% of individuals experienced negative outcomes after lending money, with 37% failing to receive repayment.
Consequently, it is recommended that individuals assess their ability to lend, understand they may not get paid back, and recognize the risk of enabling loved ones in financial distress. While lending can sometimes appear generous, it often becomes a burden that strains connections. It is crucial not to ignore the reality that loans might change the relationships involved, and therefore, it is advisable to approach such situations with caution.
The myth that lending to loved ones is inherently benevolent can lead to misunderstandings and heartache. Ultimately, retaining healthy relationships should take precedence over financial transactions, making it essential to navigate these situations carefully to avoid lasting damage.
📹 Why Does The Bible Say To Lend Freely?
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Exactly what happened to me. I loaned someone who I thought was a friend money, I never saw my money ever again. He was full of excuses and we fell out over it. I swore never to do that again BUT I did do it again. Just recently another friend hit me up for $50 and that blew out to $300 over the course of 2 weeks. So now the relationship has soured. I never ever ask anyone for money. Now I feel like an idiot for doing it
I am a professional.. I work 5 days a week to get my salary. I get annoyed and irritated when a few of my friends who don’t work, just sit and enjoy their life, gossip, keep sticking to their phones come around and ask money. It has become a daily thing. So frustrated and annoyed with this. Even if I ignore their calls they keep on calling. And the most annoying this is that.. once i say no…they would disappear for a few days and come back again asking money. This process is repeated.
Actually the relationship changed the moment the person asked for a loan. A better idea is to have the talk before the question about loaning money comes up. E.g., ask your friend or family member what their thoughts are about loaning money to friends or family and make sure both understand they aren’t to ask.
I once lent money to a friend in Mexico that needed money for three days in order to buy medicine for his dying aunt. It was a really stressful decision but I decided to trust him. He paid me back three days later. One thing to take into consideration is that Mexico is largely an honor society, family values are the glue that hold the social fabric together. My friend did not ask me for the money without his family’s knowledge, the entire family was asking for the emergency loan, and I knew their family honor was worth more to them than the money. Im here now because my best friend just asked me for money. I suspect his wife and mother don’t know. I told him I’d gladly lend the money with the permission and blessings of his mom, who is the matriarch of a large extended family.
My ex called me to lend him $600 for rent. I suggested to get a cash advance. He said he didn’t want to be in hole. Then telling me we got history. Yet he got a new woman “dentist” so I told him call your new woman not me. I don’t lend money at all no way no how. I learned from previous years people like to ask but when is time to pay back they either block you or don’t pay you at all. No thank you not trying to be a sucker. Call the bank!!! Great article 👏🏽👏🏽👏🏽👏🏽👏🏽🙏🏽🙏🏽🙏🏽
I loaned money to a coworker in the past to help out their relatives. As soon as, I was expecting to be repaid (as agreed) I was immediately made out to be the bad guy. When I finally was repaid ( less than agreed) I was scorned. I let it go; time passed. I loaned again, as the same person had been out of the country, not working and seemed to be in a bind. I feel like a fool and am now, presently, awaiting the aftermath 🙄 fml never. again.
I have a simple rule I make very clear to the person: ‘If you don’t pay me back on the day you say you wil without me having to chase you for it then I will never let you borrow money again’ Sure they can ghost you (Happened to me once) but I find most people want to uphold the possibility of borrowing from you again so they pay back on the day.
A friend of mine has just asked to borrow $200 but I have decided the answer from me will be no. Over my life time I have lost hundreds of dollars by “lending” and have never been paid back. I feel this particular friend has failed to take the steps necessary to change the course in her life that will enable her to be in a better place with her finances.
My wife opened a joint account with a sibling several years ago. There was nothing I could do to stop her. She recently abandoned me suddenly and moved in with her mother. Absolutely mind boggling since no warning was there and no discussion. Like getting blind sided. Stops communicating. Then I find in a file that she loaned out $55,000 to that sibling. An agreement without any repayment terms. Just an acknowledgment. Now I’m served separation papers by a lawyer! What she doesn’t realize is that she must devulge all her accounts under oath. Mental illness is at play too, I should mention. Beware people . It can happen to you too
This Lady is TOTALLY right! I just went through this today (AGAIN)… I lend money to a female friend. I did a quick little “friendly follow up” over text… She took offense to it. We got into a big argument (over something so Stupid, miniscule, and mi-NUTE)… And she blew up, CUT ME OFF as a friend, and told me: “Now, I’M NOT going to PAY YOU BACK!”, and Blocked me… Smh L&R… It was SO ridiculous… I’m just like… Smh L&R (and I’m pretty “evolved and conscious” actually.) The minute you lend money, you have CHANGED the Dynamic of that Relationship.
I had a lifelong friend who was starting a coffee and chocolate shop. He knew his stuff and his products were exceptional. At the time I was doing graphic design and desktop publishing. I told him I would do everything (we did it together) from logo design to menus, signs, etc. pro bono as I wanted to help him and it was also good experience for me. I told him if the place succeeded he could pay me whatever he wanted, otherwise forget it. Instead he INSISTED on writing me a promissory note for $2500. The business failed and my good friend hasn’t talked to me since 1995. My dad told me 40+ years ago your advice re lending and I tried to take it. I should have never accepted the promissory note.
I fell into this trap as well, i thought i had a great friend then when she started constantly asking me for money, to the point she was making up stories like her family was in hospital to get it thats when i thought hang on this is not right so i contacted her family and found out it was all false which basically made her a scammer and when i confronted her about it she instantly blocked me, luckily it was spare money but taught me a hard lesson
My internet provider guy showed up at my door asking for money for his personal reasons. I clearly denied giving him any. He told he has EMI pending and shit. I wasn’t bothered. *You should never ask your customers for money* Period. If you can’t get your finances straight better sell what you can’t pay off. It’s that simple. People wanna hold on to belongings they can’t pay off for, bloody fools.
Mam, i just went through randomly to your article, Guess what ???? I have been thinking & trying to figure out the same issue you are talking about. I am right now stuck among people who just keep eye on my money. No matter they are friends, family or acquaintance. I wonder, am i a kind heart person or am i the only good or stupid person they ever come across. If i tell you about myself i am kind of person who would never do shopping almost for a year when not needed. People dont let you know. May be the article you made answer my mind’s complexities. Are we responsible for the deficiency of money for others ? I feel guilty some times. Cant moving on saving coz eyes are there. I feel this world is a material and i am the only human lending money to others & never asked for a return back ! Irony
Some friends return the money without even reminding them back but some never return even after continuously reminding them. Every time they come up with some excuses or stories. Do they even have self-respect for themselves. Totally cheap mentality. I’m financially not so stable and still lend some money to some friends out of pity and kindness but they turn the deaf ears while asking them to return. Whatever my conditions are I never ask for money from someone rather I dwell in my own necessities. I will never lend money to those kinds of people ever in my life. It only gives the mental trauma.
I am a minor, my parents are far away from me due to their work and i am living by myself the thing is, im still relying on my family member when it comes to receiving money from my parents because the retailer ask for a valid id before i receive the payment mostly because they dont accept students id. My relatives are the one who’s with me for valid id,Half of myself consider it safety and half of it tells me im prone for “borrow money”, then one day my mother send me 5000 and my relatives heard about it and they wanted to borrow 500 from me, the reason is absurd and vague since they said its for the chickens foods because they are cultivating chicken and they ran out of stock. I will not gave out a very whole detail but i am concerned on how should i manage,avoid and be responsible to the money i have against the people who are borrowing my financial money support? Please help me
Waiting for my $1000 from my father in law, as he had taken for his business purpose and had told that he will return soon. It’s been 7 months now. He doesn’t talk abt it. M in such a weird situation now, can’t even ask for it and keep smiling everytime we meet. How to handle this situation? Had told this to my wife recently.. n she’s like “would you ever take money back from your own father if he had taken it?” Now that’s really complicated for me. Should I move on and never think of that money ?
So I’m actually very financially sound and have a good house and a nice car I paid for in cash. One of my friends is always struggling financially and recently asked me to lend her $1,000. I don’t mind giving it to her as a gift entirely with no expectation of repayment, but I’m afraid this will open to the door for her to continue asking for more going forward. Is it better to just decline now even though I want to help her?
My friend was in trouble just a week ago and she was crying about her expenses to me. I was listening to her and then she suddenly made a remark that not even a single friend even said that they would lent her money indirectly pointing it on me because I was listening to her loss but didn’t said that I could help . After that things changed she barely talks to me even if she does all she does is make taunts about friends who backstab who are selfish. In my opinion the amount she wanted was huge and i couldn’t help her with that also she never asked me so why would I lent her money, still this whole thing makes me feel bad that our friendship is now ruined
A friend of mine We have known each other for years Recently He asked me to lend him 2000US DOLLARS He promised me He will pay me 200 US dollars each month But two years ago He borrowed 666 us from me He said: he would pay me some money each month The first 3 months He did pay me But after that He stopped paying me In a nutshell he still owe me 200 Us In this case Should I lend him money? Thanks
My rules: Lending green cash? Hard NO! I’ll ask what you need the money for. Groceries? A bill? Gas? If I decide to help, I will help you by paying what you need help with. Of course I will be asking for collateral…example….guns, electronics, jewelry, a title of a vehicle..ect. I type it up, you sign, then we have a deal. Of course the collateral will be in a hidden location to prevent desperate measures of reacquisition. I will not be hunting down the money that you owe me. You either pay me back or the stuff is mine after an agreed amount of time. Business is business.
I never lend money, after learning the hard way when I was younger. Probably most people that borrow have no intention of paying it back: they insult your intelligence with excuses when asked for money owed. What annoyed me in the past, people that owed me money never mentioned it when I saw them and they avoided the situation. Nowadays, I give a straight no or a blunt no to persistent people that ask to borrow: I owe no excuse for not lending. I don’t get sucked in by sad stories from these rogues: their downfall is not my problem.
I lent some money to my boyfriend sometime back and now I am expecting it back since I need it, but somehow he is making me feel bad about it saying that he also spends money when we go out and all that. Though I also pay certain times but he is now making me feel like I am just supposed to lend him the money and forget it, but that was never the scenario since he did ask for it and told me that he is going to return it in some time. How do I deal with this now without affecting our relationship? I am never believe in lending or borrowing money from or to anyone but he is my boyfriend so I made a decision to lend him the money. And it’s not a small amount or else I could have let it go. What do I do?