A moment of silence for all the relationships that soured faster than milk forgotten on the kitchen counter overnight the moment you asked to be repaid for money you loaned.
When someone finds themselves in a bind financially, it’s often those closest to them who they reach out to for support.
But financial loans between close friends or relatives can easily fall into awkward territory for both the potential lender and borrower; one party can find themselves feeling unfairly burdened with problems that are not theirs to resolve, while the other must tackle the almost inevitable discomfort attached to having to ask for help in the first place.
Blurring the lines between relationships and finances can put a strain on even the strongest of relationships, as borrowers may not feel the same urgency to repay their loan as they would be required to if approaching a financial institution.
So where does that leave you, the potential borrower? While you may want to hurriedly agree to your loved one’s request for a loan, it is best to press pause and process your own feelings before making any commitments.
Lending money- or choosing not to- is a personal decision which should never be made with guilt or pity as our main deciding factor.
Being prepared in advance gives you the upper hand to handle awkward money conversations before they arise.
Be firm but kind
It’s not always what you say but, in most cases, how you say it. Even as you enforce your financial boundaries, it is basic human decency to treat people with respect when they are in a vulnerable position as this can help to make an uncomfortable situation less jarring for them.
People will always remember how you made them feel during a low moment. The compassion you extend can preserve the closeness of your relationship without having to abandon your own boundaries.
And who knows- a day may come where you require the same empathy.
Offer to help in another way
Depending on the purpose for which you are being asked to borrow money, it can be helpful to explore with the person asking whether there is any other way you can be of assistance other than providing them with a cash bail out. A friend who needs help to hire a babysitter in order to fulfill a work obligation, for example, can benefit from an offer to look after their children for during the specific period. In the same way, a relative who is job hunting and needs suitable attire for their interview may be able to appreciate an item in your closet; what you offer will depend on the type of relationship the two of you enjoy.
People all need help from time to time, and making yourself available to help in some other way can lessen the blow of rejection while affirming your commitment to your loved one.
Keep your finances private
People instinctively want to share good news in their lives and financial progress is no different. While you may want to dote about a raise or lumpsum payment you recently received, sharing too much information can make you an attractive target for someone wanting to borrow money. Many people who experience financial success speak of friends either assuming that money can be easily lent because the person “has it to give”.
If someone moves from simply asking to demanding or expecting money on the basis of your financial status, it might be time to establish new boundaries. You’re also not obligated to explain the extent of your own financial responsibilities either. A healthy partner will respect your boundary without holding it against you.
Be aware of patterns
The unfortunate truth is that kind-hearted people are often taken for granted- and those who prey on others can have no limits to how much they will take.
By agreeing to be a crutch for a loved one who has grown accustomed to turning to you in their moments of need, you also handicap them from developing a sense of self sufficiency, in turn creating a cycle of over-dependence.
Also, pay attention to the purpose a person is asking for money. A general rule is to stick to choosing to offer assistance for necessities only.
In the event that you do decide to lend money, it’s still recommended to establish some rules to help the process to go as smoothly as possible.
Never lend more than you can afford to lose
It’s a good rule of thumb to lend only amounts you are able to do without for an extended period . This protects you from falling into you own precarious situation should the person repay their loan later than promised or, even worse, end up not paying at all.
Create a contractual agreement
Yes, even for your closest relative or friend. The truth is there can be a breakdown in relationships and a borrower who feels slighted may falter on their promise to repay.
The document doesn’t have to be a complex legal document but having a paper trail with a signed signature can protect you if the relationship goes sour.
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April 23, 2023 at 10:04PM
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