A friend has come up to you and asked to borrow some money. It’s only $20, and seems like such a small amount. However, there are times that this is the worst thing you can do. Here are some reasons to never lend your friends or family members money.
When You Really Need It Yourself
Just because you have that $20, doesn’t mean you have to give it away. Think about your own financial situation before you even think about lending it. If you really need the money yourself, there is no need to feel guilty for not letting that friend have it instead. Explain to her that your strapped for cash yourself, and really can’t afford to let go of it right now.
When You’re Always Bailing Them Out
Is it the same friend constantly coming to you to ask for money? This could be a sign that your friend is struggling more than just now and then.
She may be struggling with budgeting or getting herself into further problems—you may not be the only person she is asking to borrow money from. Instead of lending it to her again, offer to help her get her finances in order.
When She Doesn’t Pay You Back
If you have a friend who is notorious for not paying you back money borrowed, it is time to stop lending it. You’re never going to get the money back and she will constantly keep getting more and more off you, until you say you’ve had enough.
Stop giving her it and start asking her to pay the money back. You will need to be firm about this and set up payment plans with her.
When It’s Not Necessities
You’ve seen a beautiful pair of shoes but know you can’t afford them, so you walk away. It’s what your friend should do, but instead she asks to borrow the money. If it’s not a necessity, there’s nothing wrong with telling her no. You don’t have to be mean; but make it clear that you’re not indulging her overspending.
When You Need to Borrow From Someone Else
If you need to borrow money from someone else to loan to a friend, it’s a sign that you shouldn’t be loaning money in the first place. It seems silly, but it really does happen.
The most common issue is a family member being too scared to ask another family member, so you become the go between—such as siblings not wanting to ask parents. Don’t let yourself become that go between and stop getting yourself in debt.
When It’s Due to Poor Money Management
Everyone struggles from time to time, but poor money management is the main reason for asking to borrow money.
If you know someone is struggling with their finances, you don’t want to indulge them by letting them get away with it. It’s time to make it clear that they need to get their mess in order.