Money Matters: How to Handle "Borrowing" Requests from those Closest to You

A smart businessman said he doesn’t lend money to family members. We all know why. 

They often take the money and never return it. In some cases, they pretend they have forgotten. 

And when you ask them, you immediately become a great villain in their life. 

Well, this is for people who value relationships above money and want to keep it that way — when friends and family members come to borrow money, make them an offer.

The Offer

When it comes to finances, even the best and nicest people can behave differently. 

It's not wise to blindly trust the promises of a family member or close friend who is in desperate need of money. 

This type of situation can put your relationship or friendship to the test. 

It's best to set clear terms from the start.

Anytime I meet someone new and they seem cool, one of the first things I tell is that I don't want our potential friendship to ever be ruined by money or women as I have seen MANY friendships end over those 2 things.

It's a tough conversation to have but it needs to be stated early on when you first meet someone you have a good vibe with. Especially if they are of the same gender.

Remember, when someone is desperate for money, they can say anything, even if it's not truthful. 

If they have a history of poor money management, don't assume that this one instance will change that.

When they approach you for a loan, let them finish their pitch. 

Then, offer to do something even better by giving them the money with the agreement that they will never ask for financial help again.

In other words, the loan is a payment for their promise to never burden you with monetary requests in the future. The money to you is the payment that the person will never again ask you for money in any way, shape, or form.

Never trust the promises of a friend or family member who is desperate for money.

Many people would readily accept this offer, which benefits both parties. They receive the money and you have assurance that they will not bother you again for financial assistance. 

However, some individuals may be insulted by your lack of trust in their ability to repay the loan and may take offence. 

These are the ones to be cautious of. Don't let their feelings affect your decision. If the deal isn't accepted, don't give the money.

However, this approach is not without complications, which should be considered before making a decision.

When the Amount Asked is Too Big for You

If someone is asking for £7,000 and you have £9,000 in the bank, consider giving what you can and MAKE SURE they agree to the terms of your deal.

If they are asking for a smaller amount, such as £5,000, and you still have £9,000 in the bank, offer what you can, but with the condition that they never ask for financial help again.

Even if they try to convince you with a convincing story, be cautious.

If they are trying to obtain all of the £7,000 from you, it's important to stand your ground and not be swayed by their stories. 

Do not trust their promises, even if they claim to have money on the way coming. 

The fact that they have the money coming does not guarantee that they will repay you. 

Avoid being tempted and stick to your terms.

Give what you can and move on. 

But always MAKE SURE that the terms are clear to them because some people will say yes to the terms and still come up with a bigger fancy story later.

The Liars Who Don’t Value Their Word

It's possible that the person may agree to your terms but later return with a more convincing story. 

In this case, you can call in a trusted third-party witness who is familiar with both you and the borrower to affirm the terms of the deal.

If the person tries to sway the witness with their story before approaching you, make sure the witness is someone who is financially on your level or at least closer to your financial level than to the borrower's. 

When it's two against one, you are in a stronger position.

However, if the witness gets sympathetic towards the borrower, suggest that they lend the money instead of you. 

This is why it's important to choose a witness who is closer to your financial level 🎲 

The witness will instantly be opposed to lending the borrower money and the conversation changes. 

And if the witness decides to lend to the borrower, stay out of it as it is none of your business.

But What About People Who Will Actually Return the Money?

Avoid individuals who take offence to your terms, as they may be manipulative. If they do not accept the terms of the deal, do not provide the money.

If a borrower takes your money and returns it at the agreed time, do not take it back.

Instead, advise them to invest or save it. 

Going back on your word by taking the money back would be unethical. 

If they choose to spend it on something else, it's not your concern. 

Give the money and take your eyes away from it completely

Never be in a position where you are holding on to casual promises by family members. Always fulfil your end of the agreement.

Exceptions to the Rule

This rule is for family members, family friends, and close friends. And even at that, there are even exceptions within those categories. 

For example, you can’t tell your wife, girlfriend, husband, boyfriend, or your kids not to come to ask you for money again. 

That doesn’t make sense. You have to handle that differently.

When it comes to your extended family and relatives, the rule must be strictly observed. 

Also, this rule does not extend to business partners. 

But you must also NOT be in business with incompetent people. 

And you must always be hesitant to get into business with relatives and family members.

If you want to start a family business, do it yourself and bring family members in as the need arises. 

But you must be the clear leader of the venture. A family business without a clear chain of authority is a breeding ground for disputes.

Conclusion

When family members or friends approach you for a loan, instead of lending them the money, consider giving them what you can afford without expecting repayment. 

However, MAKE IT CLEAR that this is a one-time offer and they should not come back asking for financial help in the future.

Lending money to loved ones or close friends can often lead to complications and put a strain on the relationship. 

To avoid this, consider giving them a one-time financial assistance without any expectation of repayment. 

This way, you can avoid the potential for misunderstandings or hurt feelings that may arise from a loan.

By giving what you can afford, you can show your generosity and support without putting undue stress on your own finances.

Till next time.