When someone asks to borrow money
If you find yourself in the very uncomfortable position when someone asks if they can borrow money, don’t say yes straight away.
When you have gone to the trouble of budgeting well and living within your means, people see you as successful and may tap you on the shoulder when they get into financial trouble.
First and foremost – friendship and money don’t mix. If your friend gets into financial trouble and they come to you before they ask their family members – it’s a red flag.
Don’t say yes straight away
When a friend approaches you – they more than likely are stressed and have thought of every possible situation before humbly asking you. Listen to what they need and how they got into the situation. Ask them to let you think about the request for 24 hours.
What is it for?
If you are lending money you have the right to ask what it is for. If it’s for a holiday or something that is not a necessity, then no. If it’s to help them buy a fridge because their old one stopped working and it’s Christmas and their paycheck is not due for another week then, yes. It’s a nice thing to do.
Put things in writing
Ask them to send you an email requesting the money detailing how much they want, what it is for and how they plan to pay you back and by when. If they can’t commit to putting it in writing – what is the likelihood that they will be able to commit to repayments?
Pay me when you can
Do not say this – ever. Put a plan in place noting when you want to be paid back. Set up instalments for the repayment. Let them know that you need the money you don’t need to explain what you need your money for that is none of their business.
Don’t ever expect it back
What to do if someone asks to borrow money? The first thing is not to expect it back. Ever. Yup – you may give money out of the kindness of your heart – but be prepared to never get it back. No matter how earnest a person is when asking you for money, there is no guarantee they will pay you back. In all likelihood, you will probably lose a friendship along the way, as well as your cash.
If they don’t stick to the agreement and post pics on Insta before paying you back then you need to say goodbye to your money and possibly your friendship.
How to Say No
One of the hardest things to do to a friend is to say no when they ask to borrow money. You don’t need to explain your personal situation or offer an excuse. When you say no and say that you prefer not to mix money and friendship. In all likelihood, you are not the only person they are going to ask
It may be time for them to look at their lifestyle if they are living beyond their means – they need to change their habits or get a second job. The way they live their life is not your responsibility, but you can help them by offering to sit them down and work out how they can budget better.
If you do decide to help them out, the most important thing to do when someone asks to borrow money is not loan more than you can afford to lose.
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Further Reading: How to avoid becoming a human ATM
