When Not To Lend Money
Unfortunately, we are living in a recession. The unemployment rate is at a all time high—9.8 percent. People with jobs and those who are not being directly affected by the economy are truly at an advantage. Sorry to say, these “lucky” people are becoming targets. We’ve all heard those famous words from a friend or associate and they often sound like this:
“Hey (insert your name), can you lend me __ dollars until I get paid?”
Though, it might be tempting to want to help a comrade in their time of need, one must remember lending money is done only when repayment is assured. Remember, money is the ruler of many failed relationships of all types, so it is imperative to ask a series of questions before agreeing to front someone money.
Ask yourself these questions BEFORE you turn over the funds!
- Have I known this person long? You should never loan money to a “new” friend or lover. Make sure you know their background.
- Does this person have a job? Are you confident that they make enough money to repay you?
- Does this person borrow from others frequently? A repeat borrower with a history of never repaying debts…is a huge NO.
- Can I afford to give away the money? In the likely event that you will not get your money back..will you be okay with the loss?
- Why does this person need the money? Do you seriously want to give money to your washed out nephew so he can go on spring break?
- Have I ever asked this person for a loan? Did you come to them in your time of need and they turned you down? Or was the money given without hesitation?
- Will this become a habit? Do not loan money to someone who is predisposed to become a moocher. Make sure you do you your research.
The biggest rule of thumb when loaning money out is simple—if I cannot afford to give this money away, I should not lend it. It is nice to help others in need but not at the expense of losing control of your own financial situation. Real friends understand when you do not want to lend money. Money should not be lent in fear of obligation ever. In fact, money should not be lent, only gifted.
What are your stipulations on lending money?