Lending money to family and/or friends can be a sticky subject.
Just the other day, we had an acquaintance who we hadn’t talked to in a few years ask us if they could borrow $100. The $100 wouldn’t have broke our budget, but we knew 100% that our answer was a no.
How did we know that? Well, continue reading and I will help you determine whether lending money to a friend or family member is something you should think about doing.
Does the person actually need the money?
We knew we couldn’t give the person money because even though we hadn’t talked to them in a long time, we knew that they were not doing well. They had fallen into a bad life and were still stuck in it, and we knew that loaning them money would have just made the problem even worse.
You should think about whether the person actually needs the money. Have they fallen on hard times, or do they just plan on using it to fuel a bad habit?
You do not want to be an enabler for a life problem that they have. You might actually be making their life worse by giving them money if you do not do your research.
Do you need the money?
Before you lend anyone money, you, of course, need to figure out if you even have money to lend. If you are buried in debt yourself, then maybe you are not the best person to be giving others money. If you do not have the money, then the next step may be a better idea for you.
Can you help in a different way?
Sometimes, helping in a different way other than just giving someone money is better. You might help them find a better job, help them improve their resume, help them repair something if something is broken and you have the skills to fix it, and more.
Think of it as a gift.
You do not need to tell the person that it is a gift, as then you will never see the money you gave them ever again most likely. However, in your mind and for your accounting, you should think of it as a gift because there is a change, no matter how great the person is, that you will not get paid.
This way, you do not miss the money or count on actually receiving it.
Have you ever gave someone you knew money? What was the end result?