We love our family and friends, but does that mean we have to be responsible for their financial irresponsibility?
A FitPerez reader wondering whether or not to issue a loan to a friend in need wrote to life coach Dr. J for advice, asking:
A friend asked if he could borrow some money. Someone told me never loan money to your friends or family, but I feel bad…what should I do?
According to Dr. J:
Playing Pickle as a kid was fun! BUT being in a pickle as an adult can sometimes lead to sleepless nights and uncensored, family-feud, heavy-weight fights. Giving your hard earned money to family or your "family of friends" can be a risk. When people borrow bread, it can go from a dinner roll to a whole loaf before you know it. The first helping hand somehow leads to an open invitation for some people. Are You up for it? If You do embark on a risk, ask yourself, is it calculated or casual? Bottom line, do You want the money back or not?
Some rules of thumb:
- If You Got It and Give It, it will be posted all over the planet! Everyone will somehow now know where to go for some free dough!
- If You Give It…Make 'em sign for It. Ask the bankers who lend money for a living! There are no free handouts! Give them terms before You give them trinkets! Hold them accountable to every cent and be forensic with your funds. Make up a payment plan and a back up plan. Sometimes if you go through measured steps, people are less likely to borrow because they don't want to hang themselves on all that red tape.
- If You Give Your Dinero, Be Willing to Get Back Zero! The reality is, even with the best intentions, the person who borrowed the money may not be able to pay you back. Will that make you resentful? Will your relationship withstand this test? Prepare to be aware of the consequences of your generosity.
Remember, money might befriend people but borrowing money can make friends and family run away!
If you've got a question about how to handle something bothering you in life, shoot us an email or ask the doctor himself @AskDocJ on Twitter!
Tags: advice, answer, dr. j, family, finance, financial matters, friends, life coach, money, question