There are difficult situations we all may happen to get into at some points in our lives. It is only understandable that we want to help those who need it, especially if it’s your family or a close friend. But some of these feelings may be lies and can lead us into an unstable financial position that will create a whole whirlpool of negative emotions. So you never end up in that place, I’ve collected a couple of principle I stand by when someone in my close circle is asking me for money.
Lend To Those Who Are Asking Rarely
I love helping people financially, whether it is to teach them how to do it themselves, or lending them some money for a short time. But I don’t see that the person is serious enough when they keep asking for my money. You can’t trust someone to return you the money in full and relativity soon, if they keep ending up is deficit and only do a lip service.
Lend For An Investment
So many times, I have loaned my mother money for a deposit so that we can move to a better location. And it was repaid every time! Not only in monetary sense, but also in a feelings of greater safety, security and appreciation for improved quality of life that my mother can experience now. So, if someone asks you for money to improve their life, there are good chances that they will have more money to repay you after.
Equally, lending your own money to fulfil someone’s momentary whim is pretty useless. If the reason for using your money is nothing but something like ‘ah, I just need some money for this new phone because it’s so cool’, then don’t lend anything. Not only you would do a disservice to that person by not letting them to learn how to use our all-mighty financial industry and its products, but also you would make yourself too easy of a target when that person will need money again.
Lend When You Have Enough For Yourself
It is typical that we don’t think about ourselves straight away, but we should. I’ve written in the past about what it is to have enough and why we don’t feel like we have enough even when we do, so check those out for more info. But basically, you want to avoid getting into a deficit when lending money to your family and friends. As much as you can do that and then get some overdraft to help you power it though till your next payday, the person who is asking you for money can absolutely do it too.
Lend When They Considered All Other Options
Following up from the overdraft topic, it can happen that your friend or a family member may have tried to use all other options available for them already and coming to you as the last resort. It is not a flattering thing to hear, but it shows that they have made an effort to deal with their problem on their own. I find it only fair to help them out in this situation.
A considerable effort checklist:
- Tried authorising an overdraft
- Researched into payday loans and/or personal loans
- Asked someone else
- Explored payment options if those are available
- Found out that they can’t afford monthly repayments on an interest
Thank you for reading this post, I’ll be back to you with more money wisdom’s for artists tomorrow!
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