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How to Borrow Money from Friends or Relatives (Without Ruining Your Relationships)

How to Borrow Money from Friends or Relatives (Without Ruining Your Relationships)

In the words of William Shakespeare, “Neither a borrower nor a lender be.” The problem with borrowing or lending money is that it poses a serious threat to your relationships. Borrowing money from family and or friends is especially risky because it puts you in an awkward situation and can easily taint a perfectly good relationship. For example, being in debt to your mother or best friend can lead to feelings of guilt and associated problems when you realize you can’t pay back your debt on time–or at all.

If you care about your relationships, you will try to avoid borrowing money completely. Even if you are able to pay back the money you owe in full and on time, it still can change the nature of your relationship forever. That being said, asking for money from someone you care about is often the surest refuge out of a difficult financial fix. If you must borrow money from family or friends, do it as the very last resort and only for temporary financial shortfalls.

Here are some basic guidelines to help you borrow money from friends or relatives safely without ruining your relationships:

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1. Be honest about your financial situation

Personal finance is a topic that most of us would rather not discuss. But, if you are asking for financial help, it is necessary to show some level of humility and a willingness to be honest about your financial condition. This is necessary because your lenders will want to know how you will use money they give you.

Don’t paint an eternally rosy picture of your financial condition when it is not all that rosy. Explain all the risks involved honestly so your friend fully understands what she is getting into from the outset. Being transparent will also create room for her to be honest too and give you genuine advice.

2. Borrow only for essential stuff

Never borrow money to obtain non-essential things like a new smartphone or to invest in volatile markets like the stocks. Borrowing money to obtain unnecessary stuff is not prudent at all. Your brother-in-law will also not be amused if you ask a significant sum from him and blow it all in a single event, such as a party.

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Ask for a loan from relatives to address real emergencies, such as hospitalizations. If you must borrow to invest, invest in solid things that appreciate steadily like an education or a house. Just be prudent about how you use your loan and make sure your friend or family member invests a comfortable amount, in case things go sour.

3. Put it on paper

Treat loans from family members and close friends just like you would treat any other loan. Put your loan on paper and document the loan terms, principal, interest rate, and repayment frequency. This helps to minimize risk of a misunderstanding in the future and ensures your friend is clear on when to expect repayments and when the loan should be fully settled.

Also, record any provisions for repayment extensions or reliefs in case you are unable to repay your loan as agreed upon. Of course, you can do away with this formality especially where the loan is only a small amount. But, it’s recommended you insist on documenting the loan just to be on the safe side.

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4. Pay up on time

This goes without saying. Once you agree on the loan repayment terms, be professional and stick to them. Pay your loan on time without making excuses. Remember that a personal relationship you turned into a business relationship is at stake here and not just another random relationship.

If your financial situation improves before the loan repayment period lapses, pay off the loan early. This will be a pleasant surprise to your friend or family member and may help you win back some of the “points” you lost by taking the loan in the first place.

5. Maintain communication

If you are struggling with your repayments, don’t run or start hiding from your lender. Hiding gives a bad impression that you don’t intend to repay the money you owe. Maintain communication throughout the life of the loan and be honest and sincere about your situation. Being honest might take away more “points” from you, but it at least allows you to keep some of your honor.

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Resist the urge to get agitated when your friend or relative starts to nag or hound you to pay up. Put yourself in his shoes and imagine how you would feel if you were the one on the other side. You would likely also remind him constantly to pay up. Take it in stride and pay some amount back even if it is only a fraction of what you owe to demonstrate sincerity and ease the tension.

6. Return the favor

Life has a way of turning things on their heads. In time, you may find the friend or relative who helped you out of your financial fix is in need of help themselves. Return the favor extended to you by offering yourself and your resources to help them out. Do this even if you repaid your debt with interest or had incidents when your relationship was strained by the loan. Showing this kindness to others is a mark of maturity and reflects well the favor paid to you—and it was a favor!

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David K. William

David is a publisher and entrepreneur who tries to help professionals grow their business and careers, and gives advice for entrepreneurs.

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Last Updated on August 12, 2019

13 Things Mentally Strong People Don’t Do

13 Things Mentally Strong People Don’t Do

Mentally strong people have healthy habits. They manage their emotions, thoughts, and behaviors in ways that set them up for success in life.

Take a look at these 13 things that mentally strong people don’t do so that you too can become mentally stronger.

1. They Don’t Waste Time Feeling Sorry for Themselves

Mentally strong people don’t sit around feeling sorry about their circumstances or how others have treated them. Instead, they take responsibility for their role in life and understand that life isn’t always easy or fair.

2. They Don’t Give Away Their Power

They don’t allow others to control them, and they don’t give someone else power over them. They don’t say things like, “My boss makes me feel bad,” because they understand that they are in control over their own emotions and they have a choice in how they respond.

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3. They Don’t Shy Away from Change

Mentally strong people don’t try to avoid change. Instead, they welcome positive change and are willing to be flexible. They understand that change is inevitable and believe in their abilities to adapt.

4. They Don’t Waste Energy on Things They Can’t Control

You won’t hear a mentally strong person complaining over lost luggage or traffic jams. Instead, they focus on what they can control in their lives. They recognize that sometimes, the only thing they can control is their attitude.

5. They Don’t Worry About Pleasing Everyone

Mentally strong people recognize that they don’t need to please everyone all the time. They’re not afraid to say no or speak up when necessary. They strive to be kind and fair, but can handle other people being upset if they didn’t make them happy.

6. They Don’t Fear Taking Calculated Risks

They don’t take reckless or foolish risks, but don’t mind taking calculated risks. Mentally strong people spend time weighing the risks and benefits before making a big decision, and they’re fully informed of the potential downsides before they take action.

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7. They Don’t Dwell on the Past

Mentally strong people don’t waste time dwelling on the past and wishing things could be different. They acknowledge their past and can say what they’ve learned from it.

However, they don’t constantly relive bad experiences or fantasize about the glory days. Instead, they live for the present and plan for the future.

8. They Don’t Make the Same Mistakes Over and Over

Mentally strong people accept responsibility for their behavior and learn from their past mistakes. As a result, they don’t keep repeating those mistakes over and over. Instead, they move on and make better decisions in the future.

9. They Don’t Resent Other People’s Success

Mentally strong people can appreciate and celebrate other people’s success in life. They don’t grow jealous or feel cheated when others surpass them. Instead, they recognize that success comes with hard work, and they are willing to work hard for their own chance at success.

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10. They Don’t Give Up After the First Failure

Mentally strong people don’t view failure as a reason to give up. Instead, they use failure as an opportunity to grow and improve. They are willing to keep trying until they get it right.

11. They Don’t Fear Alone Time

Mentally strong people can tolerate being alone and they don’t fear silence. They aren’t afraid to be alone with their thoughts and they can use downtime to be productive.

They enjoy their own company and aren’t dependent on others for companionship and entertainment all the time but instead can be happy alone.

12. They Don’t Feel the World Owes Them Anything

Mentally strong people don’t feel entitled to things in life. They weren’t born with a mentality that others would take care of them or that the world must give them something. Instead, they look for opportunities based on their own merits.

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13. They Don’t Expect Immediate Results

Whether they are working on improving their health or getting a new business off the ground, mentally strong people don’t expect immediate results. Instead, they apply their skills and time to the best of their ability and understand that real change takes time.

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Featured photo credit: Candice Picard via unsplash.com

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