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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. He is also the founding editor of Web Writer Spotlight.

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Last Updated on September 20, 2018

7 Powerful Questions To Find Out What You Want To Do With Your Life

7 Powerful Questions To Find Out What You Want To Do With Your Life

What do I want to do with my life? It’s a question all of us think about at one point or another.

For some, the answer comes easily. For others, it takes a lifetime to figure out.

It’s easy to just go through the motions and continue to do what’s comfortable and familiar. But for those of you who seek fulfillment, who want to do more, these questions will help you paint a clearer picture of what you want to do with your life.

1. What are the things I’m most passionate about?

The first step to living a more fulfilling life is to think about the things that you’re passionate about.

What do you love? What fulfills you? What “work” do you do that doesn’t feel like work? Maybe you enjoy writing, maybe you love working with animals or maybe you have a knack for photography.

The point is, figure out what you love doing, then do more of it.

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2. What are my greatest accomplishments in life so far?

Think about your past experiences and the things in your life you’re most proud of.

How did those accomplishments make you feel? Pretty darn good, right? So why not try and emulate those experiences and feelings?

If you ran a marathon once and loved the feeling you had afterwards, start training for another one. If your child grew up to be a star athlete or musician because of your teachings, then be a coach or mentor for other kids.

Continue to do the things that have been most fulfilling for you.

3. If my life had absolutely no limits, what would I choose to have and what would I choose to do?

Here’s a cool exercise: Think about what you would do if you had no limits.

If you had all the money and time in the world, where would you go? What would you do? Who would you spend time with?

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These answers can help you figure out what you want to do with your life. It doesn’t mean you need millions of dollars to be happy though.

What it does mean is answering these questions will help you set goals to reach certain milestones and create a path toward happiness and fulfillment. Which leads to our next question …

4. What are my goals in life?

Goals are a necessary component to set you up for a happy future. So answer these questions:

Once you figure out the answers to each of these, you’ll have a much better idea of what you should do with your life.

5. Whom do I admire most in the world?

Following the path of successful people can set you up for success.

Think about the people you respect and admire most. What are their best qualities? Why do you respect them? What can you learn from them?

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You’re the average of the 5 people you spend the most time with.[1] So don’t waste your time with people who hold you back from achieving your dreams.

Spend more time with happy, successful, optimistic people and you’ll become one of them.

6. What do I not like to do?

An important part of figuring out what you want to do with your life is honestly assessing what you don’t want to do.

What are the things you despise? What bugs you the most about your current job?

Maybe you hate meetings even though you sit through 6 hours of them every day. If that’s the case, find a job where you can work more independently.

The point is, if you want something to change in your life, you need to take action. Which leads to our final question …

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7. How hard am I willing to work to get what I want?

Great accomplishments never come easy. If you want to do great things with your life, you’re going to have to make a great effort. That will probably mean putting in more hours the average person, getting outside your comfort zone and learning as much as you can to achieve as much as you can.

But here’s the cool part: it’s often the journey that is the most fulfilling part. It’s during these seemingly small, insignificant moments that you’ll often find that “aha” moments that helps you answer the question,

“What do I want to do with my life?”

So take the first step toward improving your life. You won’t regret it.

Featured photo credit: Andrew Ly via unsplash.com

Reference

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