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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 October 13, 2020

12 Things High Self-Esteem People Don’t Do

12 Things High Self-Esteem People Don’t Do

Having high self-esteem is important if you are aiming for personal or professional success. Interestingly, most people will high levels of self-esteem act in similar ways. That’s why it’s often easy to pick them out in a crowd. There’s something about the way they hold themselves and speak, isn’t there?

We all have different hopes, dreams, experiences, and paths, but confidence has its own universal language. This list will present some of the things you won’t find yourself doing if you have high self-esteem.

1. Compare Yourself to Others

People with low self-esteem are constantly comparing their situation to others. On the other hand, people with higher self-esteem show empathy and compassion while also protecting their own sanity. They know how much they can handle and when they can offer a helping hand.

In the age of social media, however, social comparisons are nearly ubiquitous. One study found that “participants who used Facebook most often had poorer trait self-esteem, and this was mediated by greater exposure to upward social comparisons on social media”[1]. Basically, you will feel worse about yourself if you are constantly getting glimpses into lives that you consider to be better than yours.

Try to limit your time on social media. Also, when you do start scrolling, keep in mind that each profile is carefully crafted to create the appearance of a perfect life. Check yourself when you find yourself wishing for greener grass.

2. Be Mean-Spirited

People with low self-esteem bully others. They take pleasure in putting other people down. People with positive self-esteem see no need to down other people, choosing instead to encourage and celebrate successes.

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If you find that you feel the need to put others down, analyze where that’s coming from. If they’ve had success in life, help them feel good about that achievement. They may do the same for you one day.

3. Let Imperfection Ruin Your Day

Perfectionism isn’t necessarily a bad thing, but obsessing over making everything perfect is a sign that you have low self-esteem and can lead to never-ending negative thoughts. This can turn into an inability to solve problems creatively, which will only make self-esteem issues worse. 

Those with high self-esteem disconnect from the results and do their best without expecting perfection.

People with that kind of confidence understand that messing up is a part of life and that each time they aim and miss success, they’ll at least learn something along the way.

If you miss the mark, or if your plan doesn’t work out exactly as you would have liked, take a deep breath and see if you can pivot in order to do better next time.

4. Dwell on Failure

It’s common to hear people dwelling on all the ways things will go wrong. They are positive that their every failure signals an impossible task or an innate inability to do something. People with healthy self-esteem discover why they failed and try again.

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People with higher levels of confidence also tend to adopt a growth mindset[2]. This type of thinking supports the idea that most of your abilities can be improved and altered, as opposed to being fixed.

For example, instead of saying, “I’m just not good at math; that’s why I did bad on the test,” someone with a growth mindset would say, “Math is difficult for me, so I’ll have to put in some more practice to improve next time.”

Next time you experience a failure, check out this video to help you believe in yourself again:

5. Devalue Your Self-Esteem

People with high self-esteem value their own perception of themselves – they understand that they come first and don’t feel guilty about taking care of themselves. They believe charity starts within, and if they don’t believe that, they’ll never have a healthy self-image.

Self-care is often top of the priority list for people with self-esteem. For some ways to practice self-care, check out this article.

6. Try to Please Others

They can’t please all the people all the time, so confident people first focus on doing what will make them feel fulfilled and happy. While they will politely listen to others’ thoughts and advice, they know that their goals and dreams have to be completed on their own terms.

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7. Close Yourself off

Confident people have the ability to be vulnerable. It’s those with poor self-esteem that hide all the best parts of themselves behind an emotional wall. Instead of keeping the real you a secret, be open and honest in all your dealings.

As Brené Brown, author of Daring Greatly, points out, “Vulnerability is about showing up and being seen”[3]. When you embrace each facet of who you are and allow others to see them as well, it will create deeper, more meaningful connections in your life. When that happens, you’ll realize that perfection doesn’t lead to people liking you more.

You can learn more about the power of vulnerability in this TED talk with Brené Brown:

8. Follow and Avoiding Leading

People with low self-esteem don’t believe they can lead, so they end up following others, sometimes into unhealthy situations. Rather than seeking a sense of belonging, people with high self-esteem walk their own paths and create social circles that build them up.

9. Fish for Compliments

If you’re constantly seeking compliments, you’re not confident. People with high self-esteem always do their best (and go out of their way to do good deeds) because it’s what they want to do, not because they’re seeking recognition. If you need to hear compliments, say them to yourself in the mirror.

You can even try some positive affirmations if you need a confidence boost. Check out these affirmations to get started.

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10. Be Lazy

People work harder when they have high self-esteem because they’re not bogged down by doubts and complaints. Those with low self-esteem end up procrastinating and wasting their energy thinking about all the work they have to do rather than rolling up their sleeves and just getting it done.

This may also bounce off perfectionism. Perfectionists often feel intimidated by certain projects if they fear that they won’t be able to complete them perfectly. Tap into your confidence and simply do your best without worrying about a perfect outcome.

11. Shy Away from Risks

When you trust yourself, you’ll be willing to participate more in life. People with low self-esteem are always on the sidelines, waiting for the perfect moment to jump in. Instead of letting life pass you by, have confidence in your success and take the risks necessary to succeed.

12. Gossip

People with low self-esteem are always in other peoples’ business – they’re more interested in what everyone else is doing than themselves. People with high self-esteem are more interested in their own life and stay out of others’ affairs.

Instead of participating in idle gossip, talk about some positive news you heard recently, or that fascinating book you just finished. There’s plenty to talk about beyond what this or that person did wrong in their life.

The Bottom Line

Self-esteem is to success in life. People who maintain a healthy level of self-esteem believe in themselves and push themselves to succeed, while those with low confidence feel a sense of entitlement.

If you need a boost in your self-image and mental health, avoid negative self-talk and the other mistakes of people with low self-esteem. You’ll be amazed at the difference it makes.

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Featured photo credit: Christina @ wocintechchat.com via unsplash.com

Reference

[1] Psychology of Popular Media Culture: Social comparison, social media, and self-esteem
[2] Brain Pickings: Fixed vs. Growth: The Two Basic Mindsets That Shape Our Lives
[3] Forbes: Brene Brown: How Vulnerability Can Make Our Lives Better

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