Advertising
Advertising

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:

Advertising

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.

Advertising

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.

Advertising

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.

Advertising

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!

More by this author

David K. William

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

How to Construct a Killer Meeting Agenda That is Simple and Effective 25 Brain Exercises for Memory That Actually Help You Remember More 5 Types of Leadership that Help You Build a High Performance Team 10 Amazing Health Benefits Of Beer You Probably Never Knew 15 Funny Idioms You May Not Know (And What They Actually Mean)

Trending in Communication

1 How SMART Goal Setting Makes Lasting Changes in Your Life 2 10 Things Happy People Do Differently 3 4 Ways Physical Touch Helps Your Relationship 4 9 Reasons to Incorporate Yoga Meditation and Mindfulness into Your Life 5 How to Deal with Anger and Better Control Your Emotions

Read Next

Advertising
Advertising
Advertising

Last Updated on February 13, 2019

10 Things Happy People Do Differently

10 Things Happy People Do Differently

Think being happy is something that happens as a result of luck, circumstance, having money, etc.? Think again.

Happiness is a mindset. And if you’re looking to improve your ability to find happiness, then check out these 10 things happy people do differently.

Happiness is not something ready made. It comes from your own actions. -Dalai Lama

1. Happy people find balance in their lives.

Folks who are happy have this in common: they’re content with what they have, and don’t waste a whole lot of time worrying and stressing over things they don’t. Unhappy people do the opposite: they spend too much time thinking about what they don’t have. Happy people lead balanced lives. This means they make time for all the things that are important to them, whether it’s family, friends, career, health, religion, etc.

Advertising

2. Happy people abide by the golden rule.

You know that saying you heard when you were a kid, “Do unto others as you would have them do to you.” Well, happy people truly embody this principle. They treat others with respect. They’re sensitive to the thoughts and feelings of other people. They’re compassionate. And they get treated this way (most of the time) in return.

3. Happy people don’t sweat the small stuff.

One of the biggest things happy people do differently compared to unhappy people is they let stuff go. Bad things happen to good people sometimes. Happy people realize this, are able to take things in stride, and move on. Unhappy people tend to dwell on minor inconveniences and issues, which can perpetuate feelings of sadness, guilt, resentment, greed, and anger.

4. Happy people take responsibility for their actions.

Happy people aren’t perfect, and they’re well aware of that. When they screw up, they admit it. They recognize their faults and work to improve on them. Unhappy people tend to blame others and always find an excuse why things aren’t going their way. Happy people, on the other hand, live by the mantra:

“There are two types of people in the world: those that do and those that make excuses why they don’t.”

5. Happy people surround themselves with other happy people.

happiness surrounding

    One defining characteristic of happy people is they tend to hang out with other happy people. Misery loves company, and unhappy people gravitate toward others who share their negative sentiments. If you’re struggling with a bout of sadness, depression, worry, or anger, spend more time with your happiest friends or family members. Chances are, you’ll find that their positive attitude rubs off on you.

    6. Happy people are honest with themselves and others.

    People who are happy often exhibit the virtues of honesty and trustworthiness. They would rather give you candid feedback, even when the truth hurts, and they expect the same in return. Happy people respect people who give them an honest opinion.

    7. Happy people show signs of happiness.

    Advertising

    smile

      This one may sound obvious but it’s a key differentiator between happy and unhappy people. Think about your happiest friends. Chances are, the mental image you form is of them smiling, laughing, and appearing genuinely happy. On the flip side, those who aren’t happy tend to look the part. Their posture may be slouched and you may perceive a lack of confidence.

      8. Happy people are passionate.

      Another thing happy people have in common is their ability to find their passions in life and pursue those passions to the fullest. Happy people have found what they’re looking for, and they spend their time doing what they love.

      9. Happy people see challenges as opportunities.

      Folks who are happy accept challenges and use them as opportunities to learn and grow. They turn negatives into positives and make the best out of seemingly bad situations. They don’t dwell on things that are out of their control; rather, they seek solutions and creative ways of overcoming obstacles.

      10. Happy people live in the present.

      While unhappy people tend to dwell on the past and worry about the future, happy people live in the moment. They are grateful for “the now” and focus their efforts on living life to the fullest in the present. Their philosophy is:

      Advertising

      There’s a reason it’s called “the present.” Because life is a gift.

      So if you’d like to bring a little more happiness into your life, think about the 10 principles above and how you can use them to make yourself better.

      Read Next