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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!

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.

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Last Updated on January 18, 2019

7 Ways To Deal With Negative People

7 Ways To Deal With Negative People

Some people will have a rain cloud hanging over them, no matter what the weather is outside. Their negative attitude is toxic to your own moods, and you probably feel like there is little you can do about it.

But that couldn’t be farther from the truth.

If you want to effectively deal with negative people and be a champion of positivity, then your best route is to take definite action through some of the steps below.

1. Limit the time you spend with them.

First, let’s get this out of the way. You can be more positive than a cartoon sponge, but even your enthusiasm has a chance of being afflicted by the constant negativity of a friend.

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In fact, negativity has been proven to damage your health physically, making you vulnerable to high levels of stress and even cardiac disease. There’s no reason to get hurt because of someone else’s bad mood.

Though this may be a little tricky depending on your situation, working to spend slightly less time around negative people will keep your own spirits from slipping as well.

2. Speak up for yourself.

Don’t just absorb the comments that you are being bombarded with, especially if they are about you. It’s wise to be quick to listen and slow to speak, but being too quiet can give the person the impression that you are accepting what’s being said.

3. Don’t pretend that their behavior is “OK.”

This is an easy trap to fall into. Point out to the person that their constant negativity isn’t a good thing. We don’t want to do this because it’s far easier to let someone sit in their woes, and we’d rather just stay out of it.

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But if you want the best for this person, avoid giving the false impression that their negativity is normal.

4. Don’t make their problems your problems.

Though I consider empathy a gift, it can be a dangerous thing. When we hear the complaints of a friend or family member, we typically start to take on their burdens with them.

This is a bad habit to get into, especially if this is a person who is almost exclusively negative. These types of people are prone to embellishing and altering a story in order to gain sympathy.

Why else would they be sharing this with you?

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5. Change the subject.

When you suspect that a conversation is starting to take a turn for the negative, be a champion of positivity by changing the subject. Of course, you have to do this without ignoring what the other person said.

Acknowledge their comment, but move the conversation forward before the euphoric pleasure gained from complaining takes hold of either of you.

6. Talk about solutions, not problems.

Sometimes, changing the subject isn’t an option if you want to deal with negative people, but that doesn’t mean you can’t still be positive.

I know that when someone begins dumping complaints on me, I have a hard time knowing exactly what to say. The key is to measure your responses as solution-based.

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You can do this by asking questions like, “Well, how could this be resolved?” or, “How do you think they feel about it?”

Use discernment to find an appropriate response that will help your friend manage their perspectives.

7. Leave them behind.

Sadly, there are times when we have to move on without these friends, especially if you have exhausted your best efforts toward building a positive relationship.

If this person is a family member, you can still have a functioning relationship with them, of course, but you may still have to limit the influence they have over your wellbeing.

That being said, what are some steps you’ve taken to deal with negative people? Let us know in the comments.

You may also want to read: How to Stop the Negative Spin of Thoughts, Emotions and Actions.

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