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These 10 Things Will Happen After You Lend Money To Friends

These 10 Things Will Happen After You Lend Money To Friends

If a friend comes to you for help, lending money seems like a sensible option at first. That’s especially true if it’s someone very close to you who you think would never let you down. But, even though there are some upsides to lending money, it’s hard to justify the risks. Here are ten things that will happen when you lend money to friends.

1. Your friend will appreciate you.

It’s always nice to feel appreciated and, especially at first, your friend will be grateful to you for lending the money to them. It gets trickier when it’s time for them to pay you back, but at first it can make your relationship stronger.

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2. You’ll feel good about yourself.

A selfless act like lending money to your friend is sure to give you some warm fuzzy feelings. It’s nice to be able to help out someone close to you, and the satisfaction of doing a good deed is often worth the sacrifice.

3. You don’t earn any interest on the loan.

Let’s consider reasons why lending money might not be good idea. One less-than-selfless reason is that whereas at a bank you accrue interest on your money, when lending money to a friend the value of it decreases over time due to inflation. That means even when you’re paid back in full you’re still in the red.

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4. You might want the money.

We all want nice things. Chances are, you’ll be able to buy less nice things after lending money to a friend. This is less than ideal, though hardly enough of a reason not to be lending money to someone. The reasons that follow, though, will make a much more convincing case.

5. You might need the money.

Fortunes can turn very easily. Yours might if something unexpected happens like a medical issue or the loss of a job. At that point, you might really need the money you loaned your friend in order to support yourself and your family. But, even if your friend is now in a better place financially than you are at that moment, there’s no guarantee that you’ll be you’ll get your money back when you need it.

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6. The due date tends to shift.

This is if you have a due date at all. If you ignore this advice and lend money, at least set a due date. But even if you do, the problem remains that your friend will feel less pressured to pay you back because of your prior relationship. That’s natural; your friend might not realize how big of a deal returning the money is to you. They feel like they’re waiting to do it when it’s convenient for them. Heads up: it will never be convenient for them to return a significant sum of money.

7. Your friend is more likely to ask for a loan again, or a loan from others.

A lot of the time lending money just encourages people to rely more on others than they did before. That’s not their fault; it’s very easy to becoming dependent on others instead of shouldering all the burden yourself. If your friend does fall into this all-too-easy bad habit, they might even ask you for another loan. If you don’t grant it, they’ll move on to others who might.

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8. It’s a hard subject to bring up.

It’s uncomfortable enough for a creditor to call someone up and request payments, it’s another thing entirely to broach the subject if someone close to you isn’t showing any inclination that they’re going to pay you back anytime soon. That money might create a wedge between the two of you. That’s why lending money leads to further problems than just a hit to your checking account.

9. It can ruin your relationship.

This is one of the most significant risks of lending money to friends. If your friend can’t pay you back or, especially, if they won’t pay you back, you’ll start to resent them. Even if you don’t think you will, you will. That resentfulness isn’t worth it when there are likely other ways you can have their back.

10. You can help your friend in other ways.

Lending money isn’t the only way to solve someone’s problem. In fact, throwing money at a problem can oftentimes (though not always) be the most shallow way to take care of it. To pull out an oft-quoted metaphor, don’t give your friend a fish. Teach them how to fish for themselves. With your professional and personal help they might be able to benefit in ways like landing a better job or developing healthier spending and saving habits. There are definitely some dire situations when lending money to friends is the best choice (such as if you’re in debt to a loan shark), but if lending money can be avoided, you should steer clear.

Featured photo credit: Money Wallet/401(K) 2012 via flickr.com

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Matt OKeefe

Freelance Writer, Marketer

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Published on October 8, 2018

13 Incredibly Useful Tactics to Help You to Stick to Your Family Budget

13 Incredibly Useful Tactics to Help You to Stick to Your Family Budget

Are you having trouble sticking to a family budget? You aren’t alone.

Budgeting is difficult. Creating one is hard enough, but actually sticking to it is a whole other issue. Things come up. Desires and cravings happen. And the next thing you know, budgets break.

So how can you stick to a family budget? Here are 13 tips to make it easier.

1. Choose a major category each month to attack

As the saying goes, “Rome wasn’t built in a day.” With that in mind, one approach to help you get into the habit of sticking to a budget is simply starting slow.

Spend too much on Starbucks runs, eat out too often, and have an out-of-this-world grocery bill? Choose one bad habit and attack.

By choosing one behavior to focus on, you’ll prevent yourself from being overwhelmed. You’ll also experience small victories, which help you gain positive momentum. This momentum can then carry over into your overall budget.

2. Only make major purchases in the morning

If you’re making large purchases in the evening, there’s a good chance you’re doing so after a long day and you’re probably tired.

Why does this matter? Because our judgement tends to be off when tired – our willpower is compromised.

Instead, only make major purchasing decisions in the morning when you’re energized and refreshed. Your brain will be firing on all cylinders and your resolve will be high. You’re less likely to give in and settle at this point.

3. Don’t go to the grocery store hungry

Have trouble with impulse buys at the grocery store? If so, there’s a good chance you’re going grocery shopping while hungry.

The problem here is that when you’re hungry, everything looks good. So you’re more likely to make split decisions on things that aren’t on your grocery list.

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Instead, make sure you eat prior to your grocery store trip. Then take your list, along with your full stomach, and go shopping. Notice how food doesn’t look quite so good when you’re not fighting cravings.

4. Read one-star reviews for products

Is there a product you just have to have (but maybe not really)? Check out the one-star reviews.

By reading all the horrible reviews, you may be able to basically trick yourself into deciding that the product isn’t worth your time and money.

Next thing you know, you didn’t make the purchase, you saved the money, and you feel good about the decision.

5. Never buy anything you put in an online shopping cart until the next day

If you are making a purchase online, it’s typically a two-step process. First, you click “Add to Cart” and then you go in to review your cart and pay.

The problem is that there not typically much reviewing during step two. It’s generally click pay and there you go. However, this is the perfect point to stop for reflection.

Once you add to your cart, your best bet is to step away until the next day. Let the item sit there and grow cold, so to speak.

This gives you a night to “sleep on it” and decide if you really want and need to spend that money. If you wake up the next day and still find the purchase viable, then perhaps it’s time to go for it.

6. Don’t save your credit card info on any site you shop on

One of the other pitfalls of shopping online is that fact that most sites ask you to save your credit card information.

While the sites will frame it as a method of convenience, the truth is they know you’ll spend more money in the long run if your credit card information is saved.

The “convenience” takes away one last decision-making point in the purchasing process. True, it’s a pain to get out your credit card and enter the information every time. But guess what? That’s the point. If that inconvenience helps you stay on budget, then it’s worth it. Which leads into the next tip.

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7. Tape an “impulse buy” reminder to your credit card

Credit cards make spending much easier than cash. When you spend cash, you can literally see your wallet emptying. A credit card comes out, then goes back in. No harm, no foul.

That’s why it’s a good idea to tape a reminder to your credit card. Customize a message that is something along the lines of “do you really need this?” or “does it fit the budget?”

That way when you pull out the card, you get one last reminder to help you question your decision and stick to your budget.

8. Only use gift cards to shop on Amazon

Amazon is probably the easiest place online to blow money. It’s just so easy to click and buy. However, one way you can slow the process down is buy only using gift cards. Here’s how it works.

If you plan on making a purchase on Amazon, go to the grocery store and purchase a pre-loaded Amazon gift card of the proper amount. There’s no convenience fee, so you literally pay for the money you’ll spend.

Now take that gift card home and load it to your Amazon account. There’s your money to spend.

Why does this help? It makes you have to purposely go to the score and purchase the card in order to purchase the item. That’s a pretty deliberate thing that takes some time, commitment, and thought.

This process will effectively kill the impulse buy.

9. Budget using cash and envelopes

As mentioned earlier, it’s a lot harder to spend cash than swipe a credit card. You can take this even farther by using only cash, and separating that cash by budget category.

Create an envelope for each category and stick the cash in there at the beginning of each month. When the envelope is empty, no more spending on that category, unless you borrow from another (be careful of that approach).

This can be pretty helpful for people that have a hard time following transactions in their checking account, or keeping a budgeting spreadsheet.

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The envelopes simplify the tracking process, leaving no room for error. Nothing hides from you because it’s tangible in the envelopes in front of you.

10. Join a like-minded group

Making the decision to stick to something like budgeting is difficult. It takes long-term commitment.

You’re going to feel weak sometimes. And sometimes you may fail. That said, support from others can help strengthen resolve.

Support can come from a spouse or a friend, but they won’t always have the exact same goal in mind. That’s why it’s a good idea to join a support group that’s likeminded.

No need to pay here, as there are tons of free communities that fit the bill online.

For example, reddit has multiple subreddits that deal with budgeting and frugal living. You can follow, subscribe, and get active in those communities.

This will open your eyes to new tips and strategies, keep your goal fresh on your mind, and help you realize there are others dealing with the same struggles and being successful.

11. Reward Yourself

When you set a budget, it’s usually with a large goal in mind. Maybe you want to be debt free, or perhaps you want to see $10,000 in your savings account.

Whatever the case, the end goal is great, but the end is often far away, making it hard to see the end of the tunnel.

With that in mind, it’s a good idea to set mini-goals along the way. This helps you still look at the big picture but have something that’s attainable in the short-term to help with momentum.

But don’t stop there – set rewards for yourself when you reach that small goal. Maybe it’s an extra meal out. Or a new pair of shoes.

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Whatever the case, this gives you something in the near future to look forward to, which can help with the fatigue that can result in pursuing long-term goals.

12. Take the Buddhist approach

You don’t have to be a Buddhist to recognize some of the wisdom in the teachings. One of the tenets of the philosophy involves accepting that we can’t have everything we want. And that’s okay.

Sometimes you won’t feel good. Sometimes you’ll have cravings. You can’t deny them. But you can recognize them, accept them, and let them pass by. Then you move on.

Apply this to the times you want to do things that will break your budget. You’re going to have the desire to eat out when you shouldn’t. You might want to stay out and spend too much at happy hour with your work friends.

The feelings will come. Recognize them, accept them, but let them go.

13. Set up automatic drafts to savings

If you wait until you’ve spent all your budgeted money to deposit money into savings, guess what? You probably aren’t going to put any money into savings.

It’s too easy to see that as extra money and end up using it to treat yourself.

Instead, set up automatic savings withdrawals. That way, the money is marked and gone before you can even think about it. It becomes a non-issue. It’s no longer “extra.” It’s just savings.

Conclusion

Sticking to a budget can be difficult. No one is denying that.

However, if you can do a few things to set yourself up for success, and put some practices in place to curb impulse buys, then you can (and will!) be successful sticking to your family budget.

Featured photo credit: rawpixel via unsplash.com

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