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Money Matters

5 questions to ask yourself before lending

By Destiny Published 4 years ago 5 min read
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Money Matters
Photo by Alexander Mils on Unsplash

Alright, let's face it; we all have that person in our life who needs "just a little bit." Whether it's every other week, each month, or a one-time loan, you might be feeling nervous about lending your money. It's a hard time for everyone right now financially, and its human nature to want to support others in need. However, it's worth taking a breath and asking yourself some easy questions to determine if it's a good idea.

Now full disclosure, I'm not a financial advisor, but I have gone through this experience with several types of scenarios and people. I've learned through experience to ask myself these questions, and I think they will help you as well.

1. Can you financially bear it? There is no shame in being honest with yourself and your friend/family member/coworker etc. If you can not afford to give the extra assistance, do not do it. If the person cares about you, they will understand. Not just because they are struggling themselves, but because they wouldn't want you to put yourself at risk or in debt to help them.

Don't despair! If you can't afford to help financially, there are other ways to support them. Raid the pantry for extra food. Invite them for dinner, or bring them some left-overs. Food is a massive expense these days, not just purchasing it, but the time it takes to make it. It can help reduce their costs and give them time to work extra hours or job search. The same goes for babysitting or perhaps help to get from point A to point B. Being there for the people you love is not a one size fits all solution. At the end of the day, you're not going to be able to help if you get yourself stuck too.

2. Do you expect the money back? I've learned that there are some people who just don't manage their finances very well, or they keep getting walloped by life. For these friends/family, I never expect the money back. I think of it as a gift or an advancement on Birthday/Christmas etc. Then I'm never frustrated by not seeing it returned. Also, people don't like to admit it, but money can cause resentment or feelings of power dynamics in a relationship. If you think you are starting to feel taken advantage of or angry that they are asking for cash, it's probably because you expected something in return.

3. Is this helping them? Here's a tough one, it really is. The gut-wrenching truth of it is that they may need the money for less than savory means. Or they may have gotten used to receiving the extra help and haven't learned how to budget or manage their finances. As stated above, there are other ways to provide support rather than financially. It can be scary to withhold financial assistance from someone you love, especially if you suspect they might be addicted to something. However, change can not happen without these crucial steps of facing the underlying issue. Growth is hardly ever pleasant, but it's usually worth it.

4. Are you lending them money for the right personal reasons? Consider saying no to them. What will happen? How do you think they will react? Are you afraid that withholding financial assistance will ruin the relationship? If this is the case, I strongly urge you to take a serious look at this relationship and see if it's one-sided. Remember, someone who truly cares for you is NOT going to care about what you can do for them – but who you are.

5. Have you considered a budget for them? Ok. So, you're financially able to help, and you're doing it for good reasons, fantastic. Consider making a budget for them in your mind for a couple of reasons. The first is because a little bit every couple of weeks can add up. For example, 25.00 for four weeks is 100.00. If you have someone that asks repetitively for assistance, it can be an excellent place to set limits. You can say, "Hey, I've already lent you 100.00 this month, and that's the max that I can do right now." Chances are they will probably be surprised by how much aid you have already given. The second reason you may want a mental budget is that people rarely ask for the actual amount they need. They usually ask for the bare minimum to get by. People instinctively want to maximize the chance you'll say yes, but it can also be embarrassing to ask for help. They may be ashamed that they are asking you to put more strain on your life to help them, and they are trying to make that as little as possible. If you want to help financially, think about lending a small amount higher than what they are requesting, if it is within your mental and actual budget.

There you have it. Some simple questions to ask yourself before lending money. Times are hard right now, and they may be getting worse in the future. It's a good idea to take stock of your own boat before pulling up floorboards to make another's raft. If you take nothing else away from this article, please let it be that you can help others in so many ways, not just through money, and you are worth more than just what you can do for others.

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About the Creator

Destiny

Hi!

I'm a Self Starter who is looking to make some career changes! I've decided to be not just a kick-apples PR pro but a Writer of Myth, Legend, Advice and maybe some Yarn reviews. OMG do I LOVE Yarn.

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