It’s nothing strange. A sibling, friend, your child come up and ask to borrow something: objects, or money. Or maybe you are that sibling, friend or child who needed help and turned to someone you cared for to ask.
It's a common occurrence: and,as long as everyone is in agreement, as long as
the whole thing is managed in a somewhat professional way, and as long as the money/item is returned in time, it is something that can even be considered healthy.
I am writing about this because ever since I have been answering question on Quora for OAS FCU, the subject of people asking about borrowing and lending among friends and loved ones has come up about a dozen times. It’s clearly a topic on which people want guidance or reassurances.
So here are some ideas about lending and borrowing with people close to you without -hopefully- turning it into a drama that costs you the friendship or familial good terms.
When “anytime” becomes all the time
Has someone ever borrowed something -your car, your hair dryer- and you said “no problem, any time” and now you wish you could take it back?
The solution in these cases is to set limits. If things have got out of hand, you have the right to tell the borrower how you’re feeling; admitting that you understand you did say it was OK
any time, but that you realize that it is happening often, and you need to be able to use your things too when you need them is perfectly acceptable. Agree how often they can borrow whatever it is, and when they have to return it; you will be allowing that person to continue using it, allowing you to have the regular needed use of your stuff without feeling abused.
Lending a hand, a different way
If you always lend the same object -your phone, an appliance- consider giving that person a replacement of their own of this item for their next birthday or festive occasion. If it has a larger price tag, since you can’t buy that, maybe you can do a collection among all his/her friends and relatives to get her that item, or at least to help purchase one?
Asking for money all the time
That friend who never makes it to the end of the month and always asks you for help; she always pays you back, without question, but that she keeps asking is making you feel out of sorts.
It’s a sticky situation; how to stop it without losing your friend? It’s never good to wait until they ask you again to bring it up, because at that point they are expecting you to help, as
always. Most likely is that he/she will be hurt, becomes defensive and you might even argue.
Instead, the best time is in between loans, before he/she asks again. Explaining that your friendship is important, and you feel that borrowing your money all the time is affecting it will help pave the way for helping the person find a solution that works for both of you. Maybe you noticed that they borrow money when something specific happens (the end of the month, he/she went on a shopping spree, whatever); it would be an idea to suggest asking their credit union/bank for a small loan, just what they feel they’re short at the end of the month, so that they can catch up and get started on a clean balance sheet while making small payments in a way they can afford.
When it’s a large sum of money, or long term: in writing
If you need to borrow a large sum or money for a long period of time, the best way to avoid awkwardness is doing three things: putting it in writing, paying it on time, and giving back a little more than you borrowed.
If someone is asking you to borrow money, the same rules apply; you don’t need to ask for interest unless you want to, but I would definitely recommend that you set out to make it a proper business transaction to show you’re serious about getting your money back, and within a specific time frame. If you doubt that your friend/relative will be able to pay you back
a lump sum, say so and ask for periodic payments while you wait for the final payment, or specific regular payments from beginning to end.
Be prepared to say (and hear) no for an answer
In the end, the worst that can happen is saying or hearing no.
Personally, I’ve lent out money to both friends and relatives, and I have said no at times. I draw my internal lines by evaluating if there is a chance I will not get my money back, and whether not getting it back is going to affect our relationship negatively.
If you worry that you won’t get your money back, or you know that you will get angry if they don’t pay you back, explain that you don’t want to damage your friendship/relationship because it’s important to you and you would rather not have money matters mess it up.
If you asked to borrow the money and got a no, don’t be offended. It isn’t easy asking, but it isn’t easy saying no, either. Don’t hold it against the person. Maybe it’s the time, like I mentioned before, to go to your credit union or bank and ask for a small loan. However: please never, ever consider a payday loan. In this article I explained why those loans are the worst possible idea.
Borrowing and lending is normal. If it’s never happened to you, think of how you’d like to handle it when the day comes; it’ll help you protect your friendships and family relations.
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