There’s a reason why people say you shouldn’t loan money out to your friends and family. Problems seem to arise from these situations all the time. You may ask them to pay you interest, they may get offended. They may pay you back late, you complain, they call you a whiner. They may not pay you back at all and just do favors for you, you still want your money back. There are countless things that can go wrong so it’s best to never lend money to friends or relatives.
Not loaning money to your loved ones seems callous though. They are in financial trouble and need your help. Isn’t that what friends and family is for? To lend a helping hand? Well yes, but there are more ways to help them than with giving them money. If they have a spending problem or are in serious debt, your money is just going to go down the drain. If they do not permanently change their spending habits and adopt a frugal lifestyle then they will undoubtedly need money again and again.
There are alternative ways of helping a loved one in need of money. Here are a few examples of what you can do.
- Carpool with them to and from work. Drop them off on your way to work and back from work. They’ll save on the gas money.
- Offer to babysit. They won’t have to pay for a babysitter or daycare while they get a second job or work extra hours.
- Educate them. Give them tips on how to be frugal. Teach them how to create a budget. Show them ways they can save money.