What To Do When Someone Wants To Borrow Money

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deciding on whether to loan moneyJust about everyone has that friend or family member who is constantly borrowing money from people. They move from person-to-person every month, seeking some poor soul who has money to burn, never quite able to pay back the loan that they took from another friend six months ago. When someone wants to borrow money, you have a serious decision to make. Although we always want to help the people we love, borrowing money is often the beginning of a downward spiral.

When Someone Wants to Borrow Money: What is the Loan For?
One of my major life policies is that I will never lend money to someone when I don’t know the purpose. A quick, “Hey, can I borrow $500?” just doesn’t get it done for me. If you don’t know the reason for the loan, then you have no way of knowing when you might get it back. Further, you might be funding something that you simply wouldn’t agree with. While I do believe that we have no right to tell someone else how to live their life, I also believe that I have the right to know where my money is going. I work hard for every cent I earn, and I don’t treat it lightly.

When Someone Wants to Borrow Money: Has This Happened Before?
At some point, you have to learn how to say, “no”, especially if the loans you dish out are never repaid. I understand that some people have it rough and that others simply aren’t good at managing their money. However, I also know that we live in the real world when we have to take control of our lives. When someone wants to borrow money, consider how many times you’ve made a similar loan. Is this a pattern that you don’t want to take party in any longer?

When Someone Wants to Borrow Money: Are You Enabling?
Some people simply don’t manage their money because they believe there will always be someone upon whom to rely. Are you one of those people? Paying Cousin Timmy’s car note every month is enabling the behavior of not budgeting for it himself. The same goes for funding Aunt Mary’s gambling habit and continuing to pay of your friend’s student loans. I only lend money to people who show an avid desire to get their life back on track. When I was young and stupid, people helped me out, but then I got wise. I realized I didn’t want to be indebted to people all my life, and that I needed to learn how to live frugally.

When Someone Wants to Borrow Money: Whose Fault Is It?
There are two types of people who borrow money. The first is the person who is always borrowing money and can’t seem to save anything from one week to the next. He or she continues to buy things out of the budget and relies on family and friends to pick up the slack. The second is the person whose financial situation is a result of something beyond his or her control. An accident that prevents him or her from working, for example. Or someone who has just been laid off. In the first case, I never recommend loaning money because you’re encouraging negative behavior. In the case of the second person, however, I will always loan (or give) money wherever I can. There’s a difference.

When Someone Wants to Borrow Money: Can You Afford It?
And finally, the last question you need to ask yourself is: Can I afford it? If you’ve been having some trouble with money lately and are facing a few unexpected bills, then maybe you just don’t have the money to loan. Never put yourself in a compromising situation where you might not have enough money to get yourself through. It is okay to say, “I’m sorry, but I just don’t have it.” Your financial situation comes first, so don’t be afraid to say “no” if necessary.

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