Lending and Borrowing Money from Family and Friends

“Never a borrower nor a lender be.”  We’ll discuss the pitfalls of loaning or borrowing from family and friends. You know the old saying, only loan someone money if you can afford to lose it.  It’s easier said than done.  Money is already a fraught issue, throw family ties into the mix and it can become down right volatile. Sometimes you lend money to someone out of sheer awkwardness.  It’s so surprising to be asked and so uncomfortable that sometimes we just agree to alleviate the tension. Then kick our selves immediately after. It doesn’t even necessarily matter if you’re mad about losing the money.  Maybe it was negligible  amount or maybe it was a lot but you had it to lose.  The borrower who doesn’t pay it back might feel so awkward or so guilty that they avoid you.  You aren’t mad and don’t want the money back, but the relationship is lost anyway. A loan doesn’t always mean money.  Has someone ever asked you to co-sign something with them?  It’s a slyer way of getting a loan from you than out right asking for money.  If the borrower is not responsible, it’s your credit that gets tanked. Sometimes this works out.  Usually it doesn’t.  There is almost always a solution through a third party that does not involve you.  Help them sell their stuff on eBay, steer them towards Lending Club.  Is there a job you could hire them to do, mow your grass, watch your kids (well, maybe don’t offer your junkie friends the babysitting opportunity)?  Coming to a friend or family member for a loan should be the last resort. Do you have any loan horror stories?  Share in the comments. Show Notes Long Trail Imperial Pumpkin:  September is here and that means pumpkin beer. Betterment:  Start investing the easy way. LMM’s Tool Box:  All the resources you need to manage your money. Learn more about your ad choices. Visit megaphone.fm/adchoices