There is a golden rule, explaining how to give money in debt. Lend exactly as much as you are willing to give. Of course, this amount will be different for each person around you. But knowing that it might not come back can save you a lot of stress, and it can make you feel good about giving it back, almost like a gift.
Don’t lend large sums. If you lent a small amount of money, you will not feel bad about the loss of the amount, and in addition it will be a good test for the person who asked you for money. If he can’t pay back even a small amount, it means he’s in over his head. Be brave enough to say no if the person does not feel uncomfortable and comes back to you with a second request without having paid back what he has already borrowed. Don’t be embarrassed; remind the person that you already owe them money and ask them not to further aggravate the relationship.
What do you do if someone close to you asks for money and you’re afraid of offending them by refusing? First of all, remember that you should not be driven by feelings of pity. There are times when people violate other people’s boundaries without realising that their requests are unreasonable. It’s up to you to regulate those boundaries. You and only you are able to calculate your budget, planned expenditures and assess the reason that prompts a person to ask for help.
Worried that you will ruin a friendship? But very often it is the refusal to lend money that saves a friendship. There are numerous examples of best friends who have become bitter enemies over financial differences. If a friend asks for money for a new phone that costs more than his salary, it is better to explain to him the meaning of the expression “live within your means”. Make your friend aware that purchasing the phone will force him or her to forego entertainment, going out to restaurants, shopping and travelling. Otherwise he won’t be able to pay you back. Think about it: if you lend your friend money, you are becoming a creditor. And it often happens that a friend, realizing that the relationship can’t be maintained, decides to break it off. You are the most hurtful person in this situation: you lose both your friend and your money.
If it’s a large sum of money, going to the bank rather than your friends and acquaintances is the most civilised way of dealing with financial matters. Refer those asking for money to the right place. The market for credit services is now crowded. Many banks are willing to lend money on a variety of terms.
It’s definitely not a good idea to lend money if it would put you in a difficult financial situation. Think about your own situation first so that you don’t become a victim of circumstances. Do not lend money if you know or suspect that the person has already borrowed money from others. In that case, the chances of getting back what you have gained by honest work are very low.
The situation with friends is ambiguous. Far from always close people pay debts in the first place, if at all, believing that the person simply must step in or simply forgive the debt – as a friend or relative. Therefore, before lending, find out what your friend or family member is asking for money for. If it is a matter of life, health or death, or some important force majeure, you will probably be happy to help yourself. In all other cases, be guided by how you feel rather than the potential reaction to your refusal. Think about it, if you are a creditor to your friend first and only then everything else, is there real friendship and intimacy between you?