Should you lend money to a family member or friend?

Question Should you lend money to a family member or friend?

Answer No, give them the money.

Complete Answer  When you lend money to a family member or friend, you change the relationship with that person. You are now a lender and they become the debtor. Additionally, your and their values are involved, “What’s important to them may or may not be important to you” and vice versa. Remember that we tend to spend money on things that are important to us.

We all will, at some time in our lives, have a financial crisis and will need some help. When and if a family member or friend asks for help in the form of a loan, use this occasion to really help them. In education will call this a “teachable moment”.

Ask them “What happened?” Follow up their answer with “What will you change in the future so this does not happen again?” Then, if you can afford to, demonstrate the virtue of charity12 and give them the money they need with the condition that they will not ask you again.

Financial Literacy Knowledge/Skill

Be charitable for those in need.

Comments or Questions

Thank you for visiting the Financial Literacy Life Skill site. Please feel free to submit comments and/or questions you may have about managing your money (Financial Literacy).

Next week’s topic: Do you need insurance?

2 thoughts on “Should you lend money to a family member or friend?”

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    1. Karin
      Thank you for your comment on the financial literacy blog. Creating a web site is a bit daunting. You don’t or can’t know everything thing there is to know. I have found that after you have a general idea of what you want to accomplish, is to just start. You will work things out as you get deeper into your project. There are times you will find that your project is beyond what you are willing to undertake. That’s ok, life is a learning process. Give it a shot and see how it turns out.
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