When a storm is coming, all other birds seek shelter. The eagle alone avoids the storm by flying above it. So, in the storms of life may your heart be like an eagle’s and soar above.” – Author Unknown

About Loaning Money…


loaning money

Before you consider loaning money to someone you know, read this.

loaning money to family and friends hurts relationships

Have you ever considered loaning money to someone you know? Not $15 to buy some lunch, but the hundreds or thousands of dollars someone wants to borrow.

If so, did it work out for you?

Did your borrower ever pay you back?  Or are you still waiting for that money to somehow return to you, hopefully with a small amount of interest?

When people you know ask you for a personal loan, always remember loaning money can create more problems than it solves.

Trust me, I speak from experience.

Why do we loan money to people who have no money to pay us back?

When someone needs help, pitching in to help just feels good, like the right thing to do.  Why?  For several reasons.

  • Wanting to help others.

It is natural to want to help a person you know when they are in need and you can help.  It makes you feel good to help them.

  • Feeling guilty about saying no.

If you say no, your no will weigh down your conscience.

  • Maintaining the relationship.

Not helping will cause tension in the relationship because you were not willing to help someone in his or her time of need.

All of these reasons show that you want the best for the person and the relationship.  But more often than not the borrower does not repay you and this causes tension within your household, with your loved ones.  Your loved ones do not understand why you loaned money to someone you had reason to believe would not pay you back. Also, when the borrow does not repay you, there is tension between you and your borrower.

Loaning money changes relationships.

Lending money to friends and family rarely works out because it changes the dynamic of the relationship.  The relationship changes from a relationship between family and peers to a relationship between creditor and debtor.  This new relationship becomes very tense when the debtor does not repay you.

That kind of tension is not good for the entire family or group of peers.  It breeds resentment.

So how do you handle the situation when someone close to you asks you to borrow money?  The best answer is “no”.

Instead of loaning money, try these steps.

  • Offer to give the person in need as much as you can afford to give. But if you know the person has been irresponsible in some way and you suspect he will not use the money wisely, this may not be a good idea.
  • Give advice. If you know of a good solution to the money problem without digging the person’s debt deeper, help them work through the situation and plan to come out better on the other side.
  • Refer them to peer to peer lending sites. If the person still insists on borrowing money to resolve an issue, there are a few websites (www.prosper.com, and www.lendingclub.com)  where a person can borrow money from groups of people who contribute to fund a loan.  Then the person just has to pay the lender group back just like paying a bank back.

A peer to peer lending site is like a bank where thousands of people lend money to thousands of borrowers.  Prosper and Lending Club are the middle men who process the payments and make the loan legal.

***

While there are plenty of emotional arguments for wanting to lend money, there are just as many ways you can help someone without putting tension on or destroying a meaningful relationship.

Soar like an eagle over life’s storms.  Resist the urge to loan money to someone you know. Remember that relationships are the highest priority, and loaning money does usually not help relationships.

I dream of peace in the US and the world…

It is just a three letter word, but it means a lot!

Achieve financial success with your current income!

Do you know who started the Secret Santa tradition?

Get the emergency cash you need without borrowing!

What is the best thing to do when someone betrays you?

If you struggle with procrastination like most people do, please read this.

If you enjoyed this post, remember that BJ writes for children and her book Near a River is available on Amazon.com and Barnesandnoble.com.

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"Each reader's heart is like an eagle's and can soar above the storms in life..." - Near a River's Author, BJ Rae.

Written with uplifting words of encouragement, Near a River is a photographic children's book about two young bald eagles who are eager for their mother to teach them to fly so they may soar over the storms in their lives. Near a River encourages early childhood reading. BJ hopes that every child becomes a strong reader and soars above the storms in life.

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