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Should You Lend Money to Family, Friends? Read This First

We’re headlong into what’s looking like a very tough time for millions of our fellow-Americans. Here were are stuck at home, 10 million people without jobs—many of them waiting breathlessly for promised stimulus and or unemployment checks. And you just got a call from your child, grandchild, best friend—perhaps an ex-employee, c-worker, neighbor, or other friend or relative. They need to borrow money.

Over the years, I’ve heard from dozens of readers who have lent money to friends and family members, only to have become outraged when the deal goes sour. The problem is they write to me after they’ve made the loan. By now, they’ve been waiting months, even years, for repayment, without success, hoping I can wave a magic wand to get their money back.

Here’s what I know: If you are able to help, you need to know how to do this in the best way possible. I know you … of course, you want to help. In fact, you’re ready to do anything you can. But this needs to be good for both you and the borrower and by “good” I mean that you will be repaid.

Maybe you’re the one about to make that phone call, asking to borrow money. Read today’s post first—then make your request with a plan in mind, based on what you’ve learned.

There are a few simple steps that if you take them, will make all the difference in protecting your relationship with the borrower (or lender!), help the borrower retain his or her dignity and in the end be good for both of you!

Have you made a loan to a friend or family member in the past? How did that turn out? If you’re willing, we’d love for you to share about that in the comments at the end of the post.

See you there! Love, xo, m