It’s the call you dread. Mom, I can’t make rent again, can I have some money? Hey best friend, I have a great business idea and this time it will work out. Can you invest? Auntie and Uncle, why can’t you give us the down payment for a house?
It is unavoidable. At some point, friends and family will ask for money and when they do, how should you respond?
You Are Under No Obligation
First, realize that you are not obligated to lend money. A firm no (and no is a complete sentence, you don’t have to explain yourself) is fine to say. Be especially cautious if the lender uses emotional blackmail, saying things like, “you owe me because you were a bad parent.” Or, “You gave money to my sister, why not to me?” Be equally firm in your no if the loan is to enable gambling or other bad habits.
If you don’t want to lend money to your friend or family member for any reason, say no. If they insist, point them towards their local bank for a short-term loan, HELOC or credit card. If their credit is so unstable that they cannot borrow from traditional lending institutions, suggest Cashco, who specifically works with the underbanked or those with poor credit scores. Cashco is very upfront about their interest fees and has flexible programs to meet a variety of situations. Cashco also supports financial literacy in schools and through their own programming.
Never Lend More than You Can Lose
Tapping your retirement fund, cashing out your pension or draining…
