Do People Constantly Ask For Money?
(FinancialHealth.net) â Your friend is laid off from a job they expected to work for the rest of their lives. Your adult child needs urgent dental work they canât afford. A neighborâs dog is struck by a vehicle and needs urgent surgery. Your niece needs $10,000 to buy her first home. No matter who is asking, or what theyâre asking for, itâs easy to feel awkward and put on the spot.
Sound familiar? Thatâs because nearly all of us have been asked for money by someone we love at least once in the past. But talking about it, or working up the gumption to say no, isnât always easy. Our culture simultaneously makes it taboo to talk frankly about money while also obligating us to help others around us.
In the right situation, lending money can truly help someone survive and even thrive. But itâs just as likely to enable reliance and bad financial habits. So, the next time youâre considering whether to say yes, keep these important points in mind.
Can You Afford It?
This should be your number one consideration. If lending money will put you in a financial bind, donât do it â full stop. You canât help anyone out if you end up bankrupt in the process, and you just might even find yourself in the other personâs shoes.
As for how much you can afford, thatâs a bit of a tougher question to answer without knowing your unique financial picture. Saying yes, however, shouldnât put you into a situation where you struggle to pay your own bills or have to significantly change your normal lifestyle.
Is It a Want or a Need?
Is the person asking you for money in needâ¦ or in want?
Thereâs a big difference between an adult child who wants a loan for a brand-new TV and a dear friend who needs money for a life-saving surgery. One is necessary for the personâs survival, while the other is a simple want they could save up for with good financial habits.
One of the âgolden rulesâ of good financial management is that you should never borrow money for wants if you can save up or pay it off on your own. This is just as true for credit cards and bank loans as it is for borrowing from other people. By constantly saying yes to loans for wants, you enable the other individual to keep spending money they already donât have.
And it might even mean you canât lend to someone who really needs it later on.
Are They Willing to Talk Frankly About It?
Beware the borrower who shies away from frank discussions about finances. If someone asks you for money, they should be able to justify why they need it, how they plan to use it, and (if you lend) how they plan to pay it back. Furthermore, they should be open to facing their own financial mistakes, if they apply.
Someone who âjust needs moneyâ or seems to get angry when you question their level of need is sending out major red flags. Theyâre also telling you that they donât appreciate you enough to be willing to hear you out and/or fix their finances so they can avoid borrowing in the future.
Can You Afford to Gift It?
Lending money to family and friends can inspire serious resentment and even total relationship breakdown, especially if they canât or wonât pay it back. Itâs almost universally better to give the money away rather than requiring them to pay it back. Think of it like contributing to a good causeâ¦ but be sure it really IS a good cause before you say yes.
Gifting also tends to be a better option for people who are struggling to claw their way out of debt because it isnât yet another bill they need to pay. Still, be mindful of the fact that too many âgiftsâ will often lead to over-reliance on your generosity.
Hereâs one last thing to consider: if you feel anxious about whether youâll get your money back, think of it like a red flag. It might mean you really canât afford to give at the moment after all, or that your instincts are telling you itâs not the right time to say yes. Sometimes, declining to help is the most supportive, loving thing you can do for everyone involved.
~Hereâs to Your Financial Health!
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