Let me start with a word of caution: never lend someone money you are not willing to lose.
Before you lend someone money, be certain in your heart that you will not die or lose much if they don’t pay back. You should not even lose that person’s friendship if they fail to repay the money you lent them.
If you feel the person might fail to pay you and this will not affect your relationship with them, then lend them money. If their failure to pay would make you hate this person’s entire clan, please advise the person to go to the bank.
If you still wish to lend but don’t want don’t want to be affected much if they don’t pay back, you should consider the “maximum I can lose” strategy. Here, instead of giving the borrower all the $1000 they requested, you give them a percentage of it that you don’t mind losing (eg. $100) and tell them you couldn’t get them all the money they requested but that is the amount you could give, and they are free to return it whenever they can.
This trick above helps you offer enough to keep both your relationship and sense of help to the other person. Plus, even if they don’t pay back, you still don’t lose much.
What do you think about lending money to friends and family? Share your thoughts below.
There are other MONEY MISTAKES you could check out as well.