Friday, April 22, 2022

Should you lend people money or not?

 

01

At the beginning of this year, my friend Chris and his wife had been quarrelling over this issue of lending money. Chris had agreed to lend money to his relative in order to have a wedding banquet.

Chris is straightforward guy and is honest with others. But in the eyes of his wife, Chris is too nice and she is worried that he is being deceived by others.

1. Chris’ relative borrowed 15k on the grounds of decorating the house end of last year and I heard that his relative have not repaid him the full sum yet.

2. When Chris bought a house, he wanted to borrow money from these relatives at the beginning, but he was rejected straight in the face, and this time his relative wanted to borrow money which Chris agreed to lend.

 

02

In my humble opinion, to borrow or lend money, in addition to the emotional considerations, we should also rationally examine the three borrowing principles:

1. Borrowing money, liken to investing, requires background checks

From Chris’ experience, he cannot bear to reject others, so he has to suffer himself.

To lend someone money, you must first know the ‘credit score ‘of the other party. If you are close enough with the potential borrower, you will definitely know the lifestyle, character and the purpose of borrowing money; you will probably know whether you can lend or not. Remember: the money is yours, not others! There is nothing wrong with not lending! So don't feel bad about not lending. If you need to refuse, you must refuse.

If you refuse to lend him money, you may lose this friendship; but if you lend him money, you may lose the friendship + money.

No matter what, the "friend" who always thinks about borrowing money from you is no longer a real friend, so it's even more understandable not to lend.

2. Agree on terms and abide to them

Borrowing money from anyone will incur interests. If the borrower can initiate the interest rate based on the borrowed sum that will reduce the awkwardness between them next time.

3. The bottom line of borrowing money

No matter what is the reason for borrowing money, it is nothing more than to win the understanding and sympathy of the borrower. If the borrower is ill or has no income for a period of time and other reasonable reasons, can consider his character and lend some money appropriately.

We can abide by the principle of "saving the emergency, not the poor".

What is the secret of maintaining friendship between friends? Don't lend money! Don't try to borrow money, and don't agree to borrow money easily.

Instead of owing favours to borrow money, it is better to learn how to plan and manage money. It is better to get a bank loan if it is possible.

 Read also:

"Money" is the best gauge to judge a person

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