By: Ellan Dickieson, Family Service PEI
We have all been asked to lend money. It may have been $5, $500, or even $5000. Chances are, the person doing the asking viewed you as someone they could trust and turn to in a time of need.
Adult children, grandchildren or even friends may be coming to you to lend money. They might be purchasing a car, going to school or need a new appliance for their home. It might just be for weekly groceries, gas for the car, school supplies or to buy someone a gift. Helping others can make us feel good about ourselves and can be extremely rewarding, but if you are considering lending money you must always remember to put yourself first.
1) Do Your Research
If someone has approached you to lend them money, get as many details as possible. Regardless of the amount, the person should be able to provide you with the information that is necessary for you to consider a loan. Give yourself 24-48 hours to think about it. Some extra time will help you to gain confidence to form an answer. Be sure that you only lend what you can afford to live without and also consider the impact your lending decision will make on other family members or friends.
2) Don’t Be Afraid To Say No
If you have decided that now is not the best time for you to lend money, then you must stand your ground. Be firm and concise as you explain that you are not in a position to help out at this given time. People might assume that you have money to spare, but make it known that it acts as an emergency fund to protect you against unexpected expenses.
3) Help In Other Ways
With the life skills that you have, could lend a hand for someone in different way? Perhaps reviewing their finances or finding ways for them to earn extra income. Maybe you can provide them with services like babysitting, home cooked meals or drives to work. For an upcoming birthday or holiday, consider giving a cash gift this year.
4) Get Details When Saying Yes
If you do decide to lend a large sum of money, you should discuss all of the terms including: the amount being loaned, interest rate and repayment schedule. The key thing to remember is to write it all down! A personal loan agreement form can be helpful. Having it on paper will help avoid any confusion in the future.
In most cases, it is hard to say no but your financial stability is just as important as anyone else’s. Learn from the experience. Teach the person who has asked for a loan about self-sufficiency and independence. Both of you will feel better about your decision in the long-run through one another’s strength and support about financial matters.
For more information about lending and giving money visit: www.It’sYourRight.ca