When a friend or loved one approaches us with a financial need our first response is often compassion and sympathy. We want to help and we often don’t need much convincing to reach a point where we are willing to give in to their request. However, once you loan money to a friend or relative the result is often a strained or destroyed relationship. These matters can be difficult to manage and often end in disaster. During this Twenty One Day LuxuriousCREDIT Challenge, do everything in your power to avoid handing out any loans or financial favors for anyone.
It can be difficult saying “No” to a loved one, especially when they claim to be in need. Always use good judgement, but remember it is not your responsibility to handle the affairs of other adults. While they may have grown accustomed to relying on your good graces and favors, they should not depend on you for regular financial support without prior consent from you.
We are not asking or recommending that you abstain from or avoid supporting loved ones whom you have previously committed to helping. This cost, no doubt, has already been calculated into your budget. For the next twenty one days we are suggesting that you refrain from obliging the spontaneous, impromptu, unexpected requests for financial assistance that will inevitably impact your financial circumstance and potentially your credit. While you love your friends and family dearly, there are times when help becomes a hinderance. This may or may not be your current situation. That determination should be carefully considered and made by you personally.
However, when the time does come to deny a request for a loan or financial favor here are a few tips to ease the pain:
- Personal Policy
Establish your own personal policy as it pertains to lending money to friends and family. If you decide that you would rather never lend to loved ones and you make this your rule, you may find it easier to say no. You may find that you don’t even have to explain your personal policy. Rather, friends and family will simply begin to notice that you “never” lend to them and will respect and accept this as your personal boundary.
- No Explanation Needed
You are an adult. You don’t owe anyone an explanation about how you choose to handle your personal finances. Avoid going into details about your financial situation and why or why not. Keep your reply simple, short, and sweet. For example:
“I’m sorry, but I’m just not able right now.”
“Unfortunately, I can’t.”
“That isn’t feasible for me.”
- Stall Until You Feel Secure
You are fully entitled to say “No”. If a family member or friend is layering on the guilt and pressuring you for a loan or financial assistance it is perfectly reasonable to ask for time to decide. Once you’re out of the immediate situation, you will likely be able to think more clearly and therefore make a more sound decision. Saying no over the phone or via email may also feel less confrontational. Additionally, often when people need to borrow money the need is urgent. By buying yourself some time, you entertain the prospect that your loved one may have found another resolution by the time you reconnect with them.
- Offer Alternative Assistance
Rather than taking on the pressure and strain of someone else’s financial crunch, offer to help them in other ways. If you are reading this article you are probably on the road to or in pursuit of LuxuriousCREDIT which speaks to your own financial responsibility and competency. Offer to coach or assist your friend or family member organize and structure their finances to position themselves for success also.
However you chose to handle the request be confident that you have the right to say “No”. It’s your money, your budget, your finances, and your credit! No matter how compelling and heart wrenching a loved one’s sob story may be try not to go into detail about your own personal finances. This information is private and you have every right to protect it.