In this episode, we’ll be talking through the situation of close friends or family asking for money.
Here’s the common story I hear in January: we’re unsure of our financial future and would love to get out of this debt. It keeps sneaking up on us. I lent money to my brother last month, so hopefully, when he pays me back I’ll get all caught up on my car payment and my credit score will be good enough to refinance this debt into a lower interest personal loan.
Did I nail it? I’ve heard that literally hundreds of times.
And I get it, too, but you all are making this much more complicated than it needs to be. Personal finances isn’t some test that you need a study guide for.
There’s no formula to memorize or hard vocabulary to learn. You’re making this too complicated for yourselves. Simply. Keep it simple and you’ll go far.
Anyway, that person who counted on their brother or friend to pay them back ends up disappointed, sometimes for months, sometimes forever. It builds resentment and distance.
It forever changes the relationship. One person feels taken advantage of. The borrower isn’t allowed to grow. The lender doesn’t understand why the borrower isn’t paying him or her back. It’s because they didn’t feel the pain of their decisions. And then you’re in this mess.
Now, let me be clear. I’m not saying NEVER to give money. But I am saying that lending money should be done wisely and with specific parameters and communicated expectations on both sides. Basically, you need an agreement.
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