Writers at Money magazine asked the question: Which would you rather have ““ a bad case of the flu or a relative ask you for a large loan?
Not surprisingly, more than two thirds of the survey respondents answered they would rather suffer through the flu.
Lending money to relatives can turn into a real sticky situation, altering the dynamics of the relationship. As the Bible says, “The borrower is servant to the lender,” eluding to the subtle changes that occur when one person borrows from another.
Suddenly that Superbowl party turns awkward if you owe the host a few thousand dollars. The conversation at Thanksgiving dinner can become tense when you’re indebted to your obnoxious brother-in-law.
An old joke goes, “The best way to get rid of your in-laws is to lend them money.”
On the flip side, refusing to lend money can become uncomfortable as well. If you refuse to lend a relative money for fear of it turning into a difficult situation, then how do you decline lending them money without it becoming a sticky situation? It seems you can’t win.
And what do you do when you find the sister you lent money to sporting a new $400 Coach purse? Do you resist the temptation to ask why you haven’t got your money back?
Personally I treat all the money I loan as a gift not expecting to get paid back, but I’ve found the variety of people’s attitudes about the subject to be quite interesting. Some families actually charge interest on the money they lend to each other. Others emphatically say they don’t lend money to anyone.
And while relatives may have some sense of obligation to pay you back eventually, is the same true of friends? Is it easier or harder to lend to someone who doesn’t share your DNA? Should you create a legal document, a promissory note, or is doing so an insult?
BMWK, what do you think? Should you lend money to friends or relatives? How do you handle requests for a loan? Have you ever been burned lending money?
Every Monday you can find great insight and tips on managing your greenbacks by Dr. Charles Alonzo Peters of MochaMoney.com here on BlackandMarriedWithKids.com.