Ruining a relationship is a very real possibility when mixing money with friendship. People are passionate about friends and cash and it’s often hard to separate the two.
Of course, I understand it’s not easy to turn down a friend or family member because the decision isn’t always about logic. So, if you do choose to be generous and help an important person in your life, make sure the amount is one that you would be comfortable loaning and possibly losing. If they ask for $1,000 and that is too much for you, simply tell them you could help them out with $500, or whatever fits your budget. If nothing fits, say so. It’s fine to say that you can’t afford to help right now.
Experts advise that when loaning money to friends, you should write down the loan amount and establish a written repayment schedule. This isn’t to reclaim the debt in a legal proceeding, but rather for both parties to establish expectations and ensure recollections are accurate.
If you’re unable to help monetarily, you can still help in other ways. Borrowing money from friends is often a last resort, a temporary fix, or a call for help in other ways. Consider helping your friend with their job search, babysitting their kids, working through their budget, or loaning them clothes for a job interview.
Most importantly, understand the situation probably won’t be resolved overnight. Now that you know your friend is on a strict budget, be sensitive to what you do together. Skip the theater for a movie at home or meet for a walk in the park to catch up. Find something that requires your time and effort to show your support; in addition to or instead of your money.
Money can strain friendship. However, supporting your family and friends when they need it can lead to a support network that will last a lifetime.