When we face financial woes, we often turn to family and friends. After all, it’s easier than taking out a bank loan. Moreover, they already know you and trust you. However, mixing debt and personal relationships tends to get complicated. Here’s what you should do to keep relationships intact when borrowing money.
Be Honest
To avoid destroying relationships, honesty and transparency are a must. Explain why you need to borrow money, how much you need, and what your plans are to fix the situation and repay your debt. Being clear will help set expectations and prevent resentment or suspicion later.
Put Everything in Writing
When borrowing money from family and friends, it’s essential to put it in writing. A written agreement would be beneficial for both parties. In the agreement, outline the amount borrowed, interest if applicable, and repayment terms. A written agreement will help protect the relationship.
Set a Realistic Plan
Borrow what you can realistically afford and agree on a repayment schedule that would work for both sides. Do not overpromise and underdeliver because these will only erode trust.
Always Communicate
Things happen in life that can cause a delay in repayments. It’s important to always communicate and update your lender, especially if circumstances change. Staying silent will breed frustration, while honesty will keep goodwill intact.
Respect Boundaries
If friends and family are hesitating to lend money, then don’t pressure them. Everyone has different financial limits. Furthermore, not being able to lend money doesn’t mean they don’t care at all. It’s best to respect their decision to maintain the relationship.
