Sometimes we see friends or family members that are struggling for money and we feel that we would like to lend them some money. Or they may even approach and ask to borrow some money from us. Even if it is something that we can afford, it can be awkward because it can cause problems. It may seem that lending money would be a good thing to do, but it may not be.
If you are approached then you may not want to lend money and it is worth thinking hard before you do. Obviously it may cause offence if you refuse but you need to fully consider the consequences of what you are doing and whether lending is actually the kindest thing to do for them. You do not want to cause problems in your relationship with them and lending them money could easily cause this for a number of reasons.
Firstly it could cause problems with other family members or friends. They may expect you to do the same for them and there may be jealousy. Obviously you can do your best to keep it secret, but these sorts of things do have a habit of getting out and it could cause problems. Imagine if another person asked you to lend some money and at that time you did not have the money, this could cause jealousy and you may find that your relationship suffers as a result of it. There may also be a misunderstanding and they may think you have given them the money and they may wonder why they did not get a share.
There may also be problems if they struggle to pay you back. Even if you have an agreement as to how often you will make repayments and how much they will be, there may be problems. It may be that repayments cannot be afforded one month or that the lender suddenly needs some extra money and could do with a higher repayment that month. Both parties could feel guilty and worried and if they talk about the situation and cannot resolve it, it could even cause arguments. This could cause problems between the two and could damage their relationship. The rift could possibly even be permanent and that would not be good if you want to remain close to the people involved.
Once you lend once, there will be an expectation that you will always be able to do it. This could mean that you will be asked a lot and it can put a lot of pressure on you. You may feel obliged to keep doing it and you could even find that you will not have enough money for yourself. It could be very difficult to know when to refuse or to be able to actually do so. If you do say no, they may think badly of you and you are likely to feel guilty, particularly as you managed to do it before. However if you turn them down, but offer to help them in another way, it could be better for both of you.
It can be better for those asking, if you do not lend them money. If you keep letting them have money when they need it, they will not learn to manage on what they have. They will keep spending knowing that they have someone to fall back on that will lend them money if they need extra. Rather than learning how to budget they will just learn how to ask to borrow money. It can be far better to sit down with them and teach them how to be sensible with their money and to make sure that they have enough left so that they do not have to ask to borrow money all of the time. They may not like the idea and may not take you up on your suggestion, but it is unlikely to have such a big impact on your relationship as lending the money could do. Obviously this will depend on the people involved, but it is more likely that if you start lending money, it will cause more problems than it solved.
It may be hard to think that not lending to someone who needs it could be good for them. You may feel that it is cruel and that you should help them, but helping them to not spend so much and to manage their money better can be far more valuable for them. You will also not risk having problems with your relationship because they can’t repay you or your need the money back more quickly than they can afford to repay it. It is never worth falling out with someone over money and lending money to them is probably the biggest cause of falling out, so do not do it.