6 Financial Principles to Loaning Money
If the bank loans someone money with horrible credit and the person does not pay back the money to the bank, then it's the banks fault for taking the risk. On a more personal note, you aren't helping someone if you are loaning him money and he has bad credit. You are setting him up to fail. If you want to help him, teach him to better manage the resources that he has. Two, it's always better to give a gift, with no strings attached, then to give or borrow money expecting something in return. Three, if you have work for them, let them earn the money. Four, don't let loaning money get in the way of a relationship. It's better to say "no," then for the relationship to become strained because he can't pay you back. Five, if you do trust the person borrowing money from you, have clear expectations for paying it back. Talk about what the person should do, in advance, if he can't pay it all back. Six, if a person does not pay you back, do not let them borrow more money in the future. Money can cause a lot of tension with family and friends & partners in businesses; manage those transactions wisely to maintain healthy relationships. Check out these statistics:
- 57% of people said they have seen a friendship or relationship ruined because one person didn't pay back the other
- Almost 50% have loaned $100 or more to help out someone, but 55% don't get repaid.
- 71% lend money to immediate family members, 57% to relatives, and 54% to friends. Dave Ramsey on lending money
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