Whether to finance a startup business or simply to get your expenses caught up, you may come up with the “brilliant” idea of borrowing money from friends and family. Nonetheless this is probably one of the biggest mistakes that you can make. Yes, it is supposed to be that family and friends will lend a helping hand when one needs them, but when it comes to money, things may acquire a very different shape.
Understanding Family Love
Problem with money that comes from family always involves emotions. Love and affection are priceless, but mixing together love and money makes it hard to distinguish someone’s real appreciation. Many times you may expect someone who is close to you to lend you money and such person would love to do it, but he or she may not have the money you need. Then again emotions come into play creating conflicts and twisted stories in your mind, which are part of the human relations complex process.
Loans versus Love Money
Because of the feelings involved between you and family members or friends you are trying to borrowing money from, the loan that you receive is commonly called “love money” in the financial world. However, you must evaluate if shopping around for a loan could be a better idea than borrowing love money. Naturally, if you make a decision to apply for a loan first, avoid payday loans that may bring you more financial problems than those you are already having.
Do You Really Love Them?
The same way you may believe that your family or friends are more in love with their money when they refuse to lend you some, they may think that you are abusing them if you do not plan to repay such debt arguing or assuming they are family and should give you the money with no condition. Of course, they may not ask you to pay interests nor conditions that lending companies ask, just their money back. Thus, be honest and understand this is their hard-earned money and you need to repay it.
Playing Safe is The Best Solution
Money matters can really damage a family relationship, as it may end with a long-lasting friendship. So that, it is better to avoid borrowing money from friends and family even if they know you are in financial trouble and voluntarily want to help, in which case you must only accept if you are certain to repay this money promptly.
Posted by James Patrick on 12:31 am, With 0 Reads, Filed under Personal Finance. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.