When you are experiencing a personal financial crisis and do not have the means to help yourself, you may consider turning to family and friends for help. In some families it may seem like nothing special to ask for money assistance but in other circumstances, a few hundred dollars can come between family members faster than you can say ‘loan’.
Family and friends may support you in many things but money may not be one of them. Before you consider asking for a loan or gift, consider the following five issues that can complicate your relationships moving forward:
1. Truly Evaluate the Situation
Before asking someone in your inner circle for money, you must first consider the big picture. Are you asking for money so you don’t lose your home; or are you looking for extra cash to buy that big screen television that just went on sale? If you are truly desperate for cash just to survive, turning to those you love can be an option. If you have a track record of irresponsible spending, you may not get the answer you really want to hear.
2. Consider the Financial Impact of Family
If you have a financial need that is legitimate, it is important to carefully consider who to ask for help. Obviously it should be someone you can trust and who trusts you but you also do not want to put someone you love in a financially compromising situation. There are many people who are willing to keep on giving long after they have nothing else to give. Approaching a family member who is going through their own financial hardships can create a lot of guilt and awkward situations.
3. Be Ready to Commit
Your parents or friends may be more than willing and able to provide the cash you need but never take their generosity for granted. Before you make your request, look at your own financial situation and figure out what terms for repayment you can commit to and create a document that outlines those terms. When you approach someone for the money, you can also present the repayment terms upfront to let people know you are serious about repayment. You and the giver should sign the document and have it legally notarized to prove your intentions even further. You must then commit to the terms you created or face potential legal action if your financial provider sees fit to go that route for repayments.
4. Don’t Push the Issue
If you approach someone about a personal loan of money, be ready to respect the answers that come back to you. Not every individual is comfortable parting with their money even if they appear to have a sufficient amount of it. Appearances can be deceiving. It takes a lot of courage for the person to tell you no and you must be able to accept their decisions without further complications or argument.
5. Exhaust Other Options
There are several options that can help you out of a financial jam which can save you the difficulties of imposing on your family and friends. You should carefully consider those options in relationship to your financial situation to determine if there is another way out. Because money can certainly part the best of friends and the closest of families, if you have any instincts that money requests will pose a problem to future relationships, it may be in your best interest to not take chances.