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Why lending money (with the expectation of repayment) is a bad idea?
1. Well the indication that you want to be repaid makes me honestly believe that you may have needed that money. So if you need that money why would you give it away? You worked hard for that, use it for what you need.
2. It creates tension. No one likes owing anyone. I have never seen a situation where the situation hasn't been tense or caused some dispute. Oh, and don't even think of involving a contract. It now makes the other person feel as though you think they're not trustworthy. Contracts are for banks not friends.
3. You're not helping them (more towards repeat borrowers). Why do they need to borrow money? Well, I'd like to think it's because they don't have any at the time (or ever). Why don't they have money? Maybe, their job doesn't pay well or maybe their lack of money is due to horrible financial planning, in either case the real problem isn't fixed simply because you alleviated their financial worries for the moment.
In any case lending money is just a bad practice, now this isn't to say that you can't give away money. You can do that but only if you have it to spare. Anything (as far as money is concerned) outside of charity is a no-go. True friends are hard to come by, don't let financial issues come between friendship.
3. You're not helping them (more towards repeat borrowers). Why do they need to borrow money? Well, I'd like to think it's because they don't have any at the time (or ever). Why don't they have money? Maybe, their job doesn't pay well or maybe their lack of money is due to horrible financial planning, in either case the real problem isn't fixed simply because you alleviated their financial worries for the moment. In any case lending money is just a bad practice, now this isn't to say that you can't give away money. You can do that but only if you have it to spare. Anything (as far as money is concerned) outside of charity is a no-go. True friends are hard to come by, don't let financial issues come between friendship.
I haven’t had a bad experience in lending money to my friends yet so I don’t see why it would be bad. Most of the time it’s only for emergency cases and we loan money we can pay and give. But I do understand your point that sometimes the “pay back date” may create tension between friends because somehow, you feel guilty. However, if you really know the friend you’re lending money to, there shouldn’t be any problem in being direct about it.
ReplyDeleteEustolia Nitta
I completely agree with you. I also have friends that I've lent money to that have paid me back without any sort of hassle. Majority of the friends that haven't paid me back are the same ones that I've lent money previously without any repayment issues. My point was that there could always be a situation in which they do not pay you back. So be prepared and only lend money that you can afford to lend. I still lend money but I don't hold my breath waiting to be repaid. You never know what emergency may come up (either with you or your friend). I love your point about being direct and it shouldn't be an issue but it often is even when your friend does not communicate those feelings. I wholeheartedly believe that one shouldn't have to suffer for another to prosper. Lending is not bad but if the repayment of that money is going to 'worry' you then it's best not to lend that money.
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