Money issues have been known to cause rifts in friendships and relationship from time immemorial. Often times when family members and friends find themselves in financial struggles, your first proclivity is help out. If we can afford to and the need is genuine we often offer money as gifts or loans. The two main issues with gifting are the emotional distress we feel if the person is ungrateful or betrayal if they do not put the money to good use. Loans are different.
The no.1 rule when it comes to personal loans is “NEVER LOAN MONEY YOU CANNOT AFFORD TO LOSE”. Nobody follows this rule. People lend money that they will desperately need (today or tomorrow) to assert family bonds and friendships. Instead of “I will give you my last”, say “I will give you what I can afford without putting myself and immediate family at risk of financial uncertainty.
When lending money you can never be 100% sure that it is going to come back, however in some cases it is more likely that that is last you will see of your money.
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