The smart way to lend money to family and friends? Don't do it!

I agree with Linda. If you're dealing with a friend or relative, just give it to them outright if you can afford it. If not, tell them sorry, no you can't help them.

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why not loan the money to a relative and say to yourself it was a gift......and any they pay back will be a bonus! mys sister loaned me 1200 dollars some time ago during a crisis.....she had the money and it would not of did her any harm if i did not pay her back . it took a year and half but i paid her back and gave her some great gift cards to say thanks

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We've let our kids down by not taking care of their future. First it was Bush distracting us by telling us everything was all right with the economy, and then having everyone in turmoil just before the election so he could pass TARP. Then it was the Bailouts and Stimulus of Obama with all the added distractions including the beer summit between Gates and the cop. Now it’s this Joe Wilson outburst on top of the Cash for Clunkers to distract us from this Health Care takeover. Let’s focus on what’s happening in this country with the enormous debt we are building up and stay on message. And let’s keep informed at theaveragejoe.us to understand what’s going on. Check out the debt clock to see where we are today and not be distracted anymore by this silliness. If the President’s people want to divert attention from the debt and health care debate maybe they should invite Joe Wilson over to the White House for a beer. There’s already a rumor that he and Michele have set up a coffee for John and Kate.

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Another article of some prima donna telling us what or what not to do. If you are a parent and want to loan money to your kids, because we as a generation screwed everyone over to get ahead, than thats your business. I always said, your family comes first, everyone else, second.

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Right, I lent one child $15,000 he made 6 payments of $250.00
Another $6,000. Paid $1,000 back about a year ago The
First one $7,000 paid back $3,000
They were all going to pay me back no matter what. I promise!!!

Not bitter just the facts, I'm retired I could use the money, I'm still making the payments.
Dah don't lend Money Period

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Everyone of my friends used to come to me to "borrow" money because I have always worked and made good money. I am the one who is at fault for loaning in the first place. Now, with the economy the way it is, I simply cant anymore and have to deny them, which is now very awkward. They say, oh, you live in that big house and have a newer car! I say, yeah, those things cost money to maintain. these people can never stay at a job longer than a year or less. Not my problem anymore. these people almost never call me anymore. Good riddance!!!!!

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Whoever wrote this article has to be a bleeping idiot. dont lend money to family and freinds. Just dont lend money!!!!!! Period. you are definetly not going to lend money to someone that you dont know!

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I never lend money to anyone. Period.

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All business is about relationships. Good business people know how to culture good business relationships. Famiy, friends or the guy down the street, it doesn't matter.

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I learned the hard way; borrowed money from grandmother and she got mad at me when I payed her back with interest-apparently wanted me to be in her debt. Later, I stupidly loaned money to a friend, fellow church member, and neighbor and got zero back; I think it went to pay for his wife's drugs. Best advice is "neither a borrower or lender be"; human nature hasn't changed since the dawn of history.

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When family members or friends say the want to "borrow" it's a joke because they never pay you back. My kids bled me for years then the grandkids started in on me. Now I'm retired and sure could use all the thousands I wasted on them; and they're still wanting money. Funny though they don't come around or offer to help me do anything unless they want money. If I had it all to do over I would have just raised hell at them the first time they started bumming me for money then maybe they would have stopped. It's simple to understand, people who use you don't really love you so why expect any good to come from giving them your hard earned money?

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People should just give and not want the money back since someone asking for money is usually poor.

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My grandfather was a banker in the midwest. He gave small loans for tractors and farm equipment to local farmers, and through his company did extremely well, as his loans were helpful and the farmers were glad to pay the loans back. He did give loans to people he knew personally, people who gave him hard luck stories, and often these were people far more able to pay him back, but as a rule they didn't. An interesting lesson. Best to keep the loans separate from relationships. People are very funny about money.

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Please do not loan money, if they are not able to pay the bill in the first place how are they going to be able to repay you?

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For family, you don't have much choice, unfortunately. Not many people would refuse to lend their close family members money. But for friends, lending money is truly dangerous to the friendship, as is going into business with one.

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Greg has it right. In our family, loans are handle as they would be in business. There is a contract or mortgage and repayment is expected. On the other hand, if the debtor gets into trouble, the loaner is more able to work things out and not foreclose. The collateral is always there to cover the loan. It has been a great way for the kids to get an affordable mortgage without paying closing costs and having to deal with a bank, while paying the parents a reasonable return that helps in covering their fixed costs in retirement. Given the last year, I know my folks are glad they invested with their kids rather than their broker.

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I have lent money to friends and family and have come to realize that you shouldn't expect it back. Otherwise there are always bad feeling.Think of it as a gift. Getting it back is a bonus, if you do..I am fortunate that I am in a position to help them in their moment of crisis and if the amount is not outrageous ( a couple of hundred) I am glad I can help them..This is not an everyday occurence so I don't feel that I am being taken advantage of

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Zac,

I agree. Don't lend money to family or friends, but to that list I add: "Don't lend money to anyone"!

I don't borrow money and I don't lend money. If I find myself in need of cash, I use a credit card, line of credit or bank. It is SOOOOOOO DISRESPECTFUL to impose one's financial woes on someone else, whether it's family, friend, co-worker, whoever it may be.

In my experiences, I would have people asking to borrow money, not because I earned more money than they did, but because I was better at money managing/budgeting. If I was lucky enough to get all of it back, it was in so many pieces that it amounted to little more than pocket change. I finally came to the harsh realization that I wasn't helping anyone; I was unconsciously teaching these individuals how to not be responsible with their money.

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dont put all your nuts in one basket i got a idea acorn any one

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