Three things to remember when asking for help with money
Asking for help can be uncomfortable -- especially when it comes to money.
If you've found yourself in a situation where you recently Googled questions like...
“Where to get cash fast?”
“How can I borrow money immediately?”
"Who can I borrow money from?”
“How to ask a friend for money?”
First things first. You’re not alone. And, you’re in the right place.
If you searched for answers to questions like these, you were likely presented with several ads from companies perfectly willing to lend you the money you need – paired with a hefty interest rate that could set you even further behind financially. Especially in today’s economy, having a supportive network of loved ones in place can make a world of difference when it comes to personal finance.
But, let's face it, asking for help can be uncomfortable -- especially when it comes to money. But, why is that? As it turns out, there's a lot at play that makes asking for help feel… weird.
We're on a mission to get to the bottom of this historically-messy exchange (and change it for the better), so we turned to the research and met with a bunch of real people who use Zirtue. We put together three things we hope you remember, if you (or someone you know) are considering reaching out to someone you care about for financial support.
1.) You're not alone
There's no beating around the bush here -- you're not alone. According to The Federal Reserve, $184 billion dollars is informally borrowed and lent between friends, family members, and trusted relationships every single year. Numbers that large can be hard to conceptualize, so we broke it down into something we think might be more relatable. With $184 billion you could buy…
- 3,188,631.83 Sedans at an average price of $19,235 (average calculated across three major car brands at MSRP base value in Q4 2022).
- 40,979,955,456.6 Medium McDonald's milkshakes at $4.49 a pop. So, if every person in Dallas (~1.2 million people in 2022) went to Mcdonald's, each person would have to buy 34,149.96 milkshakes to reach $184 billion.
That breakdown didn't work as well as we'd hope it would. In short, $184 billion is a lot of money and the exchange of money between loved ones is really common.
Having a support network in place before you need one can make a world of difference. Whether it’s friends, family or a trusted relationship – it can be difficult to ask for help when you need it. Having a support network can provide a sense of security, comfort, and encouragement, and can have a positive impact on overall well-being and success.
2.) People really do care
People generally want to help when others are in need. The evidence can been seen all around us! But, don’t just take our word for it. According to a study in the Journal of Experimental Social Psychology, being kind and helpful can make us happier and give us a sense of purpose. Even across cultures, people seem to experience greater well-being when they help others, suggesting this might just be human nature.
More times than not, people are inclined to offer aid where needed. Studies have also found that helping others can have positive psychological benefits for the helper, such as increased feelings of happiness, reduced stress, and improved self-esteem.
Borrowing money from someone you know can help you avoid loan sharks with predatory interest rates. Of course, this decision depends on your individual financial situation and personal preferences. Getting financial support from a loved one instead of an institution can have several advantages. Here are a few things to consider:
- Potentially lower costs: Borrowing from a friend may cost less than traditional financial institutions, as the loan may be low-or-no interest.
- More flexible repayment terms: Borrowing from a friend may allow more flexible repayment terms, as the two of you can agree on a schedule that works best for both.
- Stronger personal relationships: Borrowing from a friend can strengthen personal relationships – helping you build trust and mutual understanding.
- Quicker and easier process: The loan application process with a friend is often quicker and easier compared to traditional financial institutions.
With friends and family, there is a real emphasis on the human condition – enabling people who care about one another to help in an organized, accountable way.
3. Clarity is key!
You’ve asked a friend or family member for help and they’ve offered to help – so now what? The biggest hurdle is now over. If you’ve already made it past this step, kudos to you – asking for help is a sign of strength!
What we’ve learned through extensive research with real people is that transparency and accountability are paramount. So, now that you’ve got someone in your corner, it’s time to make sure that:
1.) You get access to the thing(s) you needed money for in the first place
2.) Make sure you’re able to repay the person you care about in a way that works best for everyone!
Remember when we mentioned that over $184B is personally lent and borrowed between friends and family? Unfortunately, the grand majority of those informal IOUs (or loans) aren’t ever formally agreed to and – more times than not – end up ruining life-long relationships.
So, if you decide to borrow from a friend, it's essential to establish a way to track the loan you’re setting up with a friend or family member. This way you can set up a repayment installment plan that contains clear and fair repayment terms. You’ll want to communicate openly and honestly with the other person, and to be mindful of the potential impact on the relationship.
It's important to approach the conversation in a way that is respectful and comfortable for everyone involved. By being honest and clear about your situation, showing appreciation and gratitude, offering to repay the loan, and being respectful of the person's decision, you can find the support you need during a challenging time, while also maintaining the relationships that matter most to you.
If you’re considering asking someone you know for help with money, we’re here for you! With Zirtue, you can set up a loan repayment installment plan that works best for you and your loved one.