What should I do if a friend asks for money?

What should I do if a friend asks for money?

If a friend or family member recently asked you for money, you may be stuck in an internal dialogue trying to decide whether or not to extend a helping hand. 

As you frantically search Google trying to find polite ways to say, “no” or look for some sort of app to manage the loan for you so you can avoid awkward, messy conversations about money, the person on the other end of the line awaits your answer.  

You feel the pressure. And, it’s probably welling up. We know the feeling well because we’ve been there before. In fact, over 10% of the U.S. population was in this exact spot in 2022. Shameless plug: it’s why we built Zirtue. 

Regardless of however you got to us, we’re happy you’re here. While it may seem like a good idea to help someone you care about, it can also lead to strain on your relationship if the loan is not repaid or if terms are not clearly agreed upon upfront. 

We put together a list of things you might want to consider before you respond to that urgent request for money. 

1.) Don’t forget about YOU

Before making any financial decision – especially if you’re planning to help someone else, it's important to consider your overall financial goals and objectives as well as your personal circumstances. 

2.) Communication is key 

Before lending money, it's important to have a clear understanding of the situation. You'll want to discuss the terms of the loan, including the amount, the reason for the loan and the repayment schedule. Before, during and after giving the loan, prioritize open and honest conversation -- even if it feels uncomfortable!

3.) Put it in writing 

It's also a good idea to put the loan agreement in writing. Whether that’s with good ‘ol pen and paper or a digital IOU tool, you’ll both want to set up the IOU to include all of the details. Once you’ve set up your IOU, you’ll both want to agree to the terms. Taking these proactive steps can help to avoid any confusion or misunderstandings later on.

In summary, lending money to a friend or family member is a great way to help someone you care about, but it's critical to have clear terms set and agreed to before proceeding.

Whatever you decide to do, we’re rooting for you. With the Zirtue app, you can set up a loan repayment installment plan between friends, family and trusted relationships. We’re rewriting the rule that loved ones and money don’t mix.

But, don’t just take our word for it – even Forbes agrees.

Emily Cox
March 3, 2023
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