Five Tips On How To Handle Money Matters with Friends and Family
Money is delicate issue especially among friends and family members. It can easily turn best friends into opponents and even enemies. Friends who seemed like they had each other’s backs have ended up in court, fight bitterly over some money. When it comes to money and financial transactions with the people you are closest to, one has to be careful.
One of the major reasons that people get into trouble over money with their loved ones is because they feel reluctant discussing money because they think it is bad taste to be frank about money with close friends. This is a trap that leads to anger, betrayal of trust and disappointment towards friends and family over money matters. One of the ways to prevent financial dealings and issues from becoming a problem is not have some clarity before going into any arrangement with them.
Here are five tips on how you can do this;
Is This Actually A Loan Or Charity?
Don’t allow any vagueness; when they ask you for a substantial amount of money you need clarify things. When your loved ones say, “Can I get….from you?”, ask them if they are asking you to give it to them as a gift or they want to borrow it. This will help you decide what to do so that you don’t give a friend a huge amount that you cannot afford to give-away while they think it is a gift.
Their response will give you a clear picture whether you can help them or not.
What are the terms?
If you are in any position where you want to do business with friends or family members, don’t be shy to ask what the terms of the business are. Ask them how much profit accrues to you, how you are required to invest or contribute and other important questions.
Let them know that business is business, and immediately you see that they are unwilling to engage with you as a business partner or associate, find a tactful way to withdraw. Don’t invest in any business with family member where they feel you are being mean or greedy to ask important questions; it is a recipe for disaster.
When Do I Get My Money Back
If they actually take a loan from you, then be clear to ask them when they intend to pay it back before going ahead to borrow them.
It is possible they may not pay it back, but it will help to show for future records that they were the ones who defaulted so that they do turn the story around to manipulate you. Also if you refuse to borrow them money again, you have good reason.
Sorry, I Don’t Feel Comfortable Discussing This
You should have boundaries with friends and family members when it comes to your finances. Except for your spouse and whomever else you trust enough, your friends and family members do not have a right to demands details of your finances from you. Establish it early that you are not obligated to share important details of your financial status with them unless you have the relationship and trust to feel comfortable enough to confide in them. Try to do this without having telling them that you don’t trust them enough; be tactful
This is because we have different level of trust and closeness with various friends and family and even if they don’t like it, it is the truth.
Don’t Worry, I’ve Got This
They are your loved ones; if you have the means then you can afford to be generous. Write off debts when you can, give them cash gifts even when they ask for loans and when they default, forgive them like nothing happened. If you have more than they do, there’s no point acting small.
As much as is possible, don’t ever loan money to your loved ones when they need it for health challenges, recovery from natural disasters and other unforeseen circumstances that is of their making or beyond their capacity. Exercise discretion in dealing with them and don’t relate with them in such a hard manner; it is better simply chip in what you can.