Would You Loan Your Family Money, Even If You Knew They Lied?

 

Lying woman wants to borrow money

The following blog post is part of the The Road to Financial Wellness  Blog Tour. Over a period of 30 days, the Phroogal team will go to 30 locations to raise awareness about financial empowerment. On June 6 they will be in the Washington D.C. area! Our goal is to help people learn about money by starting the conversation. We understand that local conversations can help bring about national awareness.

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I met William when he was doing plumbing repairs at my home. I’ve got an old house, so plumbing issues crop up periodically. We started talking and he told me about his dysfunctional childhood.

(It always amazes me when people tell me such intimate details about their lives, and not just about money.)

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I Handed All My Money to the Handyman

loaned moneyWhy did an intelligent woman loan nearly all her money to a guy who was only in the Friend Zone?

There aren’t any easy or obvious answers.

Quite often we don’t understand why we do certain things with money.

Spend. Save. Earn. Waste. Loan. Borrow. Invest. Donate. Hide. Hoard. Give. Take. Splurge. Keep.

There’s a complicated hodge-podge of emotions behind every financial decision we make.

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How to Loan Money to a Friend

If you loan money, get collateral from the borrower like a piece of jewelryYes, you’re reading the title correctly.  It’s not “Don’t Loan Money.”

Traditional personal finance advisors say you should never loan money to friends or family members, right?

Count me in as a fully tenured professor in that School of Thought.

What if you decide to ignore the advice and become a lender?

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