Lending money to family or friends can be precarious. Not only are you opening your wallet, you are opening your heart to possible disappointment.
I've discovered over my 20 years as a financial planner, if the loan isn't repaid it can cause irreparable harm to a relationship.
There are things to consider before you loan someone money. Decide if you can afford to help. Make sure you won't put yourself in a bad situation by not having that cash available. Get your spouse's or partner's approval. Lend only what you can afford to lose. Put the agreement in writing. Charge interest. There can be tax implications so this is important.
Bottom line - when you lend money to someone, will you be OK if you don't get paid back?
No comments:
Post a Comment