Should You Lend People Money?
Why your "generosity" might be doing more harm than good and how to help without hurting.
Author’s Note:
Now that you’ve understood the 4 pillars of money management, the next thing is how to keep debt in check. This is an instrument that can potentially set one back massively in life.
This will be a series, and this first one is on my thoughts about us providing the debts to people.
So, this is specifically what I’ve learnt based on my little experience giving and lending people money.
There are some set of people that are “serial askers.” They are fond of asking or begging without seeking to take much responsibility, or even a little for themselves. I believe giving or lending money to them (which a good number of them won’t pay back anyway) is just you enabling them. It’s doing more harm than good.
I think we’re better off helping them by enlightening or encouraging them to be better. When you notice someone is like that, I recommend, if you have to take an amount you’re willing to let go of and give them on a condition.
That condition could be that they go through a financial class or session, or read a book and give a report on it, or something similar. For those kinds of people, what they need is probably discipline or help with managing finances, not someone handing them money that will just enable their bad habits anyway.
Now, on the other hand, I believe there are times when people are genuinely in need. It might be a one-off thing or something not so common, and in some cases, they might request financial assistance either in the form of lending or asking outright.
These are the kinds of people that feel like they are actually disciplined themselves, but probably “life” just happened to them.
To them, I recommend that if you do have a sum you can spare, money you are genuinely willing to let go of, or won’t need for the medium term, and you’d have made it back before then, you can lend them. Or preferably, give it.
But giving to people like that can be difficult because they won’t want to be in your favor.
Something to take note of is that there’s a high chance you won’t recover your money. So even if you’re lending it to them, have it at the back of your mind that your money is gone. Therefore, irrespective of who asks, if it’s not an amount you’re willing to forgo if they default, don’t bother to lend it or else you’re just putting the relationship at risk.
There are also situations where strangers might come up requesting financial assistance in one way or another. The same rule applies here: don’t lend or give anybody anything you can’t let go of.
If you trust anybody with money you’ll be needing and they default, you’ll just find yourself in a situation you wish you never got into. So don’t do it… especially for strangers.
Something else to take note of is empathy.
Do your due diligence, and by all means, render help to as many as you know genuinely need it.
“If you can help your neighbor now, don’t say come back tomorrow and then I will help you.” — Proverbs 3:28 (NLT)
A few personal stories:
A true-life story is when I lent someone I thought I could look up to some money. The amount isn’t much, just about ₦4,600 some years back and he refused to pay back even after 6 to 8 months.
I contacted him and even once threatened to report him to some people, but it was just one false promise after the other. One day, I got tired and told him:
“I’ll delete your number and leave it up to God. If you like, pay. If you like, don’t.”
He promised I shouldn’t be like that and that he would pay, but as soon as I stopped asking, I never received anything. No payment. Not even a text. As of the time of this writing.
Another experience of mine was with a respected person I admire a lot, someone I’m grateful to for inspiring me. He asked me to lend him ₦5,000, saying he would refund it in 4 days.
Of course, I did, because I had the money with me then.
Well… let’s just say I haven’t heard from him regarding the payment since I stopped inquiring.
Imagine I’m currently in dire need of that money and, as a result, became rude to him?
In conclusion...
Money can quickly make relationships weird.
So, we have to be very careful not to mix money with our dealings with friends and relatives. But since this is not always possible, be sure to only give or lend amounts that even if you never collect it, you’ll be just fine without it.
And also, that it won’t make you rude or awkward when dealing with them later.
And yes, if you are a business owner, avoid selling on credit too. It’s a form of debt that can permanently damage the relationship as well.
To a simpler financial life,
Adedoyin