4 downsides of borrowing from family members
Living on your own is arguably difficult especially if you’ve been long dependent on your parents and other people. You now get to pay for your rent, utilities, gas and car services and other household expenses.
In simpler words, the time has come and you’re now filling in a responsible adult’s shoes. And chances are, there’ll be moments where your income just can’t cover all the costs.
We can find solutions for such shortcomings. However, there will come a time where you’ll find yourself where an unexpected or overlooked event suddenly knocks you down. It could be an emergency, your car unexpectedly broke down, an unanticipated death, travel expenditures or worse: you and your significant other’s anniversary.
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These circumstances can happen anytime and anywhere—without prior notice. And where or who do you usually go to whenever times like this happen? Correct. It’s either your bank, payday lender, friends or family. But it isn’t always that your friends and family give you a green light when it comes to borrowing.
It can become personal. This factor has its upsides and downsides. You see, money is one of the common reasons of broken and stained relationships. It’s up to you if you’ll let money get in the way of you and your family.
On the upside, a family member, relative or friend is more likely to lend you money since you are extremely close and have built a strong foundation for your relationship. On the downside, the same people can also deny to lend you a few bucks if you have had a conflict in the past—most especially if it involved finances.
You’ll be under their microscope. Since you’ll be borrowing money from them, it’s only their right to know where and what you’ll use it for. Is it for a small business investment? Money to pay for an old debt? Traveling purposes? Emergency expenses? Whatever it is, you should be honest to them and tell them upfront what you’re going to use it for.
If it’s only for the sole purpose of luxury needs and to feed your materialistic ego, don’t be too shocked when they close their doors on you. And if ever they do hand you an amount, spend it accordingly. Remember, this is still their money you’re holding and they have every ounce of right to know where it goes.
It can get out of hand. Let’s face it, when you borrow from a close friend or family member, it’s a very informal process. Albeit, there’s no contract or legal documents involved unless you agree to it just to ensure repayment method but that rarely happens. So, when you fail to repay on time the money you borrowed, things can get messy rather quickly.
Resentment. Sometimes, borrowers don’t even repay their debts. And when your relationship deteriorates, the person that lent you the money may use it against you. In addition, if you refuse to repay and fail to come to an agreement regarding the interest rate, it may only result in a heated discussion.
That’s one good relationship foundation torn down. How many more are you willing to sacrifice just in the name of a few bucks? A little too awkward for family reunions, right?
See? Although there’s a long list of advantages borrowing from the people around us, there’s more consequences to it you’ll regret in the future.
It’s money we’re talking about: if you can repay them in time with the interest rate you both have agreed upon, then there should not be any issue between you however, if you fail to do just that and deep down you know you can’t commit to that much responsibility in the first place, then you’re up for a huge trouble.
Save your relationship with the people around you by avoiding financial conflict with them. These are the instances that may spun when you borrow from them, you’ll never know what can happen. Furthermore, these are the cases in which running for a reliable lender is often better.
About Chie Suarez
Chie Suarez has spent time figuring out ways on saving money and stepping away from her go-to retail stores. She then became a writer for Speedy Money which offers hassle-free payday loans services.