Can I borrow $20? The Golden Rules of Loaning Money!

You received the phone call everyone dreads – and you know why the caller is calling you. You answer the phone with a gloomy voice – “Hello.”

In your mind, you know what is coming next . . .

“Can I borrow twenty dollars?”

So what do you do? There are certain rules you must follow before lending your hard earned cash.

Only Give What You Can Afford

Before signing that check, ask yourself, can I live without this amount? Will my finances suffer if I am not paid back timely or never paid back at all? If you need the money to pay your bills, it is not a good idea to give your money away. Only loan what you can afford to live without. Even better, if someone asks you for cash, let he or she know, while you are not in a position to loan the entire amount, you are able to provide a smaller amount to help.  This way, you eliminate the possibility of ill feelings due to the lack of repayment.

Get It In Writing

If you decide you are comfortable with lending your money to someone, it may be a good idea to have a brief discussion beforehand and record the terms of the agreement utilizing a promissory note. A promissory note documents the payment terms, amount due, interest rate and other details of the loan and should be signed by both parties. Although a bit formal, it serves as a reminder in case the borrower suffers from amnesia later on, you will have strong evidence the debt does exist.

Don’t be a Stalker! Let It Go!

Listen, at one point or another, you simply have to let it go. It makes no sense to discuss lack of payment ten years later at the family reunion. Or even monitor your borrower’s every purchase, whispering to yourself, “The money used for that new handbag could have repaid my debt!” Even the credit bureaus drop bad debts after seven years! If you are caught on the bad end of the stick, learn from your experience and commit to make wiser choices going forward.

Jason Wilson can attest to forgiving bad debts. “I remember it like it was yesterday,” he says. He loaned money to someone, whom he wishes not to disclose, and has yet to be repaid. After countless attempts to retrieve his funds, he made a sound decision to let it go and move on.  “But, this person knows he or she is not able to borrow from me again,” he laughs.

More importantly, don’t fret or fume if someone owes you a buck or two, consider it a blessing to be in a financial position to help others. And besides, you never know – you may need the financial assistance of others in the future.


Using credit wisely: The taboo conversation your parents never had!

Many of us, while growing up, had discussions with our parents about the dangers of drugs. And, despite how uncomfortable it might have been for both you and your parents, it’s quite likely that you also had “the talk” about sex. Our parents regularly urged us to stay in school or to pick our friends wisely. But, how many us had a heart-to-heart talk about credit cards.

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Squeeze the Most Out of your Paycheck!

At payday, many of us begin budgeting from our net pay. We often neglect to consider how we can make adjustments to increase our take home pay or even review what is actually being deducted. As a result, we may settle for certain taxes, deductions, and other payments which may not benefit us at all.

Do you know you can increase your take home pay by making necessary adjustments to your tax withholding? Continue reading

Giving Really Pays Back

Each and everyday, we are presented with the opportunity to bless someone. Whether it is the homeless individual at the street corner, your coworker struggling to make ends meet or your church requesting additional funds for a new building – we are presented with the opportunity to be a blessing to someone. Continue reading