One of the hardest things you will ever have to do in life is to look a friend or family member in the eye and say no.
It’s hard enough to do this when you’ve been asked to watch someone else’s kids, or attend some event. It’s even more difficult to tell a loved one no when he or she is asking for money.
However, you might not want to lend money to family and friends since relationships can be ruined. As awkward as it is to say no in these situations, the awkwardness can be even more intense when you have a loan (particularly an unpaid loan) between you.
If you don’t want to get involved with lending money to friends and family, here are 6 tips to help you say no:
1. Make it Your Policy
Make it your policy not to lend money to friends and family.
Once you decide that you just won’t do it, it is easier to say no. You don’t even have to use it as an excuse to say no (and you probably shouldn’t — just in case you change your mind later). In your mind, though, if you have already made it your policy, it’s easier to say no.
Eventually, friends and family will realize that you never lend money to any of them, and they’ll stop asking.
2. Be Direct and Brief
Don’t go into details about your finances, and don’t make long excuses justifying your decision. You don’t need to. Just be brief and direct.
Try the following:
- “I’m not really in a position to lend you money.”
- “I really don’t feel comfortable doing that.”
- “I’m sorry, but no.”
- “That’s really not feasible for me.”
These are direct statements that aren’t rude, but that don’t provide an opening for future requests down the line. When asked to expand, simply repeat one of the phrases. Remember: It’s your money. You don’t have to justify your use of it to anyone.
3. Ask for Time to Decide
In some cases, your friend or relative might be really laying on the pressure. If you feel trapped, ask for time to decide. This is a big deal, so they should understand. Tell him or her that you will have an answer within 24 hours. Go home fortify yourself, and then get back to the person.
I don’t think, if you have been subjected to undue pressure from the person making the request, that it is unreasonable to refuse over the phone or via email. Don’t put yourself in positions where it’s even harder to say no.
4. Offer to Help in Other Ways
As part of saying no, you can offer to help in other ways.
Offer to babysit the kids while your friend looks for a job, or goes car shopping. Invite your family member over to dinner and send him or her home with the leftovers so that he or she doesn’t need to spend the money on food. You can even offer to help go over finances with your friend or relative and suggest some actions that can be taken to improve the situation and get the money need on his or her own.
Be careful, though: Most of the time, people who want to borrow money from you don’t actually want your advice on succeeding.
If you’re feeling really adventurous, you can even consider co-signing on a loan.
5. Give Money as a Gift
You can help yourself feel better by resolving to give money as a gift.
If your friend or relative has a birthday on the way, or if there is a holiday coming up, you can give a money gift. Or you can give a gift card to a grocery store so that money is freed up in other areas. In either case, this is a more natural transaction that doesn’t result in the awkwardness associated with loans and the expectation of being paid back.
6. Don’t Disclose Financial Details
If you want to avoid pressure and requests for loans, your best bet is to avoid sharing financial details with your friends and family. Being vague by saying, “We’re doing alright” and “We have enough” can be enough to leave your situation ambiguous. If you go around letting people know that you have a $30,000 emergency fund and that you make more than them, they will feel more justified asking for a loan.
It’s awkward when friends and family ask to borrow money. But in the end it’s your money to give (or not to give). Be stern and explain why you can’t lend out the money. The tips above will help you keep your relationships intact.