How to Say NO to Lending Money to Friends & Family

So far in my life, I’ve encountered numerous situations where I was the one lending money to almost complete strangers. I’m not sure why I lived through so many of these scenarios, but for some strange reason, even the most casual acquaintances never had second thoughts on how to ask me these tough questions.

Why did I agree to lend them money?

I was raised that way. My mother used to say, whenever someone close to you asks for a small amount (up to $100), don’t think twice. You won’t go broke because of it, and if they fail to return the money, consider it as your best investment.

They sold out for a tiny amount, but they won’t be able to scam you for more further down the road. However, be wary of those who come often to borrow small amounts and pay it back regularly.

Sooner or later, they may ask for a bigger sum – the one they don’t plan on repaying.

I had some even more fascinating encounters. As my phone rang, I was caught by surprise seeing that my old business associate is calling, considering we lost contact 5 years ago.

Seriously, we never even exchanged courteous congratulatory messages during the holidays.

The conversation went somewhere along the lines of:

“So, what are you up to in life?”

“Not much.”

” Cool, I don’t want to keep you busy, so I’ll just get to the point, do you happen to have $200 you can lend me?”

“Man, did you find the right person to ask… I’m up to my neck in loans. Why do you think I decided to close the bar? It went bankrupt. I’m still returning those debts…”

Suddenly, he hung up without even saying goodbye.

A thought immediately ran through my head, and it brought a puzzling smile to my face. Man, how deep in debts is he, if he remembered to call me? We are barely even casual acquaintances at this point.

How to politely decline a request for money

I hope you’ll be able to learn something from my brief personal story. At the end of the day, while it’s definitely true that you shouldn’t prioritize money over friends, you have to learn how to say no from time to time.

If you find yourself going through the same story over again, you’ll eventually get a hang of it. However, is there a shortcut that can teach you how to politely decline a request for money?

Allow me to share some effective ways in which you can do so.

Go straight to the point and don’t overexplain

Sometimes, things are truly simple, but I learned that just recently.

When someone asks you for money, don’t go into over explaining, giving them your financial report and plans for the future. Chances are that no one wants to listen to it anyway.

A simple yes-no answer is a much better solution here, and it seems more genuine.

Seriously, the more you try to excuse yourself and iron out the potential disaster, the bigger hole you’re going to dig. So, stop making sour faces and explaining in thin voice why you cannot do it.

Look at the other person directly in the eye and say sorry, I’m not in a situation where I can lend money to anyone.

They will quickly get the message, and start looking elsewhere. If they happen to be very pushy and determined to find out why, do not budge, just kindly let them know that NO is your final decision.

Help in other ways

Still, you don’t have to stop there. Just because you don’t want to give someone money, it does not mean that you cannot help them otherwise.

This is especially true if a family member or a close friend asks for help, and you genuinely care about them. Luckily for both of you, money is not always the solution.

Perhaps you can help them in a different way, which will allow them to focus their time and energy into obtaining the necessary funds.

Sure, this will also take up some of your own time, but hey, if you want to be a good person, sacrifices have to be made sometimes.

Create your own set of rules

On first look, it might seem like an overly simplistic solution.

You cannot just show up one day a changed man, deciding not to lend any money to family and friends, right?

But, why not?

You a grown individual after all, and you have the power to make up your own rules.

Sure, at the beginning, employing this rule might bring you into an altercation with some people, and conflicts and arguments may arise, but be patient.

Before you know it, the word will get through that you are a sort of person that does not lend money to family and friends.

You know what, even if this first line of defense fails, and people still reach out to you, just remember the first thing we mentioned, you shouldn’t be apologetic about the way you condone your own life.

Stop feeling guilty for sticking to your decision

While this isn’t necessarily a tactic that you can use to drive the conversation in a different direction, changing your frame of mind will provide massive benefits in the long run.

I cannot tell you just how freeing I first felt when I realized that I am basically torturing myself by considering if I’ve done the right thing or not.

Hey, even the banks don’t give loans to everyone, why should you?

Sure, you might be making better money than some of your close relatives and friends, but guess what, at the end of the month, you have to pay your bill as well.

Not only that, but you probably have goals and dreams, and it would be foolish to put those things on a shelf because other people cannot learn how to properly manage their money.

Practice saying no, it will come in handy

A lot of successful businessmen claim that the biggest reason for their success is learning how to say no. No to bad business deals, shady partners, deals that take up a ton of time, and you’ve guessed it, no to lending money.

By saying this simple word, you put your priorities first, and the rest of the world can fall in line. It might seem somewhat cruel and harsh, but ultimately, you have to take care of yourself and your loved ones at all costs.

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