Interrupter CheckmarkInterrupter IconFacebookGoogle PlusInstagramGroupRamsey SolutionsTwitterYouTubeExpand MenuStoreCloseSearchExpand MenuBackStoreSign in
Skip to Main Content

File Your Taxes With Our Trusted Tax Software

The Danger Zone

So the old joke goes: if you lend your brother-in-law $50 and he never talks to you again, was it worth the investment?

The joke may be funny, but experiencing this in real life is anything but funny. Loaning money to a friend or family member is a bad decision. Someone who lends money to a loved one has their heart—not their head—in the right place. It is okay to give money, but loaning money to someone with whom you have a relationship will lead to broken hearts and broken wallets.

Check out the statistics from a recent money-etiquette survey:

  • 57% of people said they have seen a friendship or relationship ruined because one person didn't pay back the other.
  • Almost 50% have loaned $100 or more to help out someone, but 55% don't get repaid.
  • 71% lend money to immediate family members, 57% to relatives, and 54% to friends.

One fact not quoted in the survey is that Thanksgiving dinner tastes 100% better when friends or relatives don't owe one another money! Eating with your master is different than eating with your family.

No more money fights! Get on the same page with your money!

Loaning money makes relationships awkward. Parents who lend their newly married daughter and her husband a down payment for a house think they are helping out the new family. Soon, however, they are giving the young couple disapproving looks when an upcoming vacation becomes more important than repaying the loan. This leads to nothing but resentment and pain on both sides.

Don't do this to people and relationships that mean something to you. If someone is in genuine need, it's great to help. If you help with money, make it a gift instead of a loan. By not having an I.O.U. hanging over your head, you will keep your relationships strong.

Learn how to keep your relationships strong with one of Dave's recommended readings.

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.