Yes that itself should be reason enough for you not to lend your friend money, when he asks for it but we know how difficult it is to say “no” to the friend who is asking for money because he is in debts or is required to buy something on an urgent basis.
There is no dearth of valid reasons why you can refuse him money – (a) you may not necessarily have the money at the first place (b) even if you have the money you won’t possibly want to give birth to a potential pathological borrower by not refusing him the money. Whatever the reasons may be, it is rather difficult not to “help” your friend out during emergencies. Here are a few ways following which you can truly help out your friend asking for money.
“You” are the one whom you need to convince first
Convince yourself you are right. If refusing the money to fund your needs seems too “selfish” a proposition to start with, then let us tell you that there are several other well-meaning friends/relatives who have already done the same. For some inspiration you can refer to the letter that Ayn Rand had sent to her niece, probably on being asked to fund a dress: http://dangerousminds.net/comments/ayn_rand_worst_aunt. Don’t really be flustered by the headline. Irrespective of what it says, I believe Ayn had actually substantiated her points quite logically.
How to deal with “such” requests
If your friend knows that you have extra money kept aside then make sure that you are telling him or her that you might need the money very soon if not today itself.
Instead, you can help your friend explore other options rather than the immediate option which he has opted for (i.e. asking for money from others). Following are a few
- You can help him research the affordable debt options that he can avail. You can go on to co-sign the loan as well
- You can ask him to sell off something which he doesn’t need at this point of time
- You can gift him the thing he wants (if you can afford to do that) instead of paying the money for the same
- You can review his finance management skills to find out where he is falling short
In short, you need not feel compelled to help your friend even at the cost of disrupting your own finances. You might as well have been asked by a relative or friend for money yet. However, who knows whether you won’t be asked tomorrow or not? You are the manager of your own finances. And, being proactive remains a significant part of your learning curve (as far as your personal finance management plans are concerned). The more proactive you are with your investments the better adept you are at handling your finances. So learn these tricks in advance. Make sure you are “well-equipped” to handle possible requests with aplomb. The tips offered here, will hopefully offer you the required help. Good luck!
Considering the difficulties already mentioned here, we will never want you to be asked thus. J