TO LEND OR NOT TO LEND?

Carefully consider these six tips before helping anybody out financially- even those closest to you.

- BY SILKE COLQUHOUN

For centuries, philosophers, poets and economists have warned that lending money to friends or family can destroy relationships.

One saying goes: 'When friends become bankers, emotions become transactions'; another warns: 'When you lend someone money, you often lose both the money and the friend.' Why is it such an awkward issue? Firstly, it changes the power balance (you as lender will have the upper hand). Secondly, it can trigger negative emotions ranging from shame and embarrassment to anger or resentment if it isn't repaid. This doesn't mean that you must ignore all financial pleas this festive season. Of course, you can lend someone money if you wish. But to safeguard your own financial well-being, use these six tips as a guideline.

Find out the 'why'