If you’re trying to figure out how to ask family for money, you’re probably feeling a lot of stress right now. If you’re imagining how a conversation about borrowing money from your friends is going to go, you’re probably feeling pretty anxious as well. And if you’re thinking of how to ask strangers for money, you probably are really down on your luck — or have a flourishing career in politics.
In any case, asking to borrow money from a family member or friend has to be one of the more unpleasant things you can do.
[READ: How to Lend Money to Family and Friends.]
So how should you ask family or friends for money? That is, how can you ask in a way that hopefully gets you the money — but also ends with a happy scenario, one in which you pay everyone back, and get to keep your self-respect?
We have some ideas.
How to Ask Family for Money
As you can imagine, you want to do this carefully. Here are a few strategies to employ.
Set the mood. Recognize that you’re asking for a big favor — and make it clear to your prospective lender that you realize it.
“It’s essential to approach the situation with humility and respect. It’s like asking someone to dance — you don’t demand, you invite,” says James Allen, CPA, certified financial planner and founder of the financial blog Billpin.
Don’t act like you’re entitled to the money, because you aren’t. The moment you come off as though you think this isn’t a big deal to be asking for money is probably the moment your parents, kids, siblings or whomever is going to decide to tell you no — or at least be unenthusiastic about lending it to you.
Don’t be greedy. If a family member is going to lend you money and you haven’t gotten around to an exact dollar figure yet, keep in mind that your family doesn’t do this for a living.
Sure, a $1,000 loan might really put you in a good place, but will it put them in a bad place if they loan it? Also, if it’s really just $500 you need and that’s an amount you know you can pay off, ask for $500 and not the $1,000.
On the other hand, if you really need $1,000 or $500 and you ask for only $300, you could be returning to that family member or going to another one for more of a loan, so make sure you don’t ask to borrow too little, either.
Be transparent. Because your family members aren’t banks, they are entitled to know why you need a loan — and turn you down. You should also explain how you’re going to pay the money back. And if you’re hoping this is more of a gift than a loan, or that your paying them back is not a certainty, be open about that.
This is all common sense, but if you really, really need money, you may not be thinking too clearly, which is why it’s worth thinking about how a loan could change the bond with your family member or friends.
“One has to be very careful (when borrowing money from friends or family) as it can easily destroy relationships,” says Thomas Plante, professor of psychology and religious studies at Santa Clara University in Santa Clara, California. “Sadly, there are too many examples of families being completely destroyed over this very issue.”
Of course, there may be many examples of family bonds being strengthened over loans being paid back on time.
Still, if at all possible, Plante recommends not borrowing money from friends or family, especially family. “As a rule, borrowing from relatives is dicey and likely should be avoided,” he says.
[How to Talk About Money With Family — and Why It’s Important]
How to Ask Friends for Money
Asking friends for money involves pretty much the same strategy as asking family, only with even more humility. You should present a strong case for why you’re asking your friend for the loan because they might ask, “Why come to me? Why not go to your family?”
What to Say When Asking Someone for Money
You may want to try something along the lines of, “So, I have something to ask you, and let me preface by saying I wish I didn’t have to. In fact, I hate that I have to ask you this. But I am having some money problems and I would like to borrow some from you — and, of course, pay you back as soon as possible.”
If you plan on paying your family member or friend back with interest, you’d want to say that right after “I’ll pay you back as soon as possible.” And that might make your request less painful to them. They may see this as business opportunity.
You probably don’t want to promise much interest, however, unless you’re borrowing money for some lucrative business deal. You’re borrowing money because you don’t have any, and adding interest to the loan just makes it harder to pay back.
[READ: The Pros and Cons of Prenups.]
Final Thoughts About Borrowing Money From Family and Friends
Here are a few quick things to remember:
— Keep in mind that borrowing money could negatively impact your relationship with your family and friends.
— The more you discuss when you’ll pay the person back and how, the better. It isn’t fair to them to leave them wondering and stressing over when they’ll get their money back.
— Keep in mind that if you borrow money from family and friends and then, for instance, go on a long, planned vacation (even if everything has already been paid for), you’ll be judged. That’s just how it goes.
There’s no doubt that for some people in a financial jam, asking to borrow money from family and friends is the only reasonable solution, or at least it can feel that way.
If you feel like asking for a loan from your loved ones is going to be a one-time or rare thing, it may be a better strategy than taking out a payday lending loan or some other high-interest rate loan that’s going to be much harder to pay back.
And if you’re careful, this all may work out well. Lending and borrowing money among family and friends can be done successfully, Allen says, but “is akin to walking a tightrope over a pit of alligators. It’s all about balance and careful steps.”
Still, you’ll also want to keep in mind that if you borrow money from family and friends, this type of money arrangement can go both ways — and hopefully you’ll be OK with setting a precedent. Someday, your family and friends may be the ones asking you for a loan.
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A Guide to Borrowing Money From Family and Friends originally appeared on usnews.com
Update 07/21/23: This story was published at an earlier date and has been updated with new information.
