Borrowing money is sometimes inevitable, whether from shylocks, banks, Saccos, friends or relatives. Among all these, only friends and relatives can lend you money without many demands, such as your payslip, surety etc.
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However, when you borrow from these people and default in payment, you may end up ruining a great relationship. Money is a sensitive issue. There, thus, ought to be some rules when it comes to borrowing from friends and relatives.
• Last resort: Let borrowing be your last option, and only when you genuinely need the money. Consistent borrowing may portray you as irresponsible, and alienate your friends.
• Borrow from someone you trust: There are friends and relatives who will lend you money and then spread the word to all who care to listen about your ‘inability to sustain your lifestyle’.
• Why do you need the money? People will be willing to help as long as they are sure the money is for a worthwhile cause. Borrowing to pay your rent makes some sense, but borrowing to offset a loan you took to go on holiday in Dubai is frivolity.
• Keep your word: If you borrowed money to pay your mother’s hospital bill, do not divert it to other things, like reupholstering your worn out sofa.
• Sign an agreement: Sign a contract that indicates the amount borrowed, terms of repayment and due date. Let both of you sign it as a binding document.
• Lump sum payment: If you have agreed to repay the money in six installments, keep to this schedule. It may not be easy to pay a lump sum at the end of the six months, so pay the monthly dues to avoid conflict.
• Serious business: Money does not come easy. To avoid ruining your relationship because of money, steer clear of personal feelings. Treat it as serious business transaction where defaulting is not an option.
• Spend wisely: If you borrow Sh10,000 from your aunt to start a small business because you are financially down, yet the next time she meets you, you are buying a perfume worth Sh5,000, it gives the impression that you take the money you owe for granted. Why not use that money to reduce the amount you owe?
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