When a friend or family member asks for money, several thoughts might cross your mind, including whether or not it\u2019s a good idea in the first place.<\/p>\n
Lending money to close friends or family can be a risky affair. There are chances you may not see that money again, and even worse, it could sour your relationship. Experts say loaning money to your loved ones isn\u2019t as simple as a yes or no answer but a decision that heavily depends on context.<\/p>\n
If loaning money is going to set you behind, the answer should be a straight no, said Cindy Marques, certified financial planner and CEO of MakeCents.<\/p>\n
That\u2019s because you may not be able to recoup the money, she said.<\/p>\n
\u201cIt\u2019s fair to step in with the assumption that you may not get this money back,\u201d she said. \u201cIf you can\u2019t afford to not receive this money back, then you absolutely should not be lending the money.\u201d<\/p>\n
Refusing to lend is not selfish if it\u2019s going to be to your detriment, Marques said. You also don\u2019t have to go on at length explaining why you can\u2019t \u2014 just say you can\u2019t afford it.<\/p>\n
Emotions play an important role in the decision, said Brooke Dean, founder of BMD Financial Ltd. at Raymond James.<\/p>\n
\u201cIf you\u2019re going to get resentful or you\u2019re going to have anxiety or it\u2019s always going to be on your mind that this friend or family member owes you money, that\u2019s actually going to affect your relationship,\u201d she said. <\/p>\n
\u201cYou probably shouldn\u2019t do it.\u201d<\/p>\n
But if you do decide to lend money, understand the need for it first \u2014 whether it\u2019s to deal with an emergency, to invest or start a business or for leisure, Marques said. Each of those three scenarios warrants a different response.<\/p>\n
For example, if it\u2019s just for fun, Marques suggested having your guard up and pry a bit to understand why they need it. <\/p>\n
It also depends on how much money is being asked for. If it\u2019s an amount that would cover dinner, it\u2019s likely not going to make or break you if you don\u2019t recover it. You could think of it as a gift and let go. However, a larger sum needs a formal paper trail, noting how much was lent and how it will be returned, Marques said. <\/p>\n
Dean said the language of the promissory note can be as simple as noting the amount and the expectation of when it would be returned, such as one year or five years, and if it would be paid back in instalments or a lump sum. People can also include language about interest on the amount but it\u2019s uncommon among friends or family to do so, she said.<\/p>\n
Where that money is coming from also determines whether you can really lend it.<\/p>\n
\u201cDid you take it out of your own emergency fund? Did you take it out of your travel fund?\u201d asked Marques. \u201cOr was it just sitting there, it\u2019s just excess savings or investment, you had no particular purpose for it?\u201d<\/p>\n
If you\u2019re pulling out money from your emergency fund, it means you can\u2019t afford to treat it as a gift and would want it back as early as possible. For money that doesn\u2019t have a pressing need, the timeline for recouping can be a bit longer. <\/p>\n
\u201cIt\u2019s very subjective and you have to look inward and decide for yourself: Does this money have a purpose and a time?\u201d Marques said.<\/p>\n
You may have bailed out your loved one a couple of times before without seeing repayment, and there\u2019s a risk of it becoming an exploitative pattern, experts warn.<\/p>\n
Marques recalled a client who was burned by a family member, but the client brushed it off. Soon, more of her family members began approaching her for money \u2014 knowing there\u2019s less pressure to return it.<\/p>\n
\u201cShe was not in a place financially to be lending out money to anyone, but she felt pressured as if it was her job to do so,\u201d Marques said. <\/p>\n
\u201cI had to remind her, \u2018No, absolutely not \u2026 The math is very clear here when I\u2019m looking at your finances that this is hurting you and you simply cannot afford it.\u2019\u201d<\/p>\n
Dean said people should watch out for red flags, such as a history of defaulting on repayments or ill habits such as addiction or gambling. Considering questions such as how well you know this friend or family member, and if you trust them, can help determine if you want to help again.<\/p>\n
Often, she said, people have to put their foot down and step back from enabling the behaviour.<\/p>\n
\u201cUnfortunately, sometimes that does affect the relationship by not lending the money, which can be hard,\u201d Dean said.<\/p>\n
This report by The Canadian Press was first published Dec. 9, 2025.<\/p>\n
Ritika Dubey, The Canadian Press<\/p>\n","protected":false},"excerpt":{"rendered":"When a friend or family member asks for money, several thoughts might cross your mind, including whether or…\n","protected":false},"author":2,"featured_media":184941,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[72,176,61,60,174,175,1603,10243],"class_list":{"0":"post-184940","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-personal-finance","8":"tag-business","9":"tag-finance","10":"tag-ie","11":"tag-ireland","12":"tag-personal-finance","13":"tag-personalfinance","14":"tag-social","15":"tag-your-money"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/184940","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/comments?post=184940"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/posts\/184940\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media\/184941"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/media?parent=184940"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/categories?post=184940"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ie\/wp-json\/wp\/v2\/tags?post=184940"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}