Finances

By Bob Berens

Bob Berens offers LoveLines readers leading advice on managing personal finances with a Christian perspective keenly in mind. Check with Bob's column here regularly to find out how you can navigate your personal finances through today's trecherous financial waters. Keep you finances secure and expenditures more effective with Bob Beren's help!

Current Finance Topic

LOANS TO FRIENDS & RELATIVES-IF YOU CAN'T GIVE IT AWAY DON'T LOAN

In the bible we are told to avoid cosigning loans. If you have ever cosigned a loan or loaned a large amount to a friend, you probably don't have to be told how this strains a relationship. A bad risk is a bad risk. If your friend or relative doesn't qualify for a bank loan there is probably a good reason. Most borrowers essentially require you to prove you don't need the money to get the money. Now, are you going to be the nice guy?

Loaning money is a bit of an ego trip mixed with genuine compassion. Let's mix in some good sense. First, can you afford to lose the money you loan or cosign for? If you can't answer an emphatic yes to this question nothing else matters. PERIOD! Second, in the loan can't be repaid will you walk away from it without damaging your relationship? For most of us there will always be some loss of trust or relationship with the borrower. Why take that risk?

Two suggestions: If you see a need you can afford to resolve and feel compelled to become involved make a gift of the amount you can afford. Try to establish that this is a one-time grant. Perhaps you can suggest that the recipient repay you by helping someone else in the same way when they get the chance. You will establish a gift that may really grow and is less likely to hurt your future relationship with the recipient. If you do get the money back you might treat it as your "Good Samaritan Fund" to be "reinvested" when you see a need. The goal here is to protect both your assets and your relationships.

Bob Berens, Copyright Pending

Previous LoveLines Finance writings by Bob Berens:

Risk Management

Where do you want to be "X"years from now?

Control starts in little steps

The Envelope Technique

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