The March issue of Money Magazine had an interesting article that addressed something that many of us have experienced in our lifetime: How to ask a friend or relative to pay back money you loaned them in good faith. I remember lending my best friend a few dollars during our college years. Even though the amount was negligible, the fact that he had to be reminded of the debt several times before repayment created an unnecessary tension between us. Since that time, I have been reluctant to lend money in that manner. As the article states, the best way to avoid a situation like this is to avoid lending money to friends and relatives. However, that is easier said than done.
The first suggestion in the article is to decide what is more important—staying on good terms with the borrower or getting your money back. Once this is decided, and assuming you decide on recovery, talk with the friend face to face; do not text, e-mail or call regarding the debt. Invite the friend to chat over coffee or a cold drink in a relaxed environment. Remind your friend that you were happy to be able to help him out in a time of trouble because that is what friends do. Ask him what his plans are for repayment. Discuss with the borrower your current needs and why it would be helpful if he could make progress on reimbursing you for your outlay. You should specify a schedule for payback. If you fail to do this, the loan could drag out forever. You will also have to come back to the table again to discuss this uncomfortable subject. When you establish the timeline, offer flexibility. Don’t necessarily demand payment in a lump sum. Suggest installment payments if you think it will increase the prospects of recovery.
On a more positive note, the USAA Spring 2013 edition gave some guidelines on major milestones in our life and how money comes into play. On the subject of marriage, their first suggestion was to vow not to start off in debt. Don’t dig a hole with wedding costs before you walk down the aisle. Starting off with a focus on debt management will pay huge dividends down the road. The next idea was to trade financial information with your future spouse. Know what you are getting into. If one of you has bad credit, it may be prudent not to combine your financial resources. This discussion can be an opportunity to communicate and collaborate as opposed to a problem to be solved. It’s about finding out what your partner’s financial expectations are and how they handle money. Finally, the article suggests that you consider maintaining at least one checking and savings account plus a credit card in your name only. This will help keep credit histories separate. Love and marriage are high ideals, but money can make or break your futures together.
Wedding season is almost here, so I thought these words spoken by a Nigerian bishop of the Anglican Church were interesting: “He turned to his new son-in-law and quoted from Ephesians 5: ‘Husbands, love your wives, just as Christ loved the church and gave himself up for her.’ Your job is to be Christ to my daughter. From this day forward, you must be worthy of her obedience as Christ was worthy. Express your authority in humility and self sacrifice. Do not demand esteem, but earn it. When you are Christ to my daughter, she will joyfully submit to you. If you cease to be Christ to her, the conditions calling for her to obey you will no longer pertain. I shall pray for both of you.” I have had trouble understanding this chapter of Ephesians. This man’s interpretation was new to me. If nothing else, it is thought provoking. God’s peace and love to all.
Securities, insurance and investment advisory services offered through FSC Securities Corporation, member FINRA/SIPC and a registered investment advisor 3416 North Blvd, Alexandria, LA 71301, (318) 448-3201. The views expressed are not necessarily the opinion of FSC Securities Corporation.
