Family and Friends on a couch

How to Ask Family and Friends for Financial Help

When you’re short on cash and need money, you can ask family and friends for financial help. Here’s how.

Your financial health is crucial in many areas of your life. Being in a good financial position gives you the freedom to make choices. However, there are times when you might find yourself in financial trouble.

Perhaps something outside your control – a job layoff or a health crisis – pushed you into spiraling debt. Or it could be a problem of your own doing, like a wrong investment decision or uncontrolled spending. If you have exhausted all means to recover financially, borrowing from family and friends may be the only option left.

Asking for financial help from family and friends is more common than you think. A LendingTree survey showed that more than half of Americans have borrowed from family or friends within a year.

How to Borrow from Family and Friends

As much as it is embarrassing to ask for financial help, borrowing from family and friends is better than taking out a payday loan. They are more understanding and will be more lenient with repayment. On the other hand, it can be uncomfortable on your end and theirs. And if you are unable to repay on time or at all, it could strain your relationship. To prevent this, here are some tips to keep in mind when asking for financial help:

Determine How Much You Need

Be clear about the exact amount you need. It should not be much less that you have to ask for money again. And it should not be much more than you need that you might have a more challenging time repaying.

Choose the Right Person to Borrow From

Be strategic and considerate in deciding who to ask for financial help. It must be people you have a good relationship with and who are capable of lending you money. And if you know them to be generous and quick to help, they are the right people to borrow from.

Share Your Story

Don’t start your conversation by asking for money straight up. Share how you got into your problem in the first place. You need to build empathy and trust. If they see your honesty and humility, they will be more willing to help.

Explain Your Efforts

Before even you borrow, do everything you can to keep the loan amount low by cutting your expenses and doing extra work. Explain what you have already done and why it is still not enough. Make them understand they are last your resort, not the first.

Be Clear About What You Are Asking For

Don’t give a long sob story and not be clear that you need money. Don’t beat around the bush. Be specific about how much you need, how you arrived at that amount, and what you will use it for. Always ask politely and respectfully. And do it in person, not over the phone, text, or email.

Give Flexible Options

Offer alternatives that they are more comfortable with. You can pay interest on a larger amount or ask for an interest-free loan on a smaller amount. Request if you can pay in installments with interest. Your family member or friend may even decide to give you a smaller amount but as a gift, not a loan.

Have a Clear Repayment Plan

Specify when you will repay the loan. Be realistic with your timeline as you want to be true to your word. It is better to pay in installments, even if they are small amounts over a more extended period. Then put it in writing.

Offer Services in Exchange

To show your appreciation and be known as a giver, not just a taker, offer to do something for them. It can be doing chores, running errands, babysitting, or whatever skill you can provide that they would otherwise pay someone else to do. If it is something they value, you can even be creative and offer your services as a partial loan payment.

Give Them an Out

To avoid awkwardness, give them time to think things over, so they do not feel pressured. If you sense hesitation, assure them it is not a problem if they cannot give you a loan. Instead, you can ask for their advice or referral, which they will gladly share.

Fix the Underlying Problem 

You don’t want to be that person who asks everyone for money. So, you must deal with the cause of your financial difficulty. Asking for financial help once or twice is fine until you get back on track. But don’t make it a habit. And if you do find yourself in a better financial position and someone is in financial trouble, pay it forward by offering to help.

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