Borrowing money from friends - From Rags to ReasonableBorrowing money from family or friends… generally the consensus is… don’t do it.

This has to be one of the most common pieces of advice out there, and there are plenty of horror stories to back it up. But there’s a reason why, when the chips were on the table, it was one of the first places I turned.

I talked a little while ago about how I got myself BACK INTO A PILE OF DEBT; But not the normal “I owe the bank” kind of debt… My debt came in the form of 10 grand worth of dental work that needed doing. But since the work is ongoing, it’s taken awhile for those cavities to travel from my mouth to my chequing account.

I’ve been spending a lot of time with my dentist so far in 2015. 3 root canals. 10 fillings. And we’re not even close to being done.

My money on the other hand… is all used up. Up to this point, I’ve been able to pay for all the work that needed to be done by cutting a little from here and there, but now… I need some help. Here were my options:

1. Put it on my credit card and carry a balance

⇒ COST: 18% interest and a hit to my credit rating

2. Go through the financing services at the dentist

⇒ COST: It’s weirdly complicated… they try to convince you that you’re only paying a few percent interest, but when all the fees are added up it ends up being almost as much as the credit card

3. The ole line of credit

⇒ COST: I don’t use it that often, but it’s a pretty good option. Averages out to around 5% with a few fees.

4. Wait to get the work done later (when I could afford it)

⇒ COST: potentially more cavities become baby root canals… a 200 dollar procedure becomes a 2000 dollar one.

5. Borrow the money from friend/family.

⇒ COST: ???

You can see why the last option is a tempting one… mainly because all the other ones have a clear financial downside. But there was still a pretty significant mental block for me when I started considering it for my situation.

Here are the three things that helped me ask for money on my terms:


1. Forget your pride. You’re not weak because you’re asking for help.

It’s hard to admit that you’re in need. Especially when it comes to money. It seems like a major failing.

“I don’t have enough” is pretty close to “I AM not enough”.

But they’re not the same thing.  I’ve been able to help people who were going through a lean time in the past and I never thought less of them. But when it’s me in that situation, I assume that having to ask for help makes me less of a person, and definitely less of an adult.

Stepping back from the situation helped me remember that we all go through tough times, and there’s no shame in needing help.

2. Leave the guilt/pressure at home. Have a backup plan!

One of the reasons why asking for money help is so tough is we just don’t talk about it all that often. It’s not always the most comfortable topic in the best of times… so when you lay out your “sob” story it puts the person you’re asking for money in a really tough spot. They love you, and whether they can afford it or not, they might be not feel like they can say ‘no’.

I wanted to make sure that if I was going to ask a loved one for money the guilt was left out of it. That meant knowing that if I didn’t get it from them, I could very well go to one of the other credit options on the list.

No matter what the cost of credit cards, or sketchy sounding dental credit agencies… the relationship is a more valuable asset.

Talk everything out. I wanted to make sure I knew that the money could be spared, and that they knew that I would be totally fine if it wasn’t a possibility.

Starting out with guilt and obligation is a recipe for disaster.

3. Make a plan. Don’t leave it open ended.

There’s a proud history of family/friend loans. Things are loosely defined, and then misunderstandings happen. I wanted to make sure that the deal left no room for any of that.

I wanted my loving lender to know: exactly what I was using the money for, and when/how I was going to pay it back.

So I made a debt plan. I figured out what I needed and then checked my budget to see when I could pay it back.

That way, instead of just asking for 3 thousand dollars I figured out that what I actually needed was 2,500 dollars; And then I calculated that could pay back 500 dollars a month starting in April, with a final payment in September.

It makes me feel a ton better about the situation knowing there’s a set plan. Both sides know the deal, and agree that the terms are good. The lender knows when they’ll have the money back, and I have a plan to make sure that happens.

But what happens if I don’t stick to the plan? Well. I’m not sure. You could definitely apply a low level of interest to the loan it you think you need a little encouragement to keep it a priority. But I think the most important thing to remember is that the relationship is the resource at risk, and you should see any late payment as a potential hit on that resource.

And if things do happen and I need to re-think the payment plan, I know that at least I’ve established an open line of communication with my lender and hopefully we can work it out.


Relationships are so super complicated. There are ABSOLUTELY NO hard and fast rules. I don’t know your friends, or your family, what your background is with them or what your money story is.

I understand the risks of borrowing money from people you love. They’re as real as that 18% interest charge on your credit card bill. But after I worked through those three things I felt a lot better about it, and I hope that in the end I’ll find it to have been worth the risk.

What about you guys? Ever borrowed money from family/friends? Did it work… or not so much? What are some of the things that made it work better for you (or if it worked terribly, some of the things that might have helped)?


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