Is it wrong to borrow money from family or friends?

Borrowing money from family or friends might seem like an easy solution during tough times, but it can come with unexpected challenges. While the intent is often to help, mixing money and personal relationships can create tension, misunderstandings, or even long-term damage.

It’s important to consider the impact on both parties before making such a decision. This post breaks down the reasons borrowing from loved ones may not be the best choice and offers insight into why other options might be worth exploring.

Strains personal relationships

Borrowing money can put unnecessary stress on relationships. It often causes misunderstandings and tension, making it hard to maintain a strong bond with family or friends. This is something you can easily avoid.

To learn more: How do I stop feeling ashamed about not being good with money?

Creates feelings of guilt or obligation

Taking money from loved ones can leave you feeling guilty. It may also create a sense of obligation to return favors, which can complicate relationships and personal boundaries.

Lacks clear repayment terms or deadlines

Borrowing without formal terms can lead to confusion about repayment. Unclear expectations often cause conflicts and damage trust between both parties. This is the point of contention for most conflicts.

To learn more: How to Get Out of Debt in 5 Easy Steps

Can lead to resentment if repayment is delayed or forgotten

When money isn’t repaid on time, it can breed resentment. This can leave the lender (your family member) feeling unappreciated and the borrower (you) feeling judged, damaging the relationship.

Risks favoritism or inequality among family or friends

Borrowing from one person can create jealousy or tension among others. It may seem like favoritism, leading to feelings of unfair treatment or division in social circles. Especially when the amounts vary between parties.

To learn more: How to Talk about Money with your Spouse

Reduces financial independence and accountability

Depending on others for money can stop you from taking control of your finances. It undermines independence and prevents building healthy money habits to stay financially sound.

You will constantly be on this hamster wheel of taking control of your money situation.

To learn more: What is Financial Freedom? 12 Steps to Achieve It

Blurs boundaries between personal and financial matters

Mixing personal relationships with money makes it hard to set clear boundaries. This often leads to awkward situations or unnecessary complications in your social interactions.

May cause embarrassment or awkwardness for both parties

Borrowing money can leave you feeling embarrassed and uncomfortable. It can also put your family in an awkward position, especially if they feel pressured to help.

To learn more: How do I stop feeling overwhelmed by my financial situation?

Limits the lender’s ability to manage their own finances

Lending money might stretch your family’s budget, making it harder for them to cover their own needs. This puts both parties in a tricky financial position. So, try to avoid asking for money at all costs.

Often avoids addressing underlying financial habits or problems

Borrowing can be a quick fix, but it rarely solves deeper financial issues. It delays the need to develop better money habits or address long-term problems. You need to become financially sound on your own first.

To learn more: 12 Toxic Money Habits to Quit Today

Can lead to repeated borrowing cycles

Once you borrow money, it’s easy to fall into a cycle of asking for help again. This pattern keeps you stuck and stops you from achieving financial independence. Without realizing it, you become reliant on the extra handout.

To learn more: Should I help family members who ask for money, even if I’m struggling?

Risks damaging trust if repayment fails or disputes arise

Failing to repay money or having disagreements over terms can break trust. Rebuilding that trust is often difficult, especially in close relationships.

Family is there to support you in all situations, but with money involved, it gets quite complicated.

Stop Saying I am Broke

Stop saying you’re broke and take control of your finances instead. Break the habit of borrowing and focus on building good money practices to achieve financial freedom.

This is a broken money affirmation that you have ingrained in your head. Follow Money Bliss for practical advice, creative ideas, and the motivation you need to stay on track. Let’s make this your best financial year yet.

To learn more: I Am Broke : Why it Happens and Escape Being Broke

Know someone else that needs this, too? Then, please share!!