borrowing money

Reader M. B. writes:

When it comes to borrowing money, how much is too much? Should you even do it at all?

Dear M.B.:

Money is a touchy subject. As a general rule of thumb, I say eschew any money issues having to do with friends or family. Borrow only from strangers or the government, and only borrow what you can pay back.

borrowing money

Image: dan / FreeDigitalPhotos.net

Furthermore, don’t lend your money to friends or family members. If you are going to lend money to someone you know, make sure it’s an amount you don’t plan on ever seeing again, because you probably won’t.

I think it’s okay to borrow money once in a while if you don’t take much and can pay it back. If you don’t pay it back, you get a reputation for being a mooch and an untrustworthy person. If you’re at the office and you forgot your lunch and your work spouse can lend you $5, okay, fine, just get him/her back the next day. (It’s better if you two buy each other lunch once in a while and don’t keep tabs on this kind of stuff.)

I also think student loans are an acceptable case for borrowing. I hate that money can get in the way of a student getting the education they want, and I believe that, for the right school, a government-backed loan is a great solution. Student loans tend to have good interest rates and a pretty affordable payback schedule, as long as you finish school and get a good job with your degree (eventually — sure took me a while, not gonna’ lie). Plus, you can defer loans if you’re out of a job.

Pay day loans are obviously not okay. If you need money that bad, there are always other ways to handle debt. The one thing most people do wrong when they are in over their heads is try to hide from the problem or pretend it’s not there. There are debt counselors, and lots of places will forgive certain fees, etc., if you just talk to them. So don’t borrow money from pay day lenders, or from, say, the mob.

So, to recap:

– When borrowing money, make sure you can afford to pay it back, and then make sure you do pay it back;

– $5 once in a while is okay between friends, though buying someone lunch may be a better route;

– Avoid borrowing or lending with friends if you can help it;

– If you do lend money to someone you love, be prepared to let that money go;

– Only lend money you can stand to lose;

– Only take money from credible sources that won’t cap your knees if you can’t pay back on time;

– Rather than hiding from money problems, get organized and get them settled, sooner rather than later.

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