what conditions would you put on lending someone money

this isnt necesarily to do with property, but i have a choice of lending someone some money
i may or may not end up seeing it again
it could be anything from 7000-25000

what would you say to them though to assure they are living in their means and not overspending, not going to get themselves in financial strife again.

i wish i could tell them
you cant afford with debt to spend heaps on christmas
financial peace is a greater gift to your children than $500 on presents
i wish i could tell them to buy second hand clothes and toys and pay 1/4 of what they would pay new
i wish i could ask them for how they try to save for what sort of guarantee i have that they wont overspend and get in a mess again.
I dont know if the wife worked sooner and they hired help if that could help them and if they would consider that.
why should i give my bit of money, i'm not a rich person, when in various ways they or their partner overspends instead of really taking their debt seriously and really doing everything to gt out of it and to lower expenses and to cut out all expenses
I know rich people who buy everything second hand to build themselves up.
I do know people who need to save who just have certain standards in clothes etc and you will never change them but hopefully they can anyway save despite their higher standards of spending in some ways

whats worse is they dont stay calm when i try to talk to them and why would anyone help someone who gets angry. noone has to help them. if someone is trying to talk to them, they better treat them calmly and nicely respectfully as it may lead to some help but it wont if they bit you and show anger and make it very stressful

i under stand its a stressful topic, but if i remind them of stress to talk about it, it may lead to something, they need to be able to answer calmly and then try to switch off. I understand that is tough but biting someone or refusing to answer wont lead to any help.

what are signs or questions i could ask or expectations to see if they would get ahead or if they would just find another immature way to clock up debt especally with a partner who has high standards and insists on new clothes new toys for the kids and more spent on christmas etc than one should if one is 30 000 in debt while renting and not earning much and having 2 young children.
The husband works very hard, isnt on a high wage, there are 2 young kids, they overspend in some ways, i care about them and try to see if there is a way to to help them a bit, but will they then take the leg up and bring the debt down or will they one day find another way to clock up debt and meanwhile my little bit of money that i have for my own need future security is gone.
what questions demands would you have for them. they are not going to buy second hand toys or clothes, they are not going to spend much less for christmas, they do have ways they could save but dont, and other ways that they perhaps do, or maybe the father working hard supporting them only on his income tries harder than the partner to save. i dont want to judge but i also wish i could say something, but i know some people just wont buy second hand, but will they still get out of debt, how much do they impulse buy, how much do they realy try to save, is staying in debt with high credit card interest really better than second hand toys and clothes and a cheap christmas and pay off your debt
why should i help if they have tangible ways they could save but one of them cant bear for wahtever reason to do that, and i know i cant change people or judge, but with their standards will they make other messes or will they get their debt down if someone gave them a bit of a leg up?
i cant be met with anger when i try to talk to them
sometimes family friends and money should just not mix for the wars it can cause
i'd like any advice comments feedback please.

tag tag why isnt it letting me post why is it saying the content must have at least one tag

 

I would only lend money I'm happy to and can afford to loose.

I would only lend money to my kids or a speculative start up ( but someone who has experience in their industry and someone I know ) where there is a potential for a windfall profit

If banks aren't prepared to lend to someone , why should I . I don't pretend to be a bank .

I would put no conditions on them , outside repayments etc . If it's a matter of saying " this is how I think you should run your life / finances " I wouldn't do it .

Cliff

 

It's probably best you don't get involved to be honest

 

I would not touch this with a metal pole.

You can't change people's habit if they don't want to change.

Parents "lend" to family members only to be called "evil" for not providing more.

 

By the sounds of this it's going to cause you a lot more stress then it will cause the people you intend to lend the money,plus if you say anything along the way it's a perfect time bomb,just ticking away..

 

Imho you don't need to ask them anything to have your answer. People don't make long lasting changes in their behaviour overnight without making a conscious, mental change to their attitude first.

Unless they have done that first, the result will be the same.

Just my 2 cents.

 

You're lending them money, not becoming their overseer.
I've lent people like this money before, but I've gone into it with my eyes open knowing that there is a slim chance of getting paid back so I've done it for other reasons.

 

Although I can see you are trying to help, I can also see that these people probably won't appreciate it. It seems like they don't really understand the situation they are in. Lending them money will just be digging their hole deeper and most likely worsen your relationship with them.

 

Most people won't change until they hit rock bottom.

I have friends similar they got over $5000 behind on their homeloan because they buy too much crap. They had to go to the bank for "financial hardship" which sorted them out short term and stopped them borrowing more money for a year. You know what happened as soon as that year was up, $20,000 loan and a new car. Their financial situation had not changed. No extra money coming in at all, I just shake my head and get on with my life

 

"Never borrow,
Never lend,
Never lose a friend."

 

I started a thread some time ago and goes like this......"'CAN YOU HELP PEOPLE WHO CAN NOT MANAGE MONEY......

From experience you can not help them because they need to want to change. You will only create unnecessary stress if you try and worse you will lose money if you facilitate them.

Sad but I know this one from experience.

Agree with most on PC on this issue

 

Never do business with family or friends. It's just nasty.

 

Best to avoid it. Legal expenses can be very high when things go wrong.

 

Having been stung by lending money to a family member, and then them reneging on paying back 'cause they were too busy "keeping up" with their friends - until I really applied the pressure and it ruined the relationship - three words of advice.

DON'T DO IT

 

Hence my point re be happy to loose it . Wouldn't go in with expectations of taking legal action to get it back . We've lent our kids money to help them have a deposit to get their first IP.

Cliff

 

In my experience, most of them who lent had expectations of getting money back.

 

There are no conditions that you can put on a loan unless you draw up a contract. Any conditions you put on a loan that is not formal will just be dismissed by the recipient as soon as it suits them.

If, as I suspect, these are relatives or even worse direct kin and it's related to your previous post ala

I'd like a few choices, to earn the most income with $1000000 long and short term please.

Then they are going to try and bleed you dry with absolutely no change in spending habits on their part. Even worse you will enable them to become even worse money managers as at anytime they can turn to you for more.

You need to say NO ------ No more

 

Another don't do it here.

Been there, done that, currently doing it again.

Would I do it again? No, however other can factors can override it, which is what happened in this case.

I can attest that everything mentioned above holds true. Lend only what you are prepared to lose.

You can't change habits, only wait and see if they come seeking help.

Better to stand from afar, bite your tongue and be able to help (indirectly), rather than be excluded from their life and not being able to help at all.

 

Im in the "dont do it" camp as well.

Sometimes the best way to help someone is to not help them at all.
Its a lesson in tough love, but unless they learn the hard way, they wont learn at all.
This will be just the begining. In 6-12months or maybe 1-2 years they will come back needing to be saved agian. You will be the bad guy for not giving more.

Blacky

 

No