When it comes to figuring out how to politely ask for money owed to you by a friend or family member, it can feel awkward. However, it might be essential if your borrower isn’t paying their money back on time, or you’re concerned that it might happen. Here are some best practices you can implement when you lend the money to ensure there are no surprises during repayment.
Set Deadlines And Reminders Often
Setting deadlines for repayment, such as the due date and how many installments the payments will come in with your borrower, is important so you have the expectations laid out clearly. That way the borrower knows exactly when and how much they need to pay you back each month.
You can even take it one step further and give polite reminders about upcoming deadlines. You may want to consider reminding them a week or a few days before the due date. As for how to remind them, a simple email or text message will suffice. Be sure to have these deadlines in writing so everyone knows what to expect.
Be Stern, Not Confrontational
As a lender, you need to set boundaries on the loan. While you want to be considerate of your friend’s or family member’s situation, you also need to make sure the borrower is sticking to the repayment schedule. Being stern is important so you can stand up for yourself — you want your money back, after all. However, avoid being rude or confrontational as that won’t help anyone. There are different tactics for talking with friends versustalking with family about moneyand financial situations – be sure to research some approaches to make sure you’re getting through without getting harsh.
Practice Communication
Talking about money can be difficult, so get some practice on how to be more comfortable with these types of conversations. That way, if you need to talk to the borrower about repayment terms, and what you’ll do if they don’t pay you back, you’re well prepared.
Some suggestions on how to be more comfortable include talking to other trusted friends and family members about money in general, then progressing to more detailed conversations. You might even want to practice various scenarios with your partner or a close friend, such as when the borrower won’t pay you back.
Accept That You Might Not Get Paid Back
The truth is that you may not get your money back — it’s the reality when lending money to friends and family. To prevent this from happening, get all the borrowing terms in writing to potentially avoid this issue. Like mentioned earlier, consider asking for legal assistance so you know what your rights are in case you have to escalate the matter.
