It is a question many of us simply dread: "Can I borrow some funds?"
Before giving your hard-earned cash away, ask yourself, "Can I afford to live without this amount?" If you already have earmarked funds for bills and other expenses, it is not a good idea to lend it.
If a family or friend asks to borrow a large amount, consider gifting them a smaller amount. This way, you eliminate the possibility of being short of funds when you really need the cash.
Put it in black and white
This may seem over the top, but getting your loved one to agree in writing to loan terms is extremely important. Before giving up your cash, discuss payment terms, your expectations and other pertinent details related to the loan.
Document the details in the form of a promissory note. A promissory note simply documents the payment terms, amount due, interest rate and other information. Don't forget to have both parties sign the note.
Know when to fold
If you have helped a loved one and he or she has neglected to repay you, at some point you will have to let it go. It is not a good idea to stalk your loved one at the family reunion years later, or even to monitor his or her impulsive purchases.
Consider it a blessing to be in a position to bless others. Learn from your experience and move forward. However, think twice before lending your hard-earned money next time.
Kemberley Washington is a professor at Dillard University in New Orleans and certified public accountant. She is the author of "Let Your Budget Inspire You!" Follow her on Twitter: @kemwashcpa.