Today’s fantastic family finance article is:
Does your child know the risks of lending money between friends?
Try a little drama to get the point across. Specifically, Act 1, Scene 3, Lines 75-77 of Shakespeare’s classic tragedy Hamlet:
Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
Can your child decipher the 3 risks?
- Default. A loan that “loses itself” is one the borrower never repays. The lender risks never seeing the money again.
- Resentment. A loan that “loses a friend” is one that creates resentment in a personal relationship. Friendships and money are a risky mix.
- Laziness. “Husbandry” refers to the careful, thrifty management of resources. Why work hard to earn and manage your own money when you can easily borrow it from a friend?
When it comes to friends, to loan or not to loan is indeed a tricky question.
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