Sunday, April 24, 2016

Warn Kids That Loans Between Friends Can Be A Shakespearean Tragedy

Today’s fantastic family finance article is:

Polonius Ponders Loans

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?

  1. Default. A loan that “loses itself” is one the borrower never repays. The lender risks never seeing the money again.
  2. Resentment. A loan that “loses a friend” is one that creates resentment in a personal relationship. Friendships and money are a risky mix.
  3. 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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