Having to say no to money requests tops the list of awkward conversations. A friend or family member asks to borrow money or wants you to co-sign a loan for them. You don’t have the money – or you just plain don’t want to. You know lending money can change the dynamic of the relationship and lead to resentment if the money’s not paid back as agreed. Is there a way to make these tough talks any easier? Thankfully, yes, there is!
How to Say No to Money Requests
Make it a Policy:
The easiest way to avoid awkward money requests to is shut them down immediately with a personal “no-lending policy.” Yes, it’s that easy! Make a policy to NEVER loan people money or co-sign loans. When someone requests help, just say, “I have a personal policy to never lend money to friends or family.” If they ask why, you can say, “My relationships are too important to have money come between us.”
This closes the door on further conversation, because you don’t loan money to anyone, no matter the situation or who it is.
Don’t Drag It Out:
When someone makes a money request of you, it’s totally acceptable to respond with, “I need to think about it,” or “I want to sleep on it.” Sometimes it’s easier to weigh the pros and cons of giving or lending money without the person right in front of you, staring at you with those sad puppy dog eyes.
If you decide to sleep on it, don’t drag it out for more than a day or two. Otherwise, you’re going to agonize over the decision and the other person will likely be anxious, too. If you’re going to say no, it’s best to get it over with quickly, like pulling off a band aid.
Be Clear, Be Concise, Be Nice:
Confusion multiplies when you multiply your words. Don’t talk in circles, or try to soften up your “no.” Doing so will only encourage the person to try and persuade you to change your mind.
Use “won’t” instead of “can’t.” “Can’t” implies that you want to give or lend them the money, but there’s some obstacle in your way. It invites the other person to brainstorm ways you can help them. “Won’t” states that you will not be lending them the money. Period. End of discussion.
Here are some ways to phrase “no,” clearly, concisely, and, of course, nicely:
- “I won’t be able to give (or lend) at this time.”
- “It’s not feasible in our family finances to help.”
- “We’re not comfortable co-signing for you.”
Notice that none of these examples explain WHY. There’s a reason for that! It’s unnecessary. You don’t owe the other person an explanation, only a yes or no answer. If they press you, look them in the eye and say, “No is the final answer.”
Offer to Help in Other Ways:
Maybe you don’t want to co-sign for your sister’s new car, but you’re willing to carpool to work with her, since your companies are 2 miles apart. You don’t want to lend your grown son cash, but you’re happy to buy him some food while you’re at the grocery store.
You’re still helping to alleviate their need without money directly in the equation. They’ll either graciously accept your alternative help, or they’ll find another way to come up with the money. This is especially effective for people who are financially manipulative or irresponsible.
Create an “Abundance Fund”:
I’m all for you being a generous person. In fact, it’s a healthy part of your financial plan. I love the concept of the Abundance Fund, which author and cofounder of Wealthquest, James Lenhoff, discusses in his book, Living a Rich Life. Essentially, once you’ve created your spending plan, including the extras and fun stuff, you put the excess cash into a dedicated account for the sole purpose of giving it away.
The next time someone asks you for financial help, you just check your Abundance Fund account, and decide if you want to give (not lend) the person the money they need. If they do happen to pay you back, the funds go back into the Abundance Fund to bless the next person. Because sometimes you really want to say YES to someone’s money request. The Abundance Fund ensures you’re doing it in such a way that you won’t damage your own financial wellbeing.
How do you say no to money requests? Let me know in the comments.
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