Lending money to a loved one is not necessarily the only or the best way to help.
What to do if a friend or relative asks to tip money?
– It’s worth starting from whether I can really afford to lose these hundreds or tons, if the other person never pays them back, says the director responsible for communication and advice of the Guarantee Foundation Minna Mattila.
There are other risks than financial risks associated with tipping.
– If it’s a friend or relative, relationships suffer if at some point there is a dispute or dispute over the loan.
According to Mattila, the increase in tipping from friends has at least not yet been reflected in the contacts and loan applications coming to the Guarantee Foundation.
However, he thinks it’s likely that in the future there will be more calls from loved ones about tipping off, if the prices of food and fuel continue to rise and the electricity bills of more and more people increase when fixed-term contracts expire.
Find out the reason for the need for money
According to Mattila, there are sudden situations in life where the explanation for asking for money is quite natural: there is a divorce or a person becomes unemployed and unemployment benefits are delayed a little.
Borrowing may, however, be a disservice if the borrower does not properly know the life situation of his friend or relative. For example, gaming problems may be ashamed and hidden.
– If you know that there is a gambling problem behind the request for money, you should immediately put on the brakes and rather start thinking together about where the requester can get help with the problem and the resulting money problems.
According to Mattila, in the midst of several possibilities for obtaining credit, the question also arises as to why someone would ask a relative or a friend, especially for large sums of money.
– Has his credit information gone and he can no longer get credit? Does he have no income and can’t get a loan from the market? In that case, I think it would be better to help the person find out what could be done in his situation.
You can help in other ways as well
Mattila says that situations related to asking for money can appear very dramatic. A relative tells, for example, about a threatened eviction and asks for money for next month’s rent.
– Then another person’s distress can catch on so that, by borrowing, they suddenly try to move the matter forward. It may not be the best way.
Instead of borrowing, it would be worthwhile to find out if a loved one has already received an eviction notice, and seek help to handle the situation.
According to Mattila, you can sometimes borrow with confidence when you know the other person and their situation well enough. Despite this, lending is not necessarily the only way to help.
He gives, for example, a situation where a loved one has run out of money just before the next salary and he needs money for food for the weekend.
– You can think of another option: if you would invite him to eat and offer him food. The solution can be found in other ways than borrowing.
The story continues after the picture.
Lending money to a loved one can be a disservice if the background is, for example, gambling problems. Stock photo. Jenni Gästgivar
My finances are in trouble
Mattila says that the customers of the Guarantee Foundation are people who have lent money to a loved one and therefore found themselves in financial distress.
Some have taken out a loan in order to lend the money to a loved one.
Others have borrowed money and noticed that their own money is not enough until the next salary or other income, took out credit for their own expenses and little by little got into problems themselves.
According to Mattila, a close person in particular may get upset over and over again, even if they haven’t gotten any of the previous money back.
– Explanations may come from the borrower that when I get another loan or some other money, I will pay you everything back.
If the money is not due back
If you end up lending money to a loved one, according to Mattila, you should make a promissory note, especially if the amounts are large or recurring.
– There are valid models on the Internet, and borrowing can be interest-free, he says.
Mattila advises to agree on the repayment date from the beginning. If you don’t get your money back by the due date, you shouldn’t borrow any more.
At that time, the person who borrowed the money also has to think about whether he will get his money back through foreclosure.
However, according to Mattila, resorting to foreclosure is easily left undone, as the idea is foreign to many and bureaucratic dealings can seem burdensome.
– You can talk to those close to you about whether he has borrowed money from others. If this is the case, you can think together with others about what to do.
Discussion help available
Mattila reminds that the person who is being asked for money can also call the Guarantee Line’s Debt Line or get in touch via chat.
Discussion help may be needed, for example, in a situation where you don’t want to borrow money, but find the conversation difficult.
In addition, you can get free financial and debt counseling from the state’s legal aid offices.
– You can also apply for discussion help for your own situation. You don’t necessarily have to stay with the fact that the other person doesn’t want to call anywhere or seek help.