What to do if a friend or family member owes you money

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Lending money to friends or family can be tricky. When someone close to you asks for financial help, your first instinct may be to lend a hand. However, things can go wrong if the money isn’t repaid, leading to strained relationships and financial stress. Dave Ramsey, a well-known financial advisor, often talks about these issues on his radio show, The Dave Ramsey Show. One call in particular highlighted the risks of lending money to loved ones, and Ramsey’s advice offers helpful lessons for anyone in a similar situation.

In this call, a listener shared that he had lent over $8,000 to a family member, but they hadn’t paid him back. This is a situation many people can relate to. You want to help someone in need, but when they don’t repay you, it puts you in an awkward position. Ramsey’s advice wasn’t just about dealing with the unpaid debt but also about how to approach lending money in the first place. His guidance helps not only to solve the issue at hand but also to prevent it from happening again in the future.

Lending money to family or friends is often an emotional decision. When someone you care about is struggling, you naturally want to help. You may believe that lending them money will solve their problem and give you peace of mind. But when the loan isn’t repaid, it can lead to feelings of betrayal and disappointment. Relationships can become tense or even damaged beyond repair.

Dave Ramsey emphasizes the importance of protecting relationships when it comes to money matters. He advises against lending money to loved ones because it often leads to uncomfortable situations that can ruin the relationship. Ramsey frequently quotes a Bible verse, Proverbs 22:7, that says, “The borrower is slave to the lender.” This means that debt can create an unbalanced relationship, where the person who owes money may start to feel uncomfortable around you, and you might start to feel resentful. This tension can change what was once a good relationship into something stressful and uncomfortable.