If you have developed a reputation for being careful with your money, or if your family and friends know that you have savings, chances are one of them will eventually ask you to loan them some money. This is how to know whether or not you should do that:

• If you are SURE you can look them in the eye and say, “Yes, I can do that IF you can pay me back by X date (no more than two months) because I will need the money by then.” (It is none of their business what you need the money for!)
  Most People Can't Do This

• If you are SURE you can CONFRONT them immediately if they don’t repay you by the agreed upon date and say, “Are you going to bring the money by here, or should I stop by there to get it?”
  Most People Can't Do This

• If you don’t lend them more money than you can afford to lose (forever) and, if it won’t permanently change how you feel about them or damage the relationship if they never repay you, then GO RIGHT AHEAD AND LEND THEM SOME MONEY.
  Most People Can't Do This

Otherwise, make a rule, make it known, and stick to it that YOU DO NOT LOAN MONEY TO FAMILY OR FRIENDS. Another option would be that you only loan money if the person borrowing it can give you something of value (collateral) to keep until the money is fully repaid. This could be jewelry, savings bonds, vehicles, etc. that you could sell and recover the loan amount, if they don’t repay you.

These are some ways that you can loan money without being aware of it:

• Putting a lease or utility bill in your name without being certain others will pay their part of the cost

• Loaning someone your credit card

• Co-signing a loan with another person

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