Can I Borrow Twenty Dollars? – The Golden Rules of Loaning Money!

You received the phone call everyone dreads – and you know why the caller is calling you. You answer the phone with a gloomy voice – “Hello.”

In your mind, you know what is coming next . . .

“Can I borrow twenty dollars?”

So what do you do? There are certain rules you must follow before lending your hard earned cash.

Only Give What You Can Afford

Before signing that check, ask yourself, can I live without this amount? Will my finances suffer if I am not paid back timely or never paid back at all? If you need the money to pay your bills, it is not a good idea to give your money away. Only loan what you can afford to live without. Even better, if someone asks you for cash, let he or she know, while you are not in a position to loan the entire amount, you are able to provide a smaller amount to help.  This way, you eliminate the possibility of ill feelings due to the lack of repayment.

Get It In Writing

If you decide you are comfortable with lending your money to someone, it may be a good idea to have a brief discussion beforehand and record the terms of the agreement utilizing a promissory note. A promissory note documents the payment terms, amount due, interest rate and other details of the loan and should be signed by both parties. Although a bit formal, it serves as a reminder in case the borrower suffers from amnesia later on, you will have strong evidence the debt does exist.

Don’t be a Stalker! Let It Go!

Listen, at one point or another, you simply have to let it go. It makes no sense to discuss lack of payment ten years later at the family reunion. Or even monitor your borrower’s every purchase, whispering to yourself, “The money used for that new handbag could have repaid my debt!” Even the credit bureaus drop bad debts after seven years! If you are caught on the bad end of the stick, learn from your experience and commit to make wiser choices going forward.

Jason Wilson can attest to forgiving bad debts. “I remember it like it was yesterday,” he says. He loaned money to someone, whom he wishes not to disclose, and has yet to be repaid. After countless attempts to retrieve his funds, he made a sound decision to let it go and move on.  “But, this person knows he or she is not able to borrow from me again,” he laughs.

More importantly, don’t fret or fume if someone owes you a buck or two, consider it a blessing to be in a financial position to help others. And besides, you never know – you may need the financial assistance of others in the future.

Remember, your choice, your future!

Kemberley Washington is a certified public accountant and former IRS agent.  She works as a business professor at Dillard University.  Follow her Twitter or subscribe to her blog at


3 thoughts on “Can I Borrow Twenty Dollars? – The Golden Rules of Loaning Money!

  1. I enjoyed reading this article. I’m sure it hits close to home for many people. I think your first rule is one to live by. In fact, in most instances, I don’t lend money, I give. If I can’t afford to simply give the money, I don’t give at all. I have found that you will be disappointed, more often than not, if you give money in hopes of getting it back, unless there is some sort of legal arraignment (which you also addressed).

    Therefore, when someone I care about asks me for money, I don’t give it to them unless I can feel comfortable parting with the money forever. When I say “comfortable,” this is not merely a financial decision. I truly have to feel like the person deserves the money, and they are not simply looking for a handout (which is usually evidenced by the frequency in which the ask for money). So, when I hand over the cash, I don’t look back. If I get some or all of it back, that’s just a bonus.

  2. Thanks for your comments and am grateful you enjoyed the article:) Far too often money is the main cause of relationships going south, therefore I totally agree, make it a point to give instead of loaning. This way you will not be disappointed if the person does not repay you.

  3. I totally agree. I’ve been stuck in this situation on several accounts. I think it’s much safer to only give what you can afford to lose. Great article.

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