How to refuse money requests from family and friends without destroying relationships

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Most of us, at some point, have been asked for money by a family member, friend, colleague or even an acquaintance. Often, the request (or demand) doesn’t include any discussion of a repayment schedule or interest, so it may be wise to think twice before agreeing to it.

We often give the money, believing that otherwise it will spoil the relationship. But giving the money and not getting it back can be worse.

“There's a fine line between relationship and money,” said Prakash Chandra Praharaj, a registered investment adviser and founder of Max Secure Financial Planners in Navi Mumbai.

He shared an example of a family with 2 brothers and a sister, in which the sister took some of their father’s money, saying she would repay it within 2 years but never did. Now, one of the brothers, a client of Praharaj, needs the money and is trying to find ways to recover it, but his hands are tied since there was no written agreement of repayment. “All sorts of complications come,” said Praharaj.

So how do you say ‘No’ if you think you might not get your money back?

There are no easy answers, but the first step is to know that you have the option to say No.

If you can’t bring yourself to deny anyone, try to understand what’s driving that behaviour.

You may be what counsellors call a ‘people pleaser’. This person doesn’t want to feel bad and constantly worries about what others think of her. She thinks: “If someone is asking for help, and I have the money, if I say no: “What does it say about me? Am I not a generous person? Am I a mean person?” said Anannya Mishra, a counselling psychologist in Bengaluru who is empanelled with Sneh Therapy, an online counselling practice.

You aren’t alone in thinking like this. “All of us people please at some level,” said Mishra.

When it comes to lending money to a family member, there’s an additional level of complication in saying no. “The family will make you feel like this is disrespectful, this is disloyal,” said Mishra.

If you are prone to guilt, that can also drive you to act in ways that hurt you. “You should rationalize it,” said Aheesha Chopra, counselling psychologist and founder of Lyzfest in New Delhi. In other words, be clear about the rationale why you are not giving the money, such as that you can’t afford to part with it. When the feelings of guilt come, fall back on this rationale to quell them. “Somewhere else, you can try to help,” she said.

When the call or message for money comes, “I would ask you to wait,” said Chopra. “Take 2 days before you give an answer,” she said.

This time can be used to assess your financial condition, look at your bank statements, and analyze whether you have the financial resources to give this money. If you lend money when you yourself are in short supply, “you’ll be under stress,” said Chopra.