Why you should think twice before handing over money

We all want to help. It’s what good people do. When a friend rings in tears about a car repair they can’t afford, or a family member confides they’re behind on the mortgage, our first instinct is to reach for our purse.

We tell ourselves it’s only money – and that we’d expect the same kindness if the tables were turned. But as I’ve learned (the hard way, I might add), lending substantial sums to those we love can come with a cost far greater than what’s written on the cheque.

Now, don’t get me wrong. I’m not saying you should never help someone in need. Life happens, and sometimes the right gesture at the right moment – a lift, a home-cooked meal, or a few dollars to tide someone over – can make the world of difference. But the trouble starts when the amount begins to matter. When it shifts from a favour to a financial entanglement. That’s where things can unravel quickly.

The slow unravelling of trust

Years ago, a close friend of mine – let’s call her Margaret – found herself in a spot of bother. Her business had taken a downturn, her bills were piling up, and her pride wouldn’t allow her to ask her children for help. So she came to me. I told myself it was just a temporary loan; she’d be back on her feet in no time.

Six months later, the repayments hadn’t come, and the conversations between us had changed. Where we once chatted about the garden and the grandkids, now there was a quiet tension under every sentence. She’d stop calling as often. When I did see her, she’d look embarrassed – or worse, defensive. I began to feel resentful, which made me feel ashamed, because wasn’t I the one who’d offered to help?

It took years – and a lot of honesty – to rebuild that friendship. We never did sort out the money part. Eventually, I told her to forget it. But I learned something invaluable: lending money changes the relationship. It shifts the balance, whether we mean it to or not.

Money makes it messy

When we lend to friends or family, it’s rarely a simple financial transaction. It’s tangled up in emotion, loyalty and guilt. We want to be generous – to show that we trust them, that we care. But when repayment doesn’t go as planned (and it often doesn’t), the emotional fallout can be immense.

You can’t easily chase a loved one for payment without feeling awkward. You can’t send them a “final notice” or threaten legal action – not without losing more than you’re owed. And so, instead of an invoice, what gets written off is the relationship.

It’s not that people mean to take advantage. Often, they truly believe they’ll pay you back. But life has a way of throwing curveballs, and what starts as “just a short-term loan” becomes a lingering discomfort that both sides tiptoe around.

The golden rule: never lend what you can’t afford to lose

I have a simple rule these days: I’ll happily give small amounts – a few dollars here or there, something that won’t cause me sleepless nights if it never returns. But I won’t lend anything I can’t afford to lose – not the money, and not the friendship.

If someone needs serious help, I’ll find another way. Maybe I can help them budget, or brainstorm ways to earn extra income, or connect them with services that can assist. Sometimes, the best gift you can give isn’t money – it’s time, advice, or emotional support.

Because here’s the truth: once money gets involved, the power dynamic changes. And once that changes, you can’t always get it back.

When saying no is an act of kindness

Saying no feels awful. Especially when someone you care about is struggling. But “no” doesn’t have to be harsh – it can be firm, fair and full of love.

You might say, “I really want to help, but I’ve learned not to mix money and friendship. Let’s see what other solutions we can find.” Or, “I can’t lend you money, but I can help you make a plan.”

Most reasonable people will understand. And those who don’t – well, that tells you something, too.

Protect your peace

The older I get, the more I value peace of mind over possessions. Friendships, trust, and laughter shared over a cuppa – those are the riches that matter. I’ve learned to protect them, even if it means keeping my wallet closed from time to time.

Because at the end of the day, you can replace money. But once trust is broken – once that invisible thread of friendship frays – it’s a much harder thing to mend.

So help where you can, give when you’re able, but remember: generosity doesn’t always need to come with a price tag. Sometimes, the kindest thing you can say is a thoughtful, loving “no.”