Family members are often the best choice when it comes to asking for help with an unexpected expense. Asking for money is often embarrassing, but being honest about why you need money makes things easier. Discuss calmly and seriously with your family about the amount you need and how you will return it. Put the agreement in writing, so that everyone is sure they have understood and accepted each condition.
Steps
Part 1 of 2: Prepare to Ask the Family for Money
Step 1. Do the math before asking for money
Spend some time analyzing your financial habits. Look carefully at your monthly bills and expenses. Find ways to keep expenses down and earn more money. Start a personal budget to keep track of your finances each month.
- You will need to know as much as possible about your financial position to present a compelling case to your family.
- For example, if you notice that you are spending too much money eating at a restaurant, choose to dine at home using cheap ingredients.
Step 2. Get a loan from trusted people
Most people who need to ask for money turn to their parents first. Do you have a good relationship with them? Perfect! You and the family member you are addressing must have extreme trust in each other and be able to speak openly. Asking a distant cousin would not be the appropriate choice unless you have a strong bond.
- The more trust there is between you and the other, the greater the chances that the latter will grant you the loan.
- You can send a letter or make a phone call, but a face-to-face conversation is certainly the most effective way.
Step 3. Avoid asking people who don't have a stable economic position
Take some time to think about the other person's financial situation. Asking someone who isn't financially stable, doesn't have a steady job, or has major medical bills is disrespectful. Try not to insist on someone who is already under pressure for their own business.
The person you trust most could be your best friend, but there is no need to ask the latter if he already has difficulties with his expenses
Part 2 of 2: Define the Loan
Step 1. Explain why you need a loan
Tell the person in question that you need to talk to them about a serious matter. Choose a quiet place and take the time to explain to her exactly why you need the money. Honestly assure him that trust and connections will remain strong even if he refuses to give you the loan.
For example, you could say: "I had to go through a considerable expense to pay university fees and now I don't have enough money left to pay my rent this month."
Step 2. Ask for the exact amount you need
Where possible, a copy of expenses, such as a bill receipt or rental agreement, should be presented. Asking for more than you need is inappropriate, but asking for a second loan because you asked for too little makes you look irresponsible.
For example, you can say: “I'd like to borrow € 20 from you to go to the concert this weekend”
Step 3. Create a spending budget for sizable loans
When you need to borrow a lot of money to pay multiple bills or a job loan, take the time to describe how you will spend the money. Coming up with a clear and concise plan can convince the person that you are trustworthy. This is also a great way to make sure your expenses are in order.
For example, the budget could indicate: "200 € for the electricity bill, 100 € for food and 50 € for transport"
Step 4. Explain how long it will take to pay off the debt
Draw up a personal budget or financial plan to get an idea of the times. This depends on the size of the loan and how much you have available per month. You may need to review your budget and cut expenses to pay off the debt as soon as possible.
- For example, a small sum equal to the cost of a dinner pays for itself in a week, but paying off a financial loan takes months or even years.
- Asking for money should be considered as a request for a financial loan, regardless of the amount or relationship with the other person.
Step 5. Make a plan to pay off the debt
Discuss how often you will need to pay back some of the money. If you borrow a large amount, you probably won't be able to pay it all back right away. Discuss with your family to determine the minimum amount you will pay back in a certain period of time, for example every month.
- Make a plan to keep track. You will never forget to pay off the loan or include it in your budget.
- Be creative! Family members also accept chores like mowing the lawn to get paid off. Asking costs nothing.
Step 6. Offer to pay interest
Remember that the other person is accepting to take a risk instead of using the money at will. Think how much interest they would get if they deposited that money in the bank for a month. Set a low interest rate, like 1-2%, and add that to what you owe him each month.
Interest is a positive way of showing appreciation for the help obtained from the family member
Step 7. Think about the consequences of late payments
Discuss what to do when you can't make a payment on time. It is up to you and your family to decide. They may remind you of the payment or add an extra to the next installment. Find something that motivates you to keep deadlines.
- For example, you could do a favor or a job for your family, such as looking after your little brother.
- Thinking about the consequences shows that you are being serious, which can make it easier to communicate openly on topics that would otherwise be difficult to deal with.
Step 8. Sign a letter of credit
On the Internet you can find numerous examples to print. Write down the details that you and your family have discussed, then each will sign with their own name. In this way your request becomes a concrete and binding agreement.
A hard copy is useful for everyone to feel safe and there is no confusion in the future
Step 9. Continue to communicate with your family as you pay off the debt
Keep in touch with your family member. Call him from time to time as you normally would to update him on how he's doing. If there are problems paying off the loan, be sure to mention it. You may be able to skip an installment or find an alternative payment plan.
Advice
- Consider alternative ways of getting money. You can opt for a line of credit, a personal loan, sell items, or take on chores in the neighborhood.
- Avoid bargaining with your family. You're asking for their money, so you have to follow their rules.
- Unless a person says money is a gift, treat it as a debt to be paid.
