Anyone who is familiar with Shakespeare will recognize these verses from the opening pages of one of his most well-known works, Hamlet. Here, the aged Polonius discusses loans with his son, Laertes, and gives us these insightful words.
Borrowing and lending was running amok among the English gentry in Shakespeare’s time, and many people were selling off their estates piece by piece in order to keep up the appearances to their friends and family. As we all know, it is a poor management of one’s resources that led to their eventual ruin.
However, that isn’t the focus of today’s article. The first two verses interest us more. Why is it a poor choice to borrow money from friends and family? On surface, it sounds like a great idea – friends and family aren’t going to come banging at your door, to sell off your house and land, and they (most probably, at least) won’t take the issue to the court. In truth, you’re probably better using a reputable lender like Emu.co.uk.
But, as it often happens, the experience shows there is far more at stake than material goods. When it comes to friends, when we borrow money from them, and fail to keep up our end of the bargain, we usually have one of two outcomes, depending on who we’re borrowing money from.
If we’re borrowing from a friend, what we essentially do is endangering a friendship, and, more often than not, we kill it off entirely. After all, why would someone keep up a friendship with someone who doesn’t take finances seriously, especially when they come between two friends? With family, the issue is more complicated, as familial relations are not something that can be dealt away that easily. What usually happens is that family members will cut ties with us. That may not sound too terrible, depending on the family in question, but remember – family forms a safety net upon which we can always count if the things go sour. You do not want to cut this net to shreds, and borrowing money from family (and failing to return it) is a sure way to do so.
Now, the question remains – why are loans such a powerful way to destroy familial ties and friendships? Aren’t both of these bonds supposed to be above such petty matters, like money is? Aren’t we supposed to be better than that? Why people cut their ties with us when we fail to return the loan, and why are we prone to do the same when the identical thing happens to us with reversed roles?
It all has to do with what a familial ties and friendships are and what a loan does.
In family and in friendship, there is an unspoken rule that we’re equal. Sure, we will respect our elder family members and we will look down upon our younger ones, but it is generally assumed that one member of the family isn’t more important, so to speak, than the other. This goes even more for friendships, because friendships involve an element of will. We stay friends because we will to do so – we may ignore our family members for 20 years or more, but they still remain family. Friendships require more care to thrive.
However, that is where loans stab their black daggers. Borrowing and lending includes an element of superiority and inferiority that, ideally, should have no place amongst family and friends. To the lender, you are no longer a cherished family member or just a friend. You are those things, but now, there exists a thorn of economic inequality. The lender has the power to destroy – he or she most probably won’t resolve to such an approach, but the very fact that they’re abstaining from such an extreme option is what will inevitably cause a strain in the relationship between people who used to be equal.
Now, what are your options?
There are multiple ones. First, you shouldn’t borrow from your family and friends. Sometimes, paying an interest is better than risking those near and dear to you. Of course, sometimes that isn’t an option.
Second, emphasize that there exists a chance that you may not be able to return the money and that the lender shouldn’t borrow the money to you if that poses a risk to your relationship with that person. Honesty is the best policy.
Third, consider borrowing money from multiple friends and family members, but in smaller amounts. Let them all know you’re doing this – individual family member or friend would be much less likely to make an issue over a smaller loan than a bigger one.
Most importantly, take some responsibility with your finances and never fall into the vicious circle of borrowing again.