If someone asks to borrow money, here’s how to avoid becoming a human ATM

  • Whether a person asks for a small or large amount, experts say it’s important to make sure you’re not enabling poor choices or bad financial habits.
  • Don’t be afraid to say no. If you say yes, make sure you have an agreement in place between you and the borrower about when the money will be paid back.
  • Financial advisors say that if you’ll become resentful if the money is never repaid in full, it’s probably best to say no.

Anyone who’s ever had family or friends ask to borrow money knows it can be a tricky situation to navigate.

Saying no can be easy if you’re struggling to cover your own expenses. Yet for those who can afford to part with the money, knowing how to set boundaries can be challenging.

“You don’t want to be an ATM,” said Daniel Wesley, founder of CreditLoan.com. “It’s nice to be in a position to help out, but it’s better to make sure [the borrower] is working toward something so the loan is a means to an end versus something that enables them.”

The reasons people ask to borrow money runs the gamut, ranging from needing it to pay for food or rent to wanting it for a big-ticket item like a car, house or college.

For women, the top reason is for basic necessities, with the average amount borrowed $678, according to a new CreditLoan report based on its recent online survey of more than 1,200 adults. For men, the top reason was education, with borrowers averaging about $15,000 per request.

For some people, leaning on others for financial help can be the only way they can cover their costs. A Federal Reserve report released in May showed that more than one-fifth of adults cannot pay their monthly bills in full. Additionally, 40 percent of adults would not be able to cover an unexpected $400 expense unless they sold something or borrowed money.

Regardless, it’s important to carefully evaluate the borrower’s request when you’re asked to part with your money. While some situations are justified, other times it’s the person’s own actions — i.e., overspending or poor financial choices — that set the stage for needing money.

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