The Truth About Debt and Relationships

by Dave Ramsey

Myth: If I loan money to friends or relatives, I am helping them.
Truth: If I loan money to a friend or relative, the relationship will be strained or destroyed. The only relationship that would be enhanced is the kind resulting from one party's being the master and the other party a servant.

The old joke is that if you loan your brother-in-law $100 and he never speaks to you again, was it worth the investment? We have all experienced loaning someone money and finding an immediate distancing in the relationship. Joan called my radio show one day complaining about how a loan had ruined her relationship with one of her best friends at work. She had loaned the lady, a broke single mom, $50 until payday. Payday came and went, and her friend - someone she used to talk to at lunch every day, someone who was her confidante and sounding board - now avoided her. Shame and guilt had entered the scene with no provocation. We don't control how debt affects relationships; debt does that independently of what we want. The borrower is servant to the lender, and you change the spiritual dynamic of relationships when you loan loved ones money. They are no longer friend, uncle, or child; they are now your servants.

I know some of you think that is overstated, but tell me why Thanksgiving dinner tastes different when a loan has been served. Eating with your master is different from eating with your family.

Joan was really torn up about losing this friendship. I asked her if the friendship was worth $50. She gushed that it was worth many times that, so I told her to call her friend and tell her the debt was forgiven, a gift. The forgiveness of the debt helped her remove the master-servant dynamic from the relationship. Of course, it would be better if that dynamic had never entered the scene. I also suggested two stipulations to the forgiveness of the debt: first, that the friend agree to help someone in need someday, and second, that she never loan a friend money. Let's break the myth chain. In Joan's case, the myth chain of loaning a friend money will be broken only if they both learn their lesson. The lesson is that while it is fine to give money to friends in need if you have it, loaning them money will mess up relationships.

Hundreds of times I've seen relationships strained and sometimes destroyed. We all have, but we continue to believe the myth that a loan to a loved one is a blessing. It isn't; it is a curse. Don't put that burden on any relationship you care about. For over 10 years, we've been teaching people how to beat debt and build wealth.

Dave Ramsey is a personal money management expert, an extremely popular national radio personality and best-selling author of "The Total Money Makeover: A Proven Plan for Financial Fitness." In his latest book, a follow-up of his enormously successful New York Times best-sellers Financial Peace and More Than Enough, Ramsey exemplifies his life.s work of teaching others how to be financially responsible, so they can acquire enough wealth to take care of loved ones, live prosperously into old age, and give generously to others. This content is provided by DaveRamsey.com and may be used only in its entirety with all links included. Dave Ramsey is changing the face of America by helping people.

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