In the words of The Beatles, “I get by with a little help from my friends.” Most of us get through our day to day lives with a little help and support from the people around us. Sometimes we find ourselves in need of some emotional support. We might look for a friend with a shoulder to lean on when things get tough. At other times, we might find ourselves in need of a different kind of support.
Like when we need some financial assistance to pay all the bills at the end of the month. In these situations, it may be a little harder for us to reach out to friends or family and ask for the support that we need. We’ll give you some tips on how to ask someone for money.
Asking for Money is Never Easy
No matter your age or circumstance, it doesn’t feel pleasant to ask others for money. Finances are a sensitive subject for most, if not all, people. When pressed, most would sooner tell you their deepest and darkest secret before revealing how much money they have in the bank.
Nonetheless, all of us need to have some money to pay the bills when the debt collector comes knocking. When we run out of money and can no longer see the light over the dark clouds of debt looming on the horizon, it may be time to reach out to our friends or family to ask if we can borrow some cash.
Reasons We Might Need to Ask for Money
When rent comes up sooner than expected, or a fender bender takes a heavy toll on our bank account, money can quickly become an issue. Financial troubles are stressful, and can even result in negative impacts on other areas of our lives. The good thing is we don’t always have to weather these financial storms alone. There are often programs and people that we can reach out to in our times of need.
There is usually more than one way to keep our expenses covered.
Money troubles are commonplace, even for those of us who have a healthy stream of income from month to month.
Some of us might even be looking to build or invest in a company, or an idea that we know is going to work. The problem might be that we just don’t have enough money to make a stake the right way.
There are entire industries built around money lending and investment for individuals, companies, corporations, or countries. Everyone needs a buck to get by. No matter the reasons we find ourselves in need of cash, the priority should be or quickly become doing what is necessary to get ourselves the money we need as soon as possible.
Things to Consider Before Asking for Money
What are all of the options? Have things gotten to the point where it is necessary to borrow some money from a friend or take out a loan to make ends meet? When deciding how to ask someone for money, we must first think about our situation in detail to clearly understand how much money we need, and how we might get that money in a variety of ways.
We should take the time to draft up a budget and determine if there are any areas of life where we can cut back on our expenses. Are there any additional streams of income that might become available that could ease the burden we are currently carrying? What is the exact amount of money needed to pay all the bills that are due?
We need to have everything about our financial situation clear in our minds so that we can prepare ourselves for any questions that might come up when the time comes to ask for a loan. We will have a much better chance of success when we know where we are financially, and understand what we need to do to pay everyone back as soon as possible.
Once we have a budget and a clear understanding of how much money is coming in and going out, we can begin to consider who we will want to approach to ask for assistance.
Who Should We Ask for Money?
When thinking about who we can reach out to for a last-minute loan, friends and family are usually the first people that come to mind. They are often the people that we trust the most, and that trust us enough to discuss the delicate matter of personal loans.
When asking for a loan, we must go to someone we feel we can trust. We do not want to make ourselves too vulnerable when opening up to someone that might not have our best interest at heart. It is challenging to be honest, sometimes even with ourselves, about where we are financially and what we need to get by. This difficulty is why we look to those people in our lives with whom we feel we can confide in the most.
We must keep in mind, family and friends can also be the people that we stand to hurt the most if things go wrong or repayment is not immediately possible. We must consider what we stand to lose as much as what we stand to gain when deciding who we should ask for money.
We must think about the financial position this person may be in and ask ourselves if they can loan us the money at that moment. There is nothing wrong with asking for a loan, but we cannot allow ourselves to ask for the money at the expense of a loved one’s kindness. We must consider the awkward position we might be putting them in if we ask for the loan, and they are not able to lend us the money that we need.
Sometimes the person we know we can get the money from isn’t necessarily the best person to ask. Take the time to consider if this financial situation will put more of a burden on the relationship than it’s worth.
Who Shouldn’t We Ask for Money?
Quick check-cashing loan agencies might also come to mind when thinking about where we can get the money we desperately need. That said, we might think twice about who we are going to for help. The last thing we want to do is unintentionally sign up for more debt than with what we started. Loan agencies often charge exorbitant interest rates on even the smallest of loans.
They are notorious for throwing loan recipients into debt through the use of compounding interest rates and extenuating loan repayment schemes. Loan agencies know that we are coming to them because we are in a bad situation. With this in mind, they will do everything they can to make the most out of our financial predicament – this is where the term loan shark originates.
We need to think about our long term mental health and stay away from loan agreements that might leave us scrambling for financial support worse than before.
We want to ask people for money that we can trust. It might even help if we have long-standing relationships with them. We need to avoid asking for loans or support from friends or acquaintances that we’ve just met and must keep in mind the relative financial stability of that person so that we don’t end up pulling them into the same boat we currently find ourselves.
We must address the situation in a way that will not put the people we are going to for help in the hole.
Considering All the Options
There are a few alternatives we need to consider before deciding to ask a friend or family member to spot us with a loan. The internet has made way for new and unconventional options when it comes to making a buck.
Many crowdfunding companies have come online to assist us in making the dough that we desperately need. By signing up for accounts and creating profiles with some of the leading funding sites out there, we might be able to raise enough money to take care of that outstanding bill.
All we need to do is tap into the support that strangers are willing to offer online. We can always write a compelling story that details why we find ourselves in this predicament. We might write a blog post and create a series of interesting articles about our situation to tell our readers about what we are doing to get out of it.
There is no end to the number of people that would be interested in reading our story and supporting us with some funds along the way.
Another option might be taking stock of all the extra items we have around the house and selling those things we don’t need anymore for some extra cash in our pockets. Applications like OfferUp and LetGo allow even the most amateur salesperson to list their wares online much in the same way that eBay or Craigslist would. Locals can see what we have for sale and buy stock directly.
These sites give us an option in exchange, whether we want to meet in person for cash in hand or ship the goods along for a direct deposit. We might be surprised to find what some people are willing to pay for the things we don’t use anymore.
Preparing Ourselves to Ask
Once we have tried all of our other options, it is time to muster up a bit of courage and work on how we are going to ask for help. As mentioned above, we want to make sure that we have a clear budget with which to begin. We want to have details on everything that we spend our money on day-to-day. We need to account for all of our streams of income and know precisely how much money we need to float us into the next pay period.
We can take this as an opportunity to be honest with ourselves about the lifestyles we are currently living. We need to ask ourselves if it is feasible to continue living life the way we do with the current income we are making. If need be, we humble ourselves to a place where anyone would understand our current situation and be happy to offer some support.
It will be much harder for us to ask for a loan to pay off bills long overdue if we show up in a Ferrari wearing a gold watch. We must understand how the person we ask might perceive our situation from the outside and do what we can to present them with the most honest and humble truth possible.
Professional Tactics When Asking for Money
Here are some things that non-profit investors and venture capitalists do to prepare themselves for an ask:
- Make a list of all the people who have the capacity to invest
- Consider who are the most philanthropic or charitable on this list
- Decide whether or not the people on this list would be interested in the cause
We want to make this situation as painless and profitable as possible for all of the parties involved. We should think of all the ways that we can create more value in the loan opportunity.
We could even offer to pay interest on the loan. In this way, we can make personal loans intriguing. We must think of ways to make this loan no different than one this person might make with a bank or stock investment agency.
When is the Best Time to Ask for Money?
We want to approach our potential loan bearer when they are available and ideally when they are in a good mood. It might not be the best time to ask for money when someone is doing taxes or when they just got the phone bill.
We should take into account all of the things that might be happening in this person’s life, and approach friends or family members if and only if they are in a place of financial surplus and wellbeing. We need to understand which members of our immediate circles have expendable income. It is always a plus if they have an intrinsic interest in investing in local or kindred causes.
It may be helpful to know a friend or family member that has recently inherited some unexpected funds. Without making it seem like we are only friends for the money, we might approach them openly and honestly to explain why this small loan can and will make a big difference in a difficult time of our lives. Explain that things are only temporary and that once we can get back on our feet, we will quickly be able to return the loan in full.
Presenting a Clear and Concise Case
When asking for money, we need to be as honest and direct as possible. We can begin by explaining why we find ourselves in the current predicament. We need to be truthful about the choices we’ve made or the circumstances that have occurred to put us in this current situation.
We can show them the budget analysis that we’ve done, and detail the necessary expenditures we will have to make alongside the sacrifices to which we are committing to meet our financial obligations.
We need to convince them why this is only a bump in the otherwise smooth road. We must show our lender how we can and will mediate the situation if they can assist us with this short term patch. When people feel comfortable and have an understanding of what is happening, they will be much more willing to lend us a helping hand.
Being Honest and Humble
It will be challenging to ask someone for money and support with a mouth full of pride. It is tough to admit, not only to ourselves but sometimes even more so to others, that we are not in the best financial place at the moment. It hurts to tell someone else that we are currently broke and in need of some help to get ourselves out of a bad situation.
Nonetheless, it always helps to know that there are people that will understand what we are going through and will be willing to help us out.
Being honest and humble with ourselves and the people around us will not only allow us more success when asking for a leg up but also assist us in letting go of some of the unnecessary shame or embarrassment that might come about when needing to ask someone for money. After all, everyone needs a little help from time to time.
Explaining Our Plan for the Loan
Once we have opened up the topic of money lending with a friend, family member, or trusted acquaintance, we will want to explain why we need the money. If we have an invoice or paper bill that details the amount we owe, it would be good to bring and to present to our loan bearer when we discuss the loan amount in question.
We need to be reasonable about what we are asking for and be careful not to ask for more than they can offer; this caution is especially true for asking for more money than we will be able to pay back. We need to convince this person why this loan will turn the tide we have been experiencing toward one of our immediate success. We need them to understand why this investment in our financial future will be well worth it for both of us in the long run.
Detailing How We Plan to Pay the Loan Back
We will need to come to a fair agreement and understanding of how and when we will be paying our loan back. We should come to the table prepared with a new job or source of income that will allow us to pay the money back in a reasonable amount of time.
We want to get this person in our corner so we must convince them of, and get them excited about, our big comeback. Let them know, step by step, how we plan to use this loan to get back on our feet. We have to show them how this little loan will allow us to regain our financial stability making exponentially more income in the future. We must make sure that this person understands what we plan to do to pay them back as agreed.
Creating a Timeline for Repayment
We must set up a reasonable timeline for loan repayment. If we only need to borrow a small or modest sum, we will have an easier time agreeing on a date on which we will be able to repay the loan.
If we are planning on asking for a more significant and more substantial investment, we want to agree on a reasonable monthly or bi-weekly payment plan that will allow both parties the freedom and flexibility of repayment over time. In either case, we need to make sure that our loan contributor feels comfortable with the amount of time it will take us to pay everything back.
Offering to Provide Interest on the Loan
In this life, money makes money. We must consider what our friends or family members stand to gain if they were to take the money they are loaning us and instead invest it in the stock market.
How much more money would their investment make them sitting in the bank at a base interest rate? We want to provide our lender with adequate compensation for the time and effort they are putting into giving us a loan. If we commit to placing interest on top of our initial request, it may seem difficult for us to pay everything back.
However, this will inevitably grow our relationships and increase our ability to borrow money again or enter into other business ventures with this person in the future.
Agreeing on Consequences for Late Repayment
For every action, there are consequences. If we were to go to one of the riskier loan agencies we discussed earlier and failed to repay the said loan on time, the loan agency would no doubt hammer us with ridiculous penalties, and interest rate increases.
The burden of repayment always falls on the person signing for the loan, so why wouldn’t the same be true when we are borrowing the money from a friend or family member. We should agree with our lender on some penalties or consequences that will go into effect if we are not able to pay our loan back on time.
These consequences may seem harsh at first, but it will no doubt push us to work harder to make money for loan repayment on time. It will also give the person loaning us the money the reassurance that if all else fails, there is still a backup plan.
Drafting and Signing a Promissory Note
Once we have discussed all of the ins and outs of the loan we are requesting, it is time to put it all in writing and sign as we would for any other investment. There are a variety of promissory note templates online that we can download and use to make the loan feel all the more official.
We need to include every detail we can about the loan so that nothing is left out. Making a note of the date of our investment, the total amount we are requesting, the repayment plan that we’ve agreed upon with details on the repayment date, and consequences for late or unpaid payments.
Both parties should sign the note, and if we want to make it legally binding, we could have a third party witness sign to the document as well.
Staying True to Our Word
We have now taken care of all the steps and successfully gotten the money we need to pay our bills. The process may have been scary and stressful, but we have successfully championed the financial dilemma we were in, and it is finally over. We should now have a little bit more room to breathe and a feeling of confidence and high expectations for the future.
If we want to stay in the good graces of the people we borrowed the money from, we must pay our dues and commit to all of the work and effort we agreed to do. We must be true to our word and make sure that we do everything in our power to pay our loan back on time.
We know that we can succeed in the face of difficult times and circumstances. We looked at our debt and decided that it was no match for our strength. We have seen ourselves take matters in our own hands, doing what was necessary to prepare and take care of the bills that we had to pay. We must now keep that momentum going so that we might pay everything back and continue on our way to complete financial freedom.
