Thou Doth Saveth Thy Gold Most Admirably, Methinks
It’s amazing that the adage “the more things change, the more they stay the same,” as oxymoronic as it may sound, tend to ring true in most aspects of life. Case in point; in William Shakespeare’s Hamlet, we are treated to a scene in which Polonius is lecturing his son, Laertes, before the young man embarks on a journey to school. “Neither a borrower nor a lender be,” the old man tells his boy, offering a piece of advice that is good to this day.
Two of the best ways to save your money in today’s world are to avoid borrowing it whenever possible (use cash instead of credit, pay off large purchases like cars and houses as quickly as you can), and to avoid lending it out to others. Avoiding the use of credit saves money in interest, plain and simple.
Lending is a bit trickier. One downside to establishing any sort of a nest egg is that your friends and family often know how much money you’re sitting on. When things get tough for them, you’re the one they’re going to call. Lending money to friends and relatives is, sadly, a good way to kiss it goodbye.
This may seem like a rather cynical attitude, but it is true nonetheless. Of course anyone would want to help a close friend or family member in need of financial help and this is not to say that you can never do so. Just do it carefully. Don’t allow yourself to be taken advantage of. Make sure the borrowing party understands that you won’t allow yourself to be burned a second time (if they don’t pay you back this time) and that you’re not a bank.
Finally, when it comes to lending money, if you do find yourself not being repaid for a loan to a friend or relative, don’t freak out. There are basically two ways you can approach the situation. If you want to maintain a relationship with the person, let them know that you’re not upset, but you are disappointed. If you don’t care if you see the person every again, you probably shouldn’t have lent the money in the first place, but now you can consider that you paid a small sum to ensure that you never have to deal with them again. It will help keep you sane.