Factoring Personal Loans Into Your Budget
When preparing a personal budget you must consider every expense to have a clear picture of your financial situation. One item most people fail to consider is personal loans. For this example, we are considering a personal loan as money you have borrowed from friend or family member. We have no problem considering everything from rent or a mortgage payment to credit cards and auto loans. However, unless a person is very responsible and honest, personal loans are usually considered a low priority and are often paid back slowly if ever.
Maybe your friend or family member loaned you money with the understanding that you were in a financial bind to begin with and has told you to take your time in paying it back. How many have heard the saying, “The best way to lose a friend is to loan them money?” I’ve experienced personal situations in my life where relationships have gone sour over money lent to another individual. A financial obligation, whether it’s legally binding or accepted via the honor system, is still an obligation and should still be considered a legitimate expense.
The point is to establish a habit of taking care of those expenses you are responsible for. The lost art of closing a deal with a handshake is a lost art for a reason. Too many times have individuals not met their obligations to others only causing hard feelings along with hardships for the lender. A bad credit rating is one thing but can be repaired over time. A bad name however….isn’t so easily repaired. Just food for thought.
