In tough economic times, money and friendship don’t always mix

Tough economic times are making it even tougher for people to borrow money from the bank, leaving many people turning to family and friends to help fix their finances.

But in this afternoon’s Consumer Watch, Samantha Hayes says you shouldn’t be so fast on handing out your cash.

You’ve heard the old adage, money and friendship don’t mix. 

But with millions of Americans hit hard by the recession’s wrath, and banks tightening their lending, you may find it hard to say no to a friend, or a family member, in need. 

Whether approached for fifty dollars or five thousand, it’s crucial to stop and think about your finances first.

If you do lend, draw up a formal agreement that clearly states terms of repayment. 

It’s also perfectly polite to say no, or ask your borrower to pay up.  Because the loan may be a personal favor, but it’s still business.