How to Stop Friends and Relatives from Borrowing Money

I'm Jan Dahlin Geiger, CFP®, MBA , author of "Get Your Assets in Gear! Smart Money Strategies." A Certfied Financial Planner™ practitioner since 1988, I've been quoted in the Wall Street Journal, MSN Money, USA Today, Reader's Digest, and SmartMoney Magazine. I have been on the board of directors of the Financial Planning Association (Atlanta chapter) and practice as a fee only planner with a Registered Investment Advisor firm. Additionally, I am the financial expert on the cable TV show, "Living Life With Style" on WCTV-24 in Atlanta and the internet radio show "Wall Street Chic."

Preventing friends and family from asking to borrow money is really, really easy. Just say no. It is no different than training children. Children will always ask for what is going to bring immediate gratification. They only way they stop doing this is to hear no over and over again. Friends and family will only ask to borrow if you say "yes" and reinforce that behavior.

If you have been saying yes in the past and now want to start saying no, here are some ideas to try to get through the transition.

1. Joe and I (Mary and I) have discussed this and we have agreed that we are not yet in a financial position to be providing loans at this time. (Then shut up! Do not explain, do not get them to buy into your logic. Just say no politely.)

2. I'm sorry, we can't do that, but I'll be happy to help you prepare a loan application for the bank/credit union.

3. I'm sorry, we can't do that, but I'll be happy to help you find a reputable credit counselor who can help you set up a plan to get out of debt.

4. I'm sorry, we can't do that, but I'll be happy to help you work on a spending plan that will work for you.

5. I'm sorry, we can't do that. I understand you are desperate right now, so we'll be happy to help you find a soup kitchen that can feed you or a church that could provide clothes or emergency shelter (or whatever the need is).

My husband and I are the most affluent in our families (by far) and no one asks for loans any more because they already know the answer is no. They already know we will offer to help them learn to fish, but we will never hand them a fish.