Question

Why should you not lend or borrow money from a friend?

1) Because your friend may avoid paying you back
2) Because you may fall out of your savings
3) Because you may lose both your friend and your money
4) Because it is not a good financial decision

Answer 1

Lending or borrowing money from a friend can be risky due to potential repayment issues, depletion of personal savings, strained relationships, and overall poor financial decision-making.

Step-by-step explanation:

Lending or borrowing money from a friend can be risky for several reasons:

1. Your friend may avoid paying you back: When borrowing money from a friend, there's a chance that they may not be able to repay the loan. This can strain your relationship and lead to tension and resentment.
2. You may fall out of your savings: If you lend money to a friend, you may deplete your own savings or emergency fund. This can put you in a financial bind if you need the money for your own expenses.
3. You may lose both your friend and your money: Money can create conflicts in friendships. If you lend money to a friend and they don't repay it, it could damage the relationship beyond repair, resulting in the loss of both money and friendship.
4. It is not a good financial decision: Generally, it is best to separate personal relationships from financial matters. Lending or borrowing money from a friend can lead to complications and financial strain, making it an unfavorable decision.