Saying no to a friend or family member who asks for a loan can be stressful and awkward.

Yet sometimes no is the best answer, and the one you should give. The question then is how to say it without damaging your relationship with that person or others who might be involved in the situation. Here is how:

LISTEN FIRST. If you say no too quickly, your friend or family member might feel ignored, hurt, discounted or insulted. Before you give your response, hear the person out so you understand the nature of the problem and the person feels respected and cared for.

ASK FOR TIME. If you feel pressured to say yes, offer to think about your decision for 24 hours. During that time, your friend or family member might change his or her mind, find another solution or borrow the money from someone else. Meanwhile, you will be able to firm up your resolve and steel yourself to say no. If you need support, ask your spouse or another trusted friend, relative or advisor to help you.

MAKE A RULE AND STICK TO IT. One way to say no is to explain that you or you and your significant other have a rule against lending money. This way of saying no comes across more generalized, rather than being personal to the individual who asked. Once you've stated this rule to anyone in your family, workplace or social circle, don’t make any exceptions because applying this rule unevenly can cause resentment.

BE FIRM. Don’t delay your response longer than one day. Don’t say maybe. Don’t sound as if you’d like to help, but just won’t for some vague reason. Don’t suggest that no today might turn into yes tomorrow or next week. Just say no, and stick to that one simple and final answer.

DON’T EXPLAIN OR MAKE EXCUSES. When you say no, don’t offer explanations or excuses. Doing so only opens the door to a discussion and prompts your friend or family member to try to overcome your objections. Say, “I’m sorry, but I can’t give you a loan.” When the person asks, “Why not?” just repeat your statement. Eventually, your friend or family member will stop asking.

OFFER OTHER AID. Rather than make a loan, you might be able to assist the person in some other way such as with a bag of groceries, transportation to a job interview, a sofa to sleep on for a few nights or other possibilities. Try to get creative. If you feel the need is genuine and reasonable and that money is the only option, then make the sum a gift instead of a loan. If you don’t expect repayment, you might be pleasantly surprised to receive it someday.

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