“I’ll pay you back later” is an all too common phrase heard during our daily course of life. Whether it’s a friend who is short on cash or a family member who is starting a business, we all know that many times the people forget about the loan. So, how can you get your money back without ruining your relationship?

The first thing to do is set limits. Never lend money that you don’t have or any amount that will cause you to lose sleep at night. If you have credit card debt or other debt, you should focus on improving your own situation before helping others or you will only compound your own problems. Honesty is best and you can get out of these loans by simply telling them “Sorry, I wish I could help, but money is really tight right now for me too”.

The second thing to remember is to put big loans in writing. A loan greater than $100 may be worth writing a contract on paper for stating how much was borrowed, who owes what money, and when it needs to be paid back among other things. These contracts can be made legal through the use of a notary who can certify that both parties were present and agreed to the terms.

Interest may also be appropriate as the money could be making savings rate in a safe location. For example, a low 4% interest rate may be appropriate to encourage repayment. If they complain about such rates, it may be a good sign that you shouldn’t be loaning to them in the first place. In the end, it is important to just be careful when lending to friends and family as it can often become a touchy issue.