It’s getting toward the end of the month, it’s a week before pay day and your finances are spread pretty thin, but all the same, a night out or a meal, or a trip to the movies all seem appealing. Time to dip into your overdraft to take out an extra £20? Maybe. Perhaps giving your mates a call first and seeing if you can borrow a bit to tide you over is a more practical solution.

Lending money to and borrowing money from your mates can actually end up saving you a fair bit in the long run, the main reason being is that your friends won’t charge you interest – unless they are incredibly stingy – and if you consider yourself a friend, neither should you!

On the flip side, if you’re out of pocket by a tenner or so because you’ve lent some to your friends, you’ll be less vulnerable to any shop window temptations – all of a sudden that dress or those CDs in the sales, even though they’re marked down to half price, aren’t so appealing. On a tighter budget, you’ll focus your attention on more practical things – food, bills, fuel, train/tube/bus fare etc – and come pay day, your mates will be able to reimburse you, although if your friends are anything like mine, they could probably do with a reminder.

Of course, this system only really works when you’re talking about relatively small amounts of money which you know both parties will be able to realistically pay back at the end of the month – anything outside nominal limits will invariably lead to arguments and people falling out.

However, borrowing a couple of notes off of a friend, if they can spare it, could see you avoiding paying up extra monthly fees on a credit card or overdraft – just make sure you do the same for them.

This entry was posted on Sunday, April 13th, 2008 at 1:21 pm and is filed under Savings. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.