After one college football fan’s approach to getting beer money via Venmo was nationally televised on a game day, the idea of lending or gifting money to family and friends digitally is back in the news.
Clark’s two rules for lending to family and friends
Some 25% of Americans received monetary assistance from family or friends during the prior year, according to data from the Pew Charitable Trusts’ Survey of American Family Finances and the Panel Study of Income Dynamics at the University of Michigan Institute for Social Research.
The median amount of assistance? A whopping $1,000! That’s according to a sampling of 7,845 people that Pew pollsters spoke with. One thousand dollars is not small change! So how you should the request for money if it comes your way?
Clark has long had two rules about lending money to family friends. One, treat it as a one-time only thing. And two, treat any money you lend as a gift, rather than as a loan. That way if you do actually get paid back, it’s a happy surprise.
Venmo has an easy solution
One way to make borrowing and lending among family and friends easier comes from Venmo. With their new product called Ledge, the company lets a borrower create a campaign explaining their situation and then share it with friends. Money can then be pledged from your social network to fund your loan.
Interest rates are restricted in accordance with state usury laws, so they’re not back-breaking. In fact, the interest rate is actually chosen by a borrower based on what they can afford. And best of all, Ledge reaches into the borrower’s account on a monthly basis and pays the creditors back automatically. So you don’t have to have any difficult conversations about payback!