Dear Reader,
Can I talk to you about something? It’s been bothering me for a while and I think it’s time to discuss it. See, I’m concerned because it seems that we are continually making the same mistakes over and over again. We’re supposed to learn from our own mistakes and/or the mistakes of others, but I on’t think we are listening. I’ll just cut to the chase. It’s the reasons why we end up in small claims court.
See, over the last few years, small claims court reality television shows have swept the nation settling all types real life disputes. I don’t have a particular issue with these shows, they are actually very entertaining. But to be honest, I think you’d rather avoid standing before Judge Judy or Judge Milian.
But what I find interesting is that the cases are mostly the same, just different faces. It can be a bit tricky, but there are ways we can avoid most of the drama in our lives. I thought I’d write a about a few ideas I think you will find beneficial and maybe save you the trouble of having to go to court.
NEVER Co-sign for a loan
You co-sign a loan for a friend or family member because they can’t get the loan on their own. They have good intentions. Matter of fact, they even promised they would pay the bill on time. They don’t mean to be late with the payments, but life happens. They don’t mean to default on the loan, but the payment is too much for them to handle. Their actions directly affect your credit and your future. It all boils down to this, either just say no OR be prepared to make the payments if they can’t.
Read ALL Contracts Prior to Signing
I read a crazy statistic the other day. It said that only 10% of people read contracts prior to signing. 10%! Contracts can be as complicated as a making home purchase or it can be as simple as understanding the store policy when buying a cup of coffee. You must have a clear understanding of the terms just in case you have a change of heart. We are entitled to change our minds, but at what consequence. Just take that into consideration.
Avoid Loaning Money
I’ve not had this problem, thankfully, but I know of a few who have. It’s a nightmare. Your word against theirs and broken promises. You risk ruining the relationship over money. I know it’s hard to say “NO”, but it may be better than bearing the expense of saying “YES”. If you can’t afford to give it, then it may be best not to loan it.
Now maybe you have no way to avoid loaning the money. You could have them sign a promissory note which would include all the terms of the loan (parties involved, amount loaned, interest rate, payment schedule, signatures, etc.) In the event that you would have to resort to small claims, the promissory note is considered as a written contract.
Document Accidents
The best way to handle an accident is to exchange personal information with all parties involved and be sure to get an accident report. The report helps the insurance company determine who, if anyone, is at fault and will help to alleviate any future story changes.
To give an example: In my early twenties, I was in a minor fender bender and was offered cash on the spot to “keep it moving”. Can you guess what I did? Yes, I took the money. But let me explain…It was only a minor scratch. Looking back now, I realize that I should have reported the accident. I could have made a horrible mistake in accessing any possible internal damages. My young eyes were not trained for that sort of thing. But, you live and learn.
***
Not every scenario will fit within these four boxes, but most will. We’re given opportunities daily to make better judgments. Minimizing risky outcomes is up to us.
Does all this make sense? Have you encountered any of these scenarios? How did you handle it? Share your thoughts in the comments.
###
Thank you so much for reading! Please feel free to share this article with your family and friends. This website is becoming a success because of you and your support. I wish you lots of financial success. I send you much love!
- Join PFN on Facebook!
- You may also share this article on Facebook by using the fshare button.
Gavel Image by scottamus
{ 6 comments… read them below or add one }
Oh I am a stickler on this one. When someone that is non-family wants to borrow money (not that I have a lot) I always pull of a sheet of paper and begin drafting a contract and all of a sudden they no longer need to money. Hmmm….I will not be played for my cash, I waste it by myself thank you very much…LOL
When I was working I would hear all the time about co-workers and roomate drama and I would always ask, what do you have in writing? They’d look at me like, you don’t ask friends to sign contacts. Whatever!!!!!
LOL! You are so funny, Ms. Freeman. I know…people tend to get amnesia once you’ve helped them get past their moment of crisis. I agree, I’d rather be safe than sorry.
Maybe it’s because I grew up in New York, maybe it’s because my family tries to hustle each other, but whatever it is, I ALWAYS try to cover all angles. Documentation is always useful and holding on to emails when trying to settle disputes always seems to work. I have pulled various emails I have archived to dispute with cable companies, airlines, car rental businesses, etc.
I always belive in C.Y.A. (cover your a**). This translates well at work too.
I love the C.Y.A. It’s definitely a headache to keep paperwork, but it’s a must. And you bring up a good point…cable companies, airlines, car rentals, etc. Everyone is not honest and if you are not paying attention, it can cost you. Thanks Nell!
Worse than you I had a woman admit to hitting my fender in a parking lot. She gave me her phone number (long distance)….I lost it 2 days later. Not smart. Live and learn.
Yeah..that one takes the cake. And it’s awful. That number should have been guarded with your life, LOL! Yep, valuable lesson learned. Thank you so much for sharing Ken.