“How should people react if a family member or friend asks to borrow money, and how much is too much?”

“Danger, Will Robinson!” Like Lost in Space’s Robot, complete with arms flailing.

Money is a top-three cause of the demise of relationships that include sex and can just as quickly end friendships where there’s no hanky panky. (And then there’s “friends with benefits”. Tell me, do they ever end well?)

Friend/family loans that morph into disputed, unpaid, interest-free, angst-filled, lines-of-credit that are written off along with the relationship are far too common.

I think the important questions are: What’s the money for? For how long? Would total non-repayment cause you financial distress?

It’s no killer if it’s $100 for a few shouts. Helping cover a flatmate’s rent for $1000? (Particularly if failure to do so would also see you homeless.)

How about $10,000 to cover a “sure-fire investment opportunity”, an engagement ring for the on/off boyfriend you hate, or to cover his gambling debts?

Despite the GFC, bank personal loans are still available. Or are they already loaded to the eyeballs with dumb debt? If so, what priority would you be if things got really tight?

Ultimately, it’s about the personality you’re lending to. If you know them well enough to know that owing you money would play on their minds, then maybe they’d be a good bet.

Heck, if it turns sour, there’s trade-offs and blackmail? Threaten to ask the older brother/younger sister out. Know a deep teenage secret that their mum would love to know?

Bruce Brammall is the author of Debt Man Walking (www.debtman.com.au) and a licensed financial adviser.