When considering lending money to friends and family, it’s wise to approach the situation as if you’re giving a gift. This mindset might be challenging for larger loans, but it significantly reduces stress. It helps manage expectations and preserves relationships, regardless of the loan’s outcome. Only lend an amount you’re comfortable never seeing again. If the borrower repays you, it’s a pleasant bonus, but if not, you’ve already mentally accounted for it as a gift, avoiding potential financial strain or personal conflict, and the borrower avoids feeling guilty about not returning the full amount.