Part 4/7:
Additionally, co-signing can negatively affect one's debt-to-income ratio. When considering future borrowing opportunities—such as a mortgage—lenders assess all debts held by an individual, including those of co-signed loans. Even if the primary borrower is diligently making payments, the co-signed loan may still be viewed as an obligation, further complicating the individual's financial situation.
Loaning Money to Family and Friends
The second financial boundary involves refusing to loan money to family and friends. This choice often stems from the natural tendency for relationships to change once money enters the equation. When one person owes money to another, it inevitably alters the dynamics of their relationship, leading to feelings of tension and resentment.