Is lending money to friends risky for my finances?

Yes, lending money to friends can be risky for your finances, mainly because it can mess up your cash flow and your relationships at the same time. Even if the amount is “small”, it can hit you when your own EMI, rent, or emergency comes up, and asking for it back becomes awkward. Many times repayment gets delayed with “next month pakka” types, and you end up adjusting your budget. If you still want to help, lend only what you can afford to lose, fix a clear return date, and avoid funding someone’s EMIs or credit card bills unless you’re ready for delays. Better option is to help in non-cash ways or split support into smaller parts so your finances stay stable.