This story is part of So Money (subscribe here), an online community dedicated to financial empowerment and advice, led by CNET Editor at Large and So Money podcast host Farnoosh Torabi.

To loan or not to loan? Lending money to a loved one can be fraught with difficulties, and often you run the risk of hurting both your wallet and your relationship. 

In order to avoid misunderstandings or resentment, it's important to ask the hard questions, prepare a plan of action and establish a mutual understanding, no matter what you ultimately decide.