Most of us have been approached at some time by either a family member or a friend that wants / needs to borrow money for one reason or another. I am going to teach you how to handle these situations. Repeat after me..."NO! "
It's that simple really, just say "no". It may cause you an argument now but at least you will still have your cash. To say yes will only postpone the argument (and it will come when you don't get repaid) and then you will lose not only a friend but your cash as well. If you must say yes, be sure to get something in writing that details when you will get repaid, interest charged, and any late fees that may accrue due to a late payment. I know many people will say charging interest on a loan to family or friends is just evil but hear me out, at what time did you become a bank? Loans come from banks and if I am going to be treated as a bank, I am going to charge interest on a loan just as every bank in America would.
Let's think about the situation further, You as the lender are being asked to loan your hard earned money to someone without a credit check or any collateral. These are things all banks would require to even consider giving a loan. If you were not to loan this money, you could conceivably keep it in an interest earning account, thus by loaning the money and not charging interest, you actually lose it's potential to grow larger.
As you start to accumulate savings, your family and friends with less than perfect spending habits, will start to view you as a bank. DO NOT let their habits become your problems.