The Money Mustache Community
Around the Internet => Antimustachian Wall of Shame and Comedy => Topic started by: Lia-Aimee on May 17, 2017, 04:21:41 PM
-
Didn't want to derail the other lending money thread.
What about when you're asked to lend money and you fully support "the cause" ?
I've always had more good fortune with money compared many people around me - middle-class kid in a low-income town, pretty much have been overpaid for the nature of my work since I was 15, have an affluent spouse. I also strongly value generosity; that, coupled with some type of survivors guilt I'm sure, leads me to make a decent number of financial gifts (I typically follow the give, don't lend philosophy.)
Obviously multiple factors go into deciding whether or not I'm going to give a financial gift, but my relationship with the person, their privilege relative to mine, and their likelihood of paying it forward (not necessarily financially) are usually the chief determinants. I then usually set a (somewhat arbitrary) annual limit to what amount I'll gift to others (would make exceptions for immediate family emergencies.)
But then sometimes I get requests which I want to refuse, somewhat irrationally.
In the last 6 months, I've had a friend (not an extremely close friend, but she's a sweet girl) "borrow" around 50% of this annual limit. She grew up with little family support/ in foster care and is trying to build a business (she works hard at it - it's one with great potential upside but hard to break into) and has young children. So realistically, a solid 2/3 by my metrics. But I've met her for brunch or happy hour several times in the last 6 months - luxuries I've only allowed myself in the last year and a half after reaching an extremely solid financial footing - and as such started saying no to additional requests since I noticed myself getting a bit resentful (even though I just got back from a European trip myself, and bought my sister $100 worth of makeup for Mothers Day.)
So when do you decide how to lend/give money and what is a good reason?
-
Basically, if I have the money, I'm happy to give (I rarely lend, but some people pay me back anyway). My only real rules are that it's used for a need, not a want, and that I don't give to the same people twice (two exceptions: my family, who I trust completely, and my unofficial daughter).
I tend not to offer money to people I know have spendthrift habits.
-
I've never lent money, other than spotting a friend for something if they didn't have cash on them and the place only takes cash.
If I do ever do it Im the type that would write up a contract and everything, with interest, probably ask for collateral, lol
Maybe I am just a motherfucker. Oh well.
-
I only lend money I'd give as a gift. If it gets paid back, it's a happy accident.
-
So this is essentially my "lending" life. I'm the oldest of 7! and hubby has 1 younger brother. Until very recently, all these younger siblings pretty much sucked at money and would find themselves needing loans for various reasons I either agree or didn't agree with. All good people, good kids, not necessarily "spendy" even, they just go along with their lives spending 95-100% of their incomes like everyone has told them.
But I digress. Basically, hubby and I evaluate requests for loans as they come in and what the reason is. And like you, if we support the "cause" and we have the money, then usually we go ahead with it. If they pay it back, fabulous. If not, we never "lend" more than we can afford to consider a gift that we can give without bitterness if it's never repaid. To date, all these loans have been repaid, although there was 1 or 2 that literally came back to us so longer after the original lending date, that we had utterly written it off and forgotten.
I try not to evaluate the siblings other purchases during the same period in either a negative or positive way. Because let's be realistic here, the vast majority of society is telling them they are doing fine. And I'm not here to convert people to 1) conservative frugality, which is what I would say hubby and I were doing before I found MMM or 2) Mustachianism, far superior to even what we did previously. You'd drive yourself crazy doing that because most people don't have the insight that hey if I didn't buy this latte every morning, I wouldn't have ever needed to ask big sis for cash to cover *insert emergency/need here* that my own savings was inadequate for.
Also OP, she may be asking you out to brunch etc as a way to show her gratitude. Because to her spending money to socialize is showing appreciation.
-
Didn't want to derail the other lending money thread.
What about when you're asked to lend money and you fully support "the cause" ?
I've always had more good fortune with money compared many people around me - middle-class kid in a low-income town, pretty much have been overpaid for the nature of my work since I was 15, have an affluent spouse. I also strongly value generosity; that, coupled with some type of survivors guilt I'm sure, leads me to make a decent number of financial gifts (I typically follow the give, don't lend philosophy.)
Obviously multiple factors go into deciding whether or not I'm going to give a financial gift, but my relationship with the person, their privilege relative to mine, and their likelihood of paying it forward (not necessarily financially) are usually the chief determinants. I then usually set a (somewhat arbitrary) annual limit to what amount I'll gift to others (would make exceptions for immediate family emergencies.)
But then sometimes I get requests which I want to refuse, somewhat irrationally.
In the last 6 months, I've had a friend (not an extremely close friend, but she's a sweet girl) "borrow" around 50% of this annual limit. She grew up with little family support/ in foster care and is trying to build a business (she works hard at it - it's one with great potential upside but hard to break into) and has young children. So realistically, a solid 2/3 by my metrics. But I've met her for brunch or happy hour several times in the last 6 months - luxuries I've only allowed myself in the last year and a half after reaching an extremely solid financial footing - and as such started saying no to additional requests since I noticed myself getting a bit resentful (even though I just got back from a European trip myself, and bought my sister $100 worth of makeup for Mothers Day.)
So when do you decide how to lend/give money and what is a good reason?
We aim for 10-15% of AGI in charitable donations, and both donate an equal amount to charities of our choosing each month, typically guided by charity navigator. The good reason is the fact that we live in the richest country on the planet and have the power to literally save lives by simply hoarding a little less each year.