Author Topic: Giving Money to Friends- Can I ask about personal details?  (Read 1917 times)

tungsten

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Giving Money to Friends- Can I ask about personal details?
« on: January 30, 2019, 06:27:18 PM »
I'm happy to help out friends in need of money, sometime I do it anonymously and always with no expectation of payback and no strings attached.  It's been for things like dental bills or medical stuff, sometimes tax bills, unexpected car issues and the like.

Do I have the right to ask about the circumstances which have found them short on cash in the first place?  People idealize 'giving without judgement' which I think is good, but I feel like if you're at the point where you are asking me for free money, I should be able to at least ask about where all yours is going. 

I feel like bailing people out is a futile short term solution if the root cause is actually behavioral.  I went through my own transition from spendy and broke to ultra frugal, so I know it can be done.  Socially, however, it seems rude and intrusive to offer financial advice or ask for financial visibility from those who are requesting money.

Have you given money to friends? What do you think?

frugalecon

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #1 on: January 30, 2019, 06:35:12 PM »
I have experience helping folks out, and I even reached out to this community for advice on a particular case. (https://forum.mrmoneymustache.com/welcome-to-the-forum/advice-for-unemployed-64-year-old-friend/) In my experience, I have generally known why the person was broke, so this question was not really at issue. But I have found that people tend not to react well once questions start being asked or suggestions made. It can get turned around so that you are the bad guy. YMMV

Freedomin5

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #2 on: January 31, 2019, 02:51:42 AM »
If they’re bold enough to ask me for money, they need to be humble enough to tell me why they need the money and to accept more cost-effective but equally acceptable solutions. I don’t need to know all the minute details, but I do need to know in general why they can’t cover the cost themselves.

As soon as they approached me for money, the whole notion of being rude and intrusive went out the window.

reeshau

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #3 on: January 31, 2019, 03:33:34 AM »
If they’re bold enough to ask me for money, they need to be humble enough to tell me why they need the money and to accept more cost-effective but equally acceptable solutions. I don’t need to know all the minute details, but I do need to know in general why they can’t cover the cost themselves.

As soon as they approached me for money, the whole notion of being rude and intrusive went out the window.

I didn't read that the friend actually asked--they just made the OP aware.  I could imagine this could have been through a close conversation, or just griping.  It would be hard to give anonymously to someone who asked.

I don't think money gives you the right to ask, or makes it appropriate.  Being a friend does, or can.  (meaning, maybe the advice is all you yourself can give--although as Dave Ramsey says: "don't take money advice from broke people.")  If you feel it would be appropriate if a gift was not on the table, then go for it.  If you don't think they would appreciate your opinion without your money, then introducing them together may spoil your gift in their eyes, and be more damaging than it's worth.

Freedomin5

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #4 on: January 31, 2019, 03:58:33 AM »
If they’re bold enough to ask me for money, they need to be humble enough to tell me why they need the money and to accept more cost-effective but equally acceptable solutions. I don’t need to know all the minute details, but I do need to know in general why they can’t cover the cost themselves.

As soon as they approached me for money, the whole notion of being rude and intrusive went out the window.

I didn't read that the friend actually asked--they just made the OP aware.  I could imagine this could have been through a close conversation, or just griping.  It would be hard to give anonymously to someone who asked.

I don't think money gives you the right to ask, or makes it appropriate.  Being a friend does, or can.  (meaning, maybe the advice is all you yourself can give--although as Dave Ramsey says: "don't take money advice from broke people.")  If you feel it would be appropriate if a gift was not on the table, then go for it.  If you don't think they would appreciate your opinion without your money, then introducing them together may spoil your gift in their eyes, and be more damaging than it's worth.

In OP’s post, it says “ if you're at the point where you are asking me for free money...”. I assumed they asked.

DadJokes

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #5 on: January 31, 2019, 10:33:22 AM »
I've only been in this situation once. We gave a couple $500 to keep their car from getting impounded, but we added strings, namely that they attend Dave Ramsey's FPU class (which we also paid for) and that they not miss a class. We did ask details, but more as friends than to judge them. We also gave some suggestions on ways to bring in a little extra money as well.

If someone is asking for help, you have the right to ask about details and even add stipulations. Conversely, they have the right to refuse those stipulations or giving out information by turning down the money. It sounds dangerously close to controlling people with your money, but the difference is the attitude you take toward giving the money and how extreme the requirements are.

tungsten

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #6 on: January 31, 2019, 10:57:22 AM »
Quote
It sounds dangerously close to controlling people

That's the biggest issue.. It's one of those hard situations with no easy answer.  The last thing I want to do is jeopardize a friendship while only trying to help.

six-car-habit

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #7 on: January 31, 2019, 11:00:06 AM »
 "  It's been for things like dental bills or medical stuff, sometimes tax bills, unexpected car issues and the like. "

 These are not $20 issues.  These are all issues that are easily $200 plus.   
 
  After taxes, etc.-  I could easily work 10+ hours to net $200 in my pocket, at my payrate.
 Is it fair for me to work 10 hours to support their consumer costs without knowing the reason why they are in this situation ??
 I'm with Freedomin5 on this one.

Boofinator

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #8 on: January 31, 2019, 11:34:50 AM »
From personal experience, if friends are apologetic that they actually have to borrow money from you and promise to pay it back immediately, than it might be a worthwhile endeavor to lend them some money. Otherwise, I highly do not recommend lending anyone money without a contract that they pay it back with interest (i.e., bonds).

“Lend money to an enemy, and thou will gain him, to a friend and thou will lose him.” -Mr. $100 Mustache

Lady SA

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #9 on: January 31, 2019, 12:05:22 PM »
Maybe in these sorts of situations a bit of subtle "coaching" to influence them to attempt to fix the situation on their own before you agree to throw money at their problem. Guide them with questions to see if there is anything they could do first to help themselves, and keep bringing the focus back to what they themselves can do. Only after you have exhausted all your options, then I would offer money.

"Hey tungsten, I need money. Can you give me some?"
"Why do you need it?" <--note how you don't say right off the bat "sure!". You answer their question with your own question.
"...well, if you must know, I need to pay my car repair bill, and I'm broke."
"Ah, I see. Sounds tough and stressful." <--observe and name what kind of impact their lack of planning is having on them, and leave it there for them to react to. Don't commit to anything here.
"Yeah, it really sucks." <--there, they've agreed that it is stressful for them. You can use this later!
"Well, what have you tried to do so far to pay your bill?" <--basically, the idea is to refuse to throw money at the problem until they have at least demonstrated an attempt to help themselves. But you ask this in a kind, curious way, and usually people won't register this as a "rude" question, they will experience it as genuine caring.
"Well... nothing. I just don't have any money to pay it."
"I hear you. But do you have two ideas on how to solve this? I can help you brainstorm."
"Well, my only idea is to borrow money, which is why I'm asking you."
"Ah. But I'm sure you have overcome something like this before. What else could work?" <--encouraging!
"... Maybe... I could call the mechanic and ask for a payment plan."
"Awesome! I think that could help a lot. What else? A combo approach with a few different strategies might help you feel less stressed. Perhaps you have a way to free up some cash in your budget temporarily?"
*indignant* "Rude! Who asked you?"
"Sorry. It was a thought I had, that I thought could be helpful. What about my idea wouldn't work?"
*sputters* "I'm paycheck-to-paycheck as it is! Where would I possibly be able to cut $200? The notion is absurd!"
"I hear you. And I know $200 is a lot of money, its hard to squeeze water from a rock. But even a little bit helps. If you'd like, I could help you go over your budget."
"No thanks."
"Do you think that you might be surprised by expenses like this in the future? This bill might be tough, but I wonder if there is a way you could plan for these types of things so they aren't so stressful on you." <--very sympathetic here! You want to help them solve their problem and feel better! (but by them saving themselves, not you giving them money if at all possible)
*blank look* "I'm not sure. That sounds so abstract, and I don't know how I could possibly plan for that."
"Well, let's just assume that sometime in the future, you will need your car fixed again. How do you want that situation to go next time? What would make things easier for you that time around?"

etc etc

Basically, you know this person best. Try to guide them towards problem solving, and not dwelling too much on woe-is-me. Just keep redirecting back to positive, problem solving territory: "Well what have you tried?" "What else could you try?" "What about X?" "What would make this situation easier for you the next time it happens?" "What do you want to be different next time?"
But if you are close to this person and are happy to help out (as you say in your OP), then at the end, after exhausting the rest of the avenues and they are still coming up short, you can offer to cover the difference. But you really want to see them try to make progress on their own first, and you are helping them exercise their problem solving muscles so they can hopefully become more self-reliant. So even if at the end they are getting money, at least they will have gotten a bit of a mind exercise over how they can do this themselves next time.

iris lily

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #10 on: January 31, 2019, 12:20:37 PM »
 I purposely did not have children, and I do not wish to be anyone’s mother. Therefore, I don’t really want the responsibility of Finance coaching. I don’t need to knowndetails of my friends’ finances because I see where they are throwing money away in big ways.

I have, over the years, given money only a couple of times to people who are my friends;  they spend money a bit foolishly but they were in need.  I gave it with no expectation that it would ever come back, it was  a gift not a loan.

 I have a new friend who is always living on the edge. And I know some of her ongoing costs,  they are silly. When she chose a restaurant for us to lunch,  it was the best seafood restaurant in the city. It was  $25 for a lobster roll. In this town that is how much lobster rolls are when they’re prepared by the best. Problem is, I can afford the best, she cannot. But whatever

slappy

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #11 on: January 31, 2019, 12:21:39 PM »
I did give money to a friend once. Her brother had died, and he was relatively young. That's the only time, and it was years ago. How is it that you know so many people in need of money and you have the resources to help them all? I know you say you do anon but is it possible that you are somewhat of a target?

Boofinator

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #12 on: January 31, 2019, 12:25:49 PM »
I did give money to a friend once. Her brother had died, and he was relatively young. That's the only time, and it was years ago. How is it that you know so many people in need of money and you have the resources to help them all? I know you say you do anon but is it possible that you are somewhat of a target?

Exactly. A friend would pay back the money as quickly as possible. Anybody you've lent money to that hasn't paid you back I would not categorize as a friend.

frugalecon

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #13 on: January 31, 2019, 03:21:10 PM »
Maybe in these sorts of situations a bit of subtle "coaching" to influence them to attempt to fix the situation on their own before you agree to throw money at their problem. Guide them with questions to see if there is anything they could do first to help themselves, and keep bringing the focus back to what they themselves can do. Only after you have exhausted all your options, then I would offer money.

"Hey tungsten, I need money. Can you give me some?"
"Why do you need it?" <--note how you don't say right off the bat "sure!". You answer their question with your own question.
"...well, if you must know, I need to pay my car repair bill, and I'm broke."
"Ah, I see. Sounds tough and stressful." <--observe and name what kind of impact their lack of planning is having on them, and leave it there for them to react to. Don't commit to anything here.
"Yeah, it really sucks." <--there, they've agreed that it is stressful for them. You can use this later!
"Well, what have you tried to do so far to pay your bill?" <--basically, the idea is to refuse to throw money at the problem until they have at least demonstrated an attempt to help themselves. But you ask this in a kind, curious way, and usually people won't register this as a "rude" question, they will experience it as genuine caring.
"Well... nothing. I just don't have any money to pay it."
"I hear you. But do you have two ideas on how to solve this? I can help you brainstorm."
"Well, my only idea is to borrow money, which is why I'm asking you."
"Ah. But I'm sure you have overcome something like this before. What else could work?" <--encouraging!
"... Maybe... I could call the mechanic and ask for a payment plan."
"Awesome! I think that could help a lot. What else? A combo approach with a few different strategies might help you feel less stressed. Perhaps you have a way to free up some cash in your budget temporarily?"
*indignant* "Rude! Who asked you?"
"Sorry. It was a thought I had, that I thought could be helpful. What about my idea wouldn't work?"
*sputters* "I'm paycheck-to-paycheck as it is! Where would I possibly be able to cut $200? The notion is absurd!"
"I hear you. And I know $200 is a lot of money, its hard to squeeze water from a rock. But even a little bit helps. If you'd like, I could help you go over your budget."
"No thanks."
"Do you think that you might be surprised by expenses like this in the future? This bill might be tough, but I wonder if there is a way you could plan for these types of things so they aren't so stressful on you." <--very sympathetic here! You want to help them solve their problem and feel better! (but by them saving themselves, not you giving them money if at all possible)
*blank look* "I'm not sure. That sounds so abstract, and I don't know how I could possibly plan for that."
"Well, let's just assume that sometime in the future, you will need your car fixed again. How do you want that situation to go next time? What would make things easier for you that time around?"

etc etc

Basically, you know this person best. Try to guide them towards problem solving, and not dwelling too much on woe-is-me. Just keep redirecting back to positive, problem solving territory: "Well what have you tried?" "What else could you try?" "What about X?" "What would make this situation easier for you the next time it happens?" "What do you want to be different next time?"
But if you are close to this person and are happy to help out (as you say in your OP), then at the end, after exhausting the rest of the avenues and they are still coming up short, you can offer to cover the difference. But you really want to see them try to make progress on their own first, and you are helping them exercise their problem solving muscles so they can hopefully become more self-reliant. So even if at the end they are getting money, at least they will have gotten a bit of a mind exercise over how they can do this themselves next time.

It seems like this sort of exchange could devolve into a game of "YesBut," as @TheGrimSqueaker has explained in other threads.

zolotiyeruki

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #14 on: January 31, 2019, 04:15:25 PM »
My reaction is this:  are you a friend, or are you a lender?  If you're a lender, then absolutely you have the right to poke around their finances.  If you're truly a friend, then I feel like you should have the right to ask about hardships in their life, regardless of money.  It's when you combine the two that it gets touchy.  Personally, if they're asking you as a friend to borrow money, and they're not willing to share the details and/or accept advice, then there's a good chance they're trying to use your relationship as leverage to get money from you.
It seems like this sort of exchange could devolve into a game of "YesBut," as @TheGrimSqueaker has explained in other threads.
There are three kinds of financial emergencies that we generally see around here.  The first is a cash-flow problem, i.e. "we live below our means, but something came up and we don't have enough to pay for it this month, but we'll have enough to cover it next month."  The second type is a living-beyond-ones-means, e.g. "this expense came up, and we're already living paycheck to paycheck."  The third is the catastrophic situation that is either unrecoverable or will take years to pay off, e.g. debilitating car crash, massive medical bills, and the like.

The third type is pretty easy to recognize, and one can give money as their ability and inclination allow, with no expectation of repayment.  In the first case, some gentle prodding can help the person recognize their options (use a credit card, get a payment plan, etc), and they won't need to borrow the money from a friend/relative.  The second case, however, is the hard one, because it's almost always the borrower's fault (not LBYM, no emergency fund, etc), and people dislike admitting it.  Giving money to someone in that situation is dicey, because it enables poor choices and is therefore counterproductive.  A true friend wants to help, and sometimes giving money isn't actually help.

Every situation is different, and will need its own approach.  There are myriad ways of getting into financial trouble.  I saw a post here on the MMM forums recently about someone who helped their DS and DIL.  Said DS and DIL had dug themselves into a hole by following DIL's financially-stupid parents' advice, but had seen the light and were working on digging themselves back out of the hole.  In that situation, the recipient of the bailout was suffering the consequences of their own choices, but were taking responsibility, and there was a reasonable expectation that the bailout would actually benefit them in the long run.  I know a woman whose husband divorced her after 15 years as a SAHM, leaving her in a very difficult position of trying to build a career from scratch.  Some family members helped her out with no expectation of repayment, and it took her several years of really really hard work, but she's now independent.

mikemustang

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #15 on: February 01, 2019, 04:53:48 AM »
I loaned a friend money once. It's tough to say no to friends when they know you have the money and they feel like it's no big deal for them to ask. Sometimes they don't always repay for whatever reason and the friendship is never the same. I didn't want that to happen so I asked for collateral. I had him sell me his hand gun and gave him the option to buy it back when he had the money for the same price. A week later he paid me back and he got his gun. It was a pretty simple deal and I didn't have to worry or feel awkward asking for my money back. I've used this method with others. If they ask for money, I instead counter with what do you have that you can sell? Most people that struggle with finances usually own items of value that they bought when they shouldn't have. It's pretty easy for them to find things to use as collateral and it saves them from dealing with Pawn shops or having to sell things they otherwise want to keep just to make ends meet.

Cassie

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Re: Giving Money to Friends- Can I ask about personal details?
« Reply #16 on: February 03, 2019, 09:46:20 AM »
I find it odd that you have more than one friend who is bad with money.  Money can really damage relationships. I would find new friends:))