The Money Mustache Community

Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: KentBent on July 03, 2019, 07:51:16 AM

Title: Have you ever lent money to a friend?
Post by: KentBent on July 03, 2019, 07:51:16 AM
Always wondered if lending money to friends or family members affects your relationship.
The situation is that my colleague frequently asks me to lend him money and it drives me crazy. Knowing that I'm a saver and have an emergency fund he exploits my kindness almost every month.
Has anybody had the same problem and how did you refuse lending money without breaking the relationship?
Title: Re: Have you ever lent money to a friend?
Post by: Ann on July 03, 2019, 08:20:48 AM
How much money does your ďfriendĒ hit you up for? $5 for his Starbucks or $300 for new tires?  Or more?

In general, I donít lend any significant amount of money to friends I give them money ... but they donít ask.

I do occasionally lend small amounts to coworkers.  One ask for $20 for gas.  Frankly, I would have just given it to her but I thought it would be patronizing.  The other amounts I lend are usually the cost of a meal ordered (~$10) or a Starbucks because it is more convenient to pay that way.

Does your friend pay you back every time, on time?  If not, thereís a clear reason.   Whatís that joke?  I lent $20 to my BIL and never saw him again ... it was the best money I ever spent!

Even if so ... it doesnít matter you have more.  He would still be SPENDING the same amount of money. 

Stop carrying cash for a while, if you donít want to lie.
Title: Re: Have you ever lent money to a friend?
Post by: Tester on July 03, 2019, 08:42:43 AM
I don't carry cash and went and got cash for a colleague when he forgot his wallet at home so he could buy lunch.
I lent money to friends multiple times (more than 20 USD)and one of them made me regret it almost every time.
Finally I am deciding on lending money based "am I ok with never seeing the money back?".
Title: Re: Have you ever lent money to a friend?
Post by: GuitarStv on July 03, 2019, 08:49:13 AM
A good policy is to never lend money to anyone whose knees you would be uncomfortable breaking.
Title: Re: Have you ever lent money to a friend?
Post by: GoHokies on July 03, 2019, 08:56:15 AM
There should be basically no excuse these days for people lending small amounts of money because someone does not carry cash/forgot their wallet/there is only 1 check/etc. Venmo and similar apps make sending money electronically through an app incredibly easy and straightforward.  Since the app has become popular, I cannot remember an instance of having to loan somebody money to cover a meal.  Somebody pays, then the person who owes the money settles up in less than a minute through the app.

For large sums of money that the person is asking for because they do not have it for a certain emergency, I have never been personally asked to loan money to a friend. I think this partially has to do with me keeping a fairly close circle of friends that I know really well, and I doubt any of them would risk our friendship by asking for money (this could obviously change at any point). If the situation would arise I would evaluate that specific situation.  I would only give an amount of money I could treat as a gift and never ask for back.  I do not think I would ever lend an amount of money I would feel obligated to keep asking for them to repay.  It's not worth destroying the relationship.

As far as how I would say no if the situation were to arise, I would just be straightforward and honest with them that I am not comfortable lending that amount of money.  If they get defensive and start accusing me of being cheap/selfish, it would make me re-evaluate my entire friendship with the person.  A true friend I don't think would push me into a situation I did not feel comfortable with.   
Title: Re: Have you ever lent money to a friend?
Post by: slappy on July 03, 2019, 09:20:39 AM
If he is exploiting your kindness, can you really consider him a friend?

I did loan money to a friend once. Due to a miscommunication, she only paid back half of it. She left me a message saying "hey thanks for helping me out, i deposited the money back into your account." After I listened to the message, I said to my husband "i think she thinks that she only has to pay me back half". And he said "well merry christmas to her I guess." I knew that there was a point where I said something that she might have heard as me saying she only had to pay back half. Based on my relationship with her and the reason I loaned her the money in the first place, I let it go. It was over $100, but less than $200, and I could afford it. (I don't remember the exact amount.)
Title: Re: Have you ever lent money to a friend?
Post by: Villanelle on July 03, 2019, 09:33:29 AM
You asked if we've ever lent money to a friend.  I have, and I've borrowed money from family.  The latter was actually for a house.  Currently, my parents own the mortgage on our home.  This was a mutually benifical thing however, and not because I couldn't afford a regular loan.  I had a regular loan, which I couldn't refinance to lower rates because it was no longer owner occupied.  I bemoaned this fact to my dad (just making conversation, with no agenda) and he offer to lend me the money.  Guaranteed ROA on his money (and he liked the fact that my interest would stay in the family and I'd eventually inherit half of it back), and a lower rate for me.

As for the friend, she was also my college roommate.  A few times, I lent her money (IIRC, it was maybe a couple hundred dollars, or perhaps up to $500, each time).  Usually it was to tide her over until her student loan payment arrived.  She always paid me back as promised or earlier. 

In general, my approach to asks that I'm not willing to entertain is, "I'm sorry, we don't have an spare cash."  This is, strictly, true.  None of my money is "spare".  It's purpose may be to pay rent, or to go into an investment account for future retirement needs, but it is not "extra". 

Also, you call this person a friend, but then also a colleague.  Do you hang out socially at all?  If yo've lent him money, has he paid it back in a timely manner? I think the next time he asks, I'd say, "Bob, we've talked about this before.  I'm sorry, but I won't be lending you any money, and frankly, the asks make me uncomfortable.  My answer isn't going to change, so please drop it."  This is assuming you haven't actually lent him money in the past, which may be incorrect since you mention he "exploits" you monthly  It's also assuming we aren't talking about asking for $5 to pay for lunch and then repaying you the next day. If you've already lent him money, "Bob, I know we've done this in the past, but I can no longer lend you money.  I'm sorry, but I need all of my cash, so the loans have to end. "  And then the next time he asks, tell him you've discussed this, your answer isn't changing, and you'd appreciate it if, for the sake of your friendship, he drops it.  At that point, if it affects the relationship, that's on him, not you.

This is also a reason that I am careful about how I speak about our finances, especially with people to whom I'm not super close or who I feel are somewhat likely to see dollar signs when they look at me.  If they don't know you are squirreling away money, they don't see you as a future lender. 
Title: Re: Have you ever lent money to a friend?
Post by: ThatGuy on July 04, 2019, 09:51:35 AM
I have, we haven't spoken for 25 years because of it.  Not a big loss (the friendship) but it isn't worth the hassle and grief. 
Title: Re: Have you ever lent money to a friend?
Post by: Rdy2Fire on July 04, 2019, 10:04:32 AM
Don't do it unless you are prepared to lose the money and then possibly the friend.

However if you can afford to do it, the person really needs the help and it's not for some BS and realize you may not get the money back but want to help them then go for it
Title: Re: Have you ever lent money to a friend?
Post by: frugalecon on July 04, 2019, 10:06:33 AM
I chronicled my main saga in another thread (https://forum.mrmoneymustache.com/welcome-to-the-forum/advice-for-unemployed-64-year-old-friend/). Iím now out of the loan business. Personally, I wouldnít want to be friends with someone who thought it was appropriate to badger me every month for loans. That person clearly has a personal financial management problem, and they should focus on that rather than nicking you for cash every month.
Title: Re: Have you ever lent money to a friend?
Post by: Kris on July 04, 2019, 10:09:32 AM
Here are my criteria for lending someone money:

1) It would have to be someone whose need is dire and immediate.

2) It would have to be an amount I am completely comfortable never seeing again.

3) It would have to be a friend I knew well enough to trust that lending them money once would not set up the expectation that there would ever be a repeat.


To date, I don't think I've ever lent someone else money. (I mean, other than like $10 at lunch because they'd forgotten their wallet or something...) I have, however, occasionally given friends money. Most recently, I gave $100 a fund to pay an emergency hospital bill for her husband. (This was in Ecuador, so the total bill was in the low four figures for a week in the hospital after a serious illness that almost cost him his life.)

So yeah, in your situation, I would definitely not lend that person any (more) money. I would consider the end of that "friendship" a blessing.
Title: Re: Have you ever lent money to a friend?
Post by: Hirondelle on July 04, 2019, 10:29:44 AM
I'm surprised by the responses here. Maybe it's a North American thing to experience people not paying you back or not lend money to others?

I've lent money to friends many, many times. Ofcourse the occasional 'I pay for both of us and you pay me back later'. In the past with cash, now with a Venmo-equivalent or just bank transfer. I also occasionally paid things like flights and visa for friends who had trouble with their credit cards abroad. They'd pay me back in cash as soon as we met. Also one friend borrowed a lot from me to avoid bank fees abroad, then returned the money as soon as he had cash in our own currency available. I never lent anyone any large amount that I'd be uncomfortable with losing though. I think something in the $150-200 range was the maximum and I saw the guy every day at that point and knew he had the money in the bank and could get it to me if he sucked up the ATM fees.

I have been afraid a few times, especially when I booked a flight for a friend on the other side of the world that was at the upper limit of what I was ok with losing the money AND the friendship if she wouldn't return the money but honestly no one ever let me down. I've always gotten my money back within a matter of days or weeks, never later than expected or agreed upon. Either I've got genius people skills or people are more trustworthy than many seem to think.
Title: Re: Have you ever lent money to a friend?
Post by: BTDretire on July 04, 2019, 11:39:33 AM
I lent a few dollars to a friend over 45 years ago, he never paid me back. I have never forgot.
Nothing I dwell on, just never forgot it.
 Also, haven't seen him for over 37 years.
 Wonder what he's up to.  I have tried Facebook and ask a some mutual friends, but not much info.
Title: Re: Have you ever lent money to a friend?
Post by: FIREstache on July 04, 2019, 12:15:50 PM

For family, I have on a few occasions, only one time of any significant amount, but I knew they would be good for it, and have been.

For friends, I don't recall.  There were some acquaintances that burned me for $5 or less on a couple occasions and one occasion of $20 (more like $50 in today's dollars) for not ever paying me for something I sold.  I'm not very trusting anymore of outside of the family.
Title: Re: Have you ever lent money to a friend?
Post by: GuitarStv on July 04, 2019, 12:19:29 PM
I lent a few dollars to a friend over 45 years ago, he never paid me back. I have never forgot.
Nothing I dwell on, just never forgot it.
 Also, haven't seen him for over 37 years.
 Wonder what he's up to.  I have tried Facebook and ask a some mutual friends, but not much info.

Probably living like a king on your money.  :P
Title: Re: Have you ever lent money to a friend?
Post by: Imma on July 04, 2019, 12:38:36 PM
I also have no bad experiences at all. That being said, people have never asked me for money because they had none. Being one of the few in my group of friends with a credit card I have paid loads of concert/festival tickets, flights, hotel rooms etc and was always paid back quickly. Most of the times I had the money in my account even before I received my credit card bill.

I don't mind taking turns paying an ice cream or a few drinks but it would be unusual among my friends to not split a bill that's higher than about Ä20/person (unless taking someone for dinner is the gift of course). If someone has ordered a more expensive drink or dish they will always make sure the others don't end up paying it, they will itemize the bill or just throw in some extra money. Actually my partner is so fair he will even pay his craft beers seperately in the supermarket instead of paying from our grocery budget .... I guess I just know some really honest people?

When we were buying our house we were waiting for a big payment to come through that we needed to be able to pay and a friend of ours very generously offered us a loan to tide us over (significant money, a 5 figure sum). We thankfully didn't have to take them up on that offer, but it meant a lot to us that they would trust us enough to even offer that. Obviously we would have paid them back right away with interest if we had to take the offer.
Title: Re: Have you ever lent money to a friend?
Post by: John Galt incarnate! on July 04, 2019, 04:34:17 PM
Always wondered if lending money to friends or family members affects your relationship.
The situation is that my colleague frequently asks me to lend him money and it drives me crazy. Knowing that I'm a saver and have an emergency fund he exploits my kindness almost every month.
Has anybody had the same problem and how did you refuse lending money without breaking the relationship?

Once, I loaned a lot of $ to close friends  (a couple) when they needed it immediately to take advantage of a fabulously low price on some real estate.

I had no misgivings about doing so.

They paid me back in full well within the time we agreed to.

Another time I loaned $7000 to a friend who had fallen on hard times.

I knew he would pay it back.

It took him a long time to pay me back (~2.5 years) and when he made the last payment  he included interest that  I refused to accept.

Title: Re: Have you ever lent money to a friend?
Post by: ChickenStash on July 04, 2019, 07:18:38 PM
I donít recall ever loaning money to friends but it would be a tough sell for anything more than covering dinner or a show. If they were truly in trouble I would either work something out or just gift it.

For family, I just gift it. I donít have any leaches in my immediate family so if some is asking then itís because there is a big problem. One of my close relatives fell on hard times and I wound up covering a large portion of their living expenses for the better part of a year while they got back on their feet. It didnít change the relationship at all. They offered to pay it back but I felt it would have been a burden for them and it didnít impact my finances much (Hooray Mustachianism).
Title: Re: Have you ever lent money to a friend?
Post by: Ann on July 04, 2019, 09:12:53 PM
I'm surprised by the responses here. Maybe it's a North American thing to experience people not paying you back or not lend money to others?

... I've always gotten my money back within a matter of days or weeks, never later than expected or agreed upon. Either I've got genius people skills or people are more trustworthy than many seem to think.

I think you wisely surround yourself with great people.  I assure you, though, that not everyone  who asks for a loan will pay it back. 
Title: Re: Have you ever lent money to a friend?
Post by: Hirondelle on July 05, 2019, 12:26:34 AM
I'm surprised by the responses here. Maybe it's a North American thing to experience people not paying you back or not lend money to others?

... I've always gotten my money back within a matter of days or weeks, never later than expected or agreed upon. Either I've got genius people skills or people are more trustworthy than many seem to think.

I think you wisely surround yourself with great people.  I assure you, though, that not everyone  who asks for a loan will pay it back.

I'm sure there will be situations where I'll get disappointed. I think, like Imma also pointed out already, that one main point is that all the money I ever lent to people was an amount I knew they had, but just couldn't access at that moment. I never gave money to a broke person or someone with a forever poor track record of overspending.

When people ask me for money and I expect it to be hard for them to pay me back, either for financial or practical reasons (e.g. friends abroad with no plans to meet me in person anytime soon) I wisely say no and tell them I'm uncomfortable loaning that money with no idea of when I'll see it back. Most people understand.
Title: Re: Have you ever lent money to a friend?
Post by: former player on July 05, 2019, 01:23:10 AM
About a year ago I managed to turn up at the local food van (we are pretty rural) without any money, and a colleague offered to lend me the money, less than £10.  I posted the exact amount through his front door letterbox the next day.

Two months ago he told me he had been looking for an invitation in the pile of papers under his letterbox and found my envelope with the money.  He hadn't said a word to me in all that time about not paying him back.  I an still mortified at what he must have been thinking all that time.
Title: Re: Have you ever lent money to a friend?
Post by: KentBent on July 05, 2019, 05:16:21 AM
How much money does your ďfriendĒ hit you up for? $5 for his Starbucks or $300 for new tires?  Or more?

In general, I donít lend any significant amount of money to friends I give them money ... but they donít ask.

I do occasionally lend small amounts to coworkers.  One ask for $20 for gas.  Frankly, I would have just given it to her but I thought it would be patronizing.  The other amounts I lend are usually the cost of a meal ordered (~$10) or a Starbucks because it is more convenient to pay that way.

Does your friend pay you back every time, on time?  If not, thereís a clear reason.   Whatís that joke?  I lent $20 to my BIL and never saw him again ... it was the best money I ever spent!

Even if so ... it doesnít matter you have more.  He would still be SPENDING the same amount of money. 

Stop carrying cash for a while, if you donít want to lie.

I'm talking about the amounts that are larger than $10 that are usually lent for meal or coffee when you forgot your wallet at home. The loans he asked for were $200 and even $500. He always returns money back and on time, but I don't like the idea to lend big amounts. I've lent once and it became a frequent practice.

If they don't know you are squirreling away money, they don't see you as a future lender.

This was my greatest mistake that turned into a nice lesson to me.


For large sums of money that the person is asking for because they do not have it for a certain emergency,
The money lent was not for urgent needs, but mostly wants: a vacation, new furniture, etc.
Title: Re: Have you ever lent money to a friend?
Post by: former player on July 05, 2019, 06:03:19 AM
Always wondered if lending money to friends or family members affects your relationship.
The situation is that my colleague frequently asks me to lend him money and it drives me crazy. Knowing that I'm a saver and have an emergency fund he exploits my kindness almost every month.
Has anybody had the same problem and how did you refuse lending money without breaking the relationship?

"I'm terribly sorry, I've changed the way I manage my money and I won't be able to lend anything to you any more.  Have you tried your bank?"
Title: Re: Have you ever lent money to a friend?
Post by: KentBent on July 05, 2019, 06:24:49 AM
Always wondered if lending money to friends or family members affects your relationship.
The situation is that my colleague frequently asks me to lend him money and it drives me crazy. Knowing that I'm a saver and have an emergency fund he exploits my kindness almost every month.
Has anybody had the same problem and how did you refuse lending money without breaking the relationship?

"I'm terribly sorry, I've changed the way I manage my money and I won't be able to lend anything to you any more.  Have you tried your bank?"
Thanks!
Title: Re: Have you ever lent money to a friend?
Post by: Dicey on July 05, 2019, 06:52:33 AM
About a year ago I managed to turn up at the local food van (we are pretty rural) without any money, and a colleague offered to lend me the money, less than £10.  I posted the exact amount through his front door letterbox the next day.

Two months ago he told me he had been looking for an invitation in the pile of papers under his letterbox and found my envelope with the money.  He hadn't said a word to me in all that time about not paying him back.  I an still mortified at what he must have been thinking all that time.
If he was like me, he'd have forgotten all about it and then had a nice surprise.

My walking partner and I routinely carry just a little extra cash. We often cover each other if cash is needed when we're out walking. Neither of us keeps firm track. We're both FI and not cheap, so it all evens out.
Title: Re: Have you ever lent money to a friend?
Post by: Imma on July 05, 2019, 10:42:30 AM
I can't imagine loaning $500 to anyone, let alone a coworker and for a non-urgent thing. Really good to hear you're trying to end this. Use that sentence from @former player if you have difficulty saying no to him. In my workplace asking to borrow money from a coworker would also be considered very inappropriate and could have serious consequences especially if you said no and he kept asking.

If he has a very urgent need for money he can always ask a cash advance from your employer. I work in payroll, this is not something unusual and most companies will help you out if there's a serious need and you're a trustworthy employee. Is he asking you because he knows the bank and your employer would say no?

Title: Re: Have you ever lent money to a friend?
Post by: Cassie on July 05, 2019, 01:07:44 PM
My husband loaned 500 to a friend when his trailer was flooded.  Then they won 50k at a casino and cooked us a steak dinner at their  house and told us. That was the end of the friendship.
Title: Re: Have you ever lent money to a friend?
Post by: frugalecon on July 05, 2019, 03:23:41 PM
My husband loaned 500 to a friend when his trailer was flooded.  Then they won 50k at a casino and cooked us a steak dinner at their  house and told us. That was the end of the friendship.

Did you at least get the $500 back before you ended the friendship?
Title: Re: Have you ever lent money to a friend?
Post by: Dicey on July 05, 2019, 07:15:26 PM
My husband loaned 500 to a friend when his trailer was flooded.  Then they won 50k at a casino and cooked us a steak dinner at their  house and told us. That was the end of the friendship.
There must be more to this story. More details, please.
Title: Re: Have you ever lent money to a friend?
Post by: Cassie on July 06, 2019, 10:31:57 AM
Cooking us a steak dinner was what they did and they never paid us back. Once it was clear they werenít going to pay us I didnít want to be friends with them anymore. 
Title: Re: Have you ever lent money to a friend?
Post by: mistymoney on July 06, 2019, 10:57:58 AM
My experience in loaning money to a friend is that you lose the money and the friend.
Title: Re: Have you ever lent money to a friend?
Post by: frugalecon on July 06, 2019, 01:05:34 PM
Cooking us a steak dinner was what they did and they never paid us back. Once it was clear they werenít going to pay us I didnít want to be friends with them anymore.

Wow. Don't blame you for dropping them. They sound like entitled jerks.
Title: Re: Have you ever lent money to a friend?
Post by: Villanelle on July 07, 2019, 11:53:27 AM
Cooking us a steak dinner was what they did and they never paid us back. Once it was clear they werenít going to pay us I didnít want to be friends with them anymore.

Did you ask?  Sure, you shouldn't have to ask for repayment of a loan, but often that's all it takes. 

This thread also makes me wonder if one predictor of whether the loan situation is going to go bad is whether there are defined terms for repayment. If perhaps it is just left at "can I borrow $XXX", it seems far more likely that the loan won't ever be repaid, or that the lender will see the borrower spending on frivolities and get upset.  When it is, "Can I borrow $xxx?  I will repay you half next Friday when I get my paycheck, and the other half two weeks later when I get the next check?", it seems much more likely to go well. 
Title: Re: Have you ever lent money to a friend?
Post by: Lmoot on July 07, 2019, 07:48:45 PM
I lent $2k to a friend I consider family and have known since we were small children. A tree fell on their house during Irma, making it unsafe for them to live in, and they were forced to live in a hotel and eat out for several weeks until insurance kicked in. They eventually fixed it but fell on hard times with their business, prolonging pay back. They have two very small children and that was 2 years ago. Haven't seen a dime, but keep in regular contact and have visited with them in their home.

It hasn't affected our friendship at all. They know what they owe, and I know they anguish over not being able to pay it. Business just reopened and they are headed in the right direction getting back on their feet, so while I am not expecting it anytime soon I know I will get it and that I will consider it a "bonus", because I lent it in good faith, resolved to consider it a gift if I never got it back...or got it back 10 years later. I have and would never do this for anyone outside of close family, and I would not lend anymore to my friend or family until repaid (cuz that's a lot of money lol). And because I don't want to set the precedent that I can be tapped during hardships. If/when they pay it back, I would be willing to lend again. They've hosted me many times in their home and we've followed the "give and take" economy freely between eachother over the years, so that existing experience probably makes it all less awkward.
Title: Re: Have you ever lent money to a friend?
Post by: BussoV6 on July 08, 2019, 05:54:21 AM
Cooking us a steak dinner was what they did and they never paid us back. Once it was clear they werenít going to pay us I didnít want to be friends with them anymore.

Wow, I hope it was an awesome steak!
Title: Re: Have you ever lent money to a friend?
Post by: Sun Hat on July 08, 2019, 06:13:18 AM
I lent $1500 to a friend to give her the funds to drive across the country from an imploding marriage to go and live with her parents. She said that she'd need at least $5k (for a 3 day drive), and got huffy when I didn't give her more. She managed to make it. She never thanked me and has never paid me back.

I had counseled her to either sell her Audi, buy a cheap car and live off of the difference, but she said that old cars were for "fat girls" (to the fat(ter) woman who drove a 12 year old car and could afford to bail her out).

Years later, I know that she could easily afford to pay me back (she just had a fancy new house built with her new husband's money), but has never offered to do so. I still don't regret it, since it got her out of her previous marital home where she was actively destroying her estranged husband, who is like a brother to me. Good riddance.
Title: Re: Have you ever lent money to a friend?
Post by: DeltaBond on July 08, 2019, 09:30:34 AM
I'm sure this isn't 100% across the board, but the people I have known who have had the nerve to ask for money weren't exactly upstanding individuals, they were ok asking for money and ok with not planning on returning the favor, or returning the loan.  I don't need friends like that, and once I left those types behind, no one has asked since, even the people who I felt would need help.

The last time someone asked me for money, it was someone who had recently openly blogged about how she hated my type, solidly employed, married, what she viewed as "conventional".... just a very scathing rant right after we had caught up from childhood.  Then asked for money ($500) in a very polite way, seemed to need it, yadda yadda.  I had just paid off a credit card and had none to give, and was happy to be able say so with honesty.  Our friendship went downhill from there, lol.
Title: Re: Have you ever lent money to a friend?
Post by: teltic on July 08, 2019, 02:24:07 PM
My close friend of 7 years asked me for $500 last month.  I could tell how embarrassed he was to be in a position like that.  We talk nearly every day.

He told me 2 weeks ago he'd won't ever forget and will pay me back when he can.  I'm going to consider the $500 written off... If he pays, great!  If he doesn't... Shit. 

I'll never lend out more money to him. I'm faithful he will repay me.  If he doesn't... I'll consider the $500 as consulting fees for listening me complain about my job/life to him. haha.
Title: Re: Have you ever lent money to a friend?
Post by: Plugging Along on July 08, 2019, 02:43:39 PM
I find it really interesting what people have considered loaning or lending money here which I donít think of.

I guess I have lent money in many ways.

- Someone I know forgets their wallet  I am happy to cover them.  if They pay me back, great, they usually will, if not, I am sure they will pay the next time I see them.  Always under $50. I never sweat it, and itís never something tha will ruin our friendship.   Keep in mind if it happened all the time it would be different and I would not cover them.
- in my family, we pick up things for each all the time.  We just keep a tab and square up at the end of the year.  Itís has nothing to do with money,  as everyone has it but rather convinence.   Never a problem in all these years.
- go for coffee or snack at work with a colleague.   I will often offer to pay with no expectation of them paying me back.  However, I noticed there area coupe of people that will always accept my offer to pubs them a coffee, never offer to pay me back, or buy one for me.   You learn pretty quick who they are, so those are the ones I donít go to for coffee with or never pay for.     I find the ones I tend to trust are  also the ones that offer to pay me pack or reciprocate
- I have lent money to family in terms of larger amounts four and five digits.   This is usually because an unexpected expense came in and their money is tied up in an investment or something and I have sparE cash.   My family has done the same for me.  No problem ever either, we just lend the money and tell them when the money comes in and get paid back.

- I currently have a very close collegue who has run into to some tough times.  A lot of bad luck that they canít get out of.   I will lend a hundred here and there.   I expect nothing back even thou there are promises of paying back.  This person also does a lot for me on a personal level in terms of helping me when I am in a bind.   I call the even.  Unfortunately, car got repossessed
D and I made there were promises to pay, but I know things are tight.   So I am finding ways for the person to Ďwork it offí.   This friend is really struggling and I want to help, I have enough to pay off all their debts for restart but itís an amount I am not willing to forget ($30k).  For that reason I wonít lend it.   I donít mind giving a thousand or two but any more I think I would resent it.   The person never asked either but is a great person and friend.

My advice is lend money only if you wonít get upset if you donít get it back or only in case where you have clear and comfortable communication where you can discuss terms. 
Title: Re: Have you ever lent money to a friend?
Post by: Linea_Norway on July 09, 2019, 02:28:05 AM
I have only lend the money for an occasional lunch/forgetting wallet kind of thing, and borrowed in the same way from others. We always pay each other back the next day or very soon.

A friend of mine once lend out a substantially big sum to a friend. I don't remember what the reason was. But it was a good friend who he trusted. He made a contract that specified that the friend would pay interest (the same as bank x) and would pay back over a certain date. I think this is the least thing you could do. I don't remember if I ever heard whether the loan was paid back, but I presume it was.
Title: Re: Have you ever lent money to a friend?
Post by: PoutineLover on July 09, 2019, 06:46:15 AM
I've lent small amounts to friends before, nothing that would ruin me. If one person buys tickets or makes a reservation for a group, we all pay back promptly.
I had one friend who always asked his friends for money for cigarettes or something because he always ran out of money before this parents deposited his allowance (and always complained about how it wasn't enough, when they paid his rent, bills, tuition, gave him spending money, and he had no job. Cry me a river). He always had an excuse about how he'd pay it back soon, needless to say, that friendship didn't last long.
If a good friend of mine needed a loan in an emergency I would help, and if possible I'd make it a gift, but I'm not so well off that I could just give away thousands. Luckily I have pretty good friends who aren't moochers and if I found out they were, they wouldn't be my friends anymore.
Title: Re: Have you ever lent money to a friend?
Post by: Dicey on July 09, 2019, 07:22:36 AM
My experience in loaning money to a friend is that you lose the money and the friend.
Sigh, I've been ghosted by a friend because I chose not to lend her money. I guess it's a no-win situation.
Title: Re: Have you ever lent money to a friend?
Post by: GuitarStv on July 09, 2019, 07:47:16 AM
My experience in loaning money to a friend is that you lose the money and the friend.
Sigh, I've been ghosted by a friend because I chose not to lend her money. I guess it's a no-win situation.

That sounds like a big win from where I'm sitting.  You don't need or want people like that in your life.  (Also, that person was not ever a friend.)
Title: Re: Have you ever lent money to a friend?
Post by: Dicey on July 09, 2019, 08:58:49 AM
My experience in loaning money to a friend is that you lose the money and the friend.
Sigh, I've been ghosted by a friend because I chose not to lend her money. I guess it's a no-win situation.

That sounds like a big win from where I'm sitting.  You don't need or want people like that in your life.  (Also, that person was not ever a friend.)
When my parents were at the end of their life, I was unable to care for them, or even visit as often as I would have liked, because my MIL, who has ALZ, lives with us. My parents lived eight hours away from me. My friend came and took care of both my parents until my Mom died. She was most definitely a friend, and still is in my heart.
Title: Re: Have you ever lent money to a friend?
Post by: KentBent on July 09, 2019, 10:29:50 AM
Is he asking you because he knows the bank and your employer would say no?

Since we are long-term coworkers and friends I think it is simply more convenient for him to ask for money from me and not from our employer. But it is a good idea. I will try to advise him this option the next time.
Title: Re: Have you ever lent money to a friend?
Post by: KentBent on July 09, 2019, 10:38:16 AM
Cooking us a steak dinner was what they did and they never paid us back. Once it was clear they werenít going to pay us I didnít want to be friends with them anymore.

Wow, I hope it was an awesome steak!
I guess the cost of the steak was $500.
Title: Re: Have you ever lent money to a friend?
Post by: MilesTeg on July 09, 2019, 10:46:08 AM
Always wondered if lending money to friends or family members affects your relationship.
The situation is that my colleague frequently asks me to lend him money and it drives me crazy. Knowing that I'm a saver and have an emergency fund he exploits my kindness almost every month.
Has anybody had the same problem and how did you refuse lending money without breaking the relationship?

I never have, and never will lend money to a friend or family. I will happily /give/ money if there is a justification, and I will happily take some money back at some point if they want to do that. But I will never lend money.

Sounds like you have an leech colleague. Why do you even want to preserve that relationship. Just tell him/her 'no' politely and move on.
Title: Re: Have you ever lent money to a friend?
Post by: MsPeacock on July 11, 2019, 11:55:38 AM
I lent $2000 to a friend so that they could afford the legal costs to file for bankruptcy due to medical bills they couldn't afford to pay. I knew it was likely a gift, not a loan. This is my best friend x 40 years, so I was fine with that. The initial plan was for them to pay back $50 a month. They were largely unable to do it, so we agreed to table the issue for 2 years and revisit at that time.  They eventually got about $10,000 as an inheritance and immediately paid me back. Otherwise I was just going to let it go.

In terms of impact on our relationship - I found during the time that they were unable to pay that I was somewhat irritated by their financial decisions for minor things. The thing was, the cause of the bankruptcy wasn't due to minor spending, it was due to avoidable medical catastrophes and the crappy medical/insurance system we have in the US. Now that the loan is well behind us I don't worry about the financial decisions any more than I normally would.
Title: Re: Have you ever lent money to a friend?
Post by: KentBent on August 01, 2019, 01:56:15 AM
Thanks for sharing your stories, Mustachians.

Like many of you, I am open to lending small amounts of money to a friend or colleague who has forgotten his wallet at home or has faced an emergency situation. However, this thread helped me understand 2 things about lending money to friends:
1) it is better to keep your finances secret
2) lending money to friends can really break a friendship and that is why it is important to learn to say 'No'.

I've collected some ideas about how to refuse when someone wants to borrow money from you in this post Ways to Say No to a Friend Who Wants to Borrow Money (https://directloanslenders.org/blog/ways-to-say-no-to-a-friend-who-wants-to-borrow-money/). Hope the tips shared may help someone who is in the same situation as me avoid lending money but still remain a good friend who is willing to offer a helping hand.
Title: Re: Have you ever lent money to a friend?
Post by: Dave1442397 on August 01, 2019, 09:10:15 AM
I lent $1200 to a friend who was in a bind, going through a divorce, credit rating tanked, and then his car died. I lent him the money to buy a beater car, and he paid me back within a few weeks.

I lent a family member $300 one time, and there was no sign of it coming back. We still exchanged Christmas gifts back then, so I gave her a card that said "consider the $300 you owed me your xmas gift". She never asked for money again :)
Title: Re: Have you ever lent money to a friend?
Post by: Swish on August 01, 2019, 10:31:53 AM
I have both borrowed and lent money so here are some thoughts:

The people who regularly need to be spotted for small amounts of money either are generally absent minded well meaning individuals or they are parasites. For the former a simple conversation or asking for the money back will settle the issue immediately. I have a friend who is abnormally wealthy for his age. He constantly forgets his phone wallet keys etc. causing him to constantly borrow money when ever we go out as a result. A simple reminder and he always pays me back as soon as he has his wallet again as a few years ago we had a candid conversation that these unpaid amounts are material for me despite being pocket change for him. To the latter we had another friend who never pays for anything, ever. Lives way beyond his means. Uses his sense of humour and popularity to try and influence people into giving him money. Abuse of relationship and I dropped it.

On larger sums I am all for it. I have borrowed money to start a business, invest and to get through tough times. I also lend large amounts. I lend with the expectation I will never see it again and do not make the relationship awkward over it as it was my choice to lend the money. Only one loan was never paid back for $1000. We are still friends but it was a good lesson on how they viewed me. This February I made a family loan for a business investment that was $30k. They owe only $2,250 left. Another loan outstanding is I lent a longtime friend the $10k they were short for the dp for their house. They wanted a contract or for me to be on title til it was paid back. I refused and told them they either are a trustworthy person who will treat me fairly or they won't. A contract shouldn't change who they are and how they treat people.

I think the key is trust your gut and never lend more than you are willing to lose. Some relationships have more weight/value than others. Don't be afraid to ask for or offer help. Be generous/gracious when people disappoint. I find lending money is a great way to test trust and people who are trustworthy are worth having around.

The fastest way I have gained trust in my circle is through repayment of loans I recieved. My most trusted friends/family are people who have treated the things important to me with integrity.
Title: Re: Have you ever lent money to a friend?
Post by: Blackadder on August 02, 2019, 09:06:06 AM
My spouse and I have received as well as given away big loans (not talking about loans in the range of a hundred dollars or less):

- Back at university, a friend dabbled in online trading and I loaned him about $2000 at a pretty steep interest rate (as he was sure he would make a multiple of that). Yeah, we were both pretty stupid and greedy. We put it into a contract, however. As expected in hindsight, he lost almost all of it, and I wrote off getting anything back, and we were still friends (At that time, I had a strange relationship with money; I lived pretty frugally, and put leftover money in the bank, but to me it was just useless sitting there, and I'd rather use it for something, even if it's risky). A few years later he surprised me by announcing that he is going to pay me back, which I actually didn't really feel too comfortable with. In the end, I could not talk him out of it, but could get him to *not* pay back the interest at least.

- A bit later, my brother loaned a few thousand from me as well for a (perceived/expected) emergency. The emergency actually didn't happen, but I think he bought a bunch of emergency-related stuff with it. Later he paid me back about a third of it, and promised he would pay back the remainder, but never did. I actually believe that initially, he really wanted to. I think it frustrated him when, a few years later, my spouse and I bought our house while he was not doing well financially, and he never talked about the loan or about paying anything back, and I never mentioned it as well. This was at a time when our relationship started to become less open and trustful for other reasons as well, so I don't think it's because of the loan primarily.

- After university, I had to pay back a study loan. When you pay it back in one heap, you get a sweet discount on the total sum, so my spouse lend me maybe two or three thousand to be able to do so. No contract here, but I paid her back in monthly increments over around three years.

- The friend from before was struggling to finish university, alternating between actually studying and working to finance his degree. When he was just starting to be on a roll study-wise and said something about having to work for a while, I offered to support him monthly so that he can focus on his degree. We knew this was going to be about many thousands of dollars and long time durations, so we made a very detailed contract which left no room for interpretation. We followed everything to the letter, and after around six years, he had paid me back early. Every time he had a major windfall, he paid back something extra. I feel, and maybe this sounds paradoxical, that this loan has been a positive experience for us. It showed us how much our friendship is worth to us (not in dollars, but in terms of going out of one's way as to not make the other party feel weird over money).

- My father tried to talk me into "loaning" him a thousand for filling the oil tanks at his oversized house (or act as a guarantor). He has a history of cheating people (including me) out of money with lies and false promises, and was refusing to move to financially sustainable housing, so I didn't give him anything (particularly as there was no sign that this was going to be just a one-time thing).

- When my spouse and I bought our house and had signed all the papers including the mortgage, we found that we had miscalculated the associated cost (rookie mistake), and were around 15.000 short. My mother lent us 10.000 and friends of us lent us 5.000. Paying everything back in addition to the mortgage payments was tough, but we made it (friends faster, mother a bit slower). That our friends trusted us with that much money, when I asked them, still blows my mind, and I am still very grateful to them and my mother for helping us out (this has been about ten years ago).

- My spouse financed the university degree of our niece. For a while she lived with us, then separate, then with us again (I think the degree took our niece almost ten years to finish). My spouse recorded the university- and COL-related expenses she paid for (nothing for living with us). My niece had always said she would pay everything back, including interest. Somewhat late into her study, we created a contract along the lines which I had with my friend above, with a modest interest rate only for the time after starting work. The niece signed it without reading it, which is odd, but should already have raised some alarms. She also refused to discuss any details of the contract. And now, years after finishing the degree, she starts calling my spouse greedy and the 3% interest rate outrageous (she pays 0% interest for the 10 accumulating years). She was never an easygoing person, but this is a new level after living for free with us for more than six years, gee. Actually, thinking back at some ...odd... situations we had with her (getting extremely aggressive out of the blue), I think that she has some mental issues. Fortunately we have her signature on paper, and she is currently paying back fast. I hope that when she's done, we won't have anything to do with her any more (and this feeling is probably mutual). After my niece's tantrums and abuse, my spouse reduced the interest to inflation-only (which I can understand, but teaches my niece one last terrible life lesson of how to get her way by means of emotional blackmail). Again, in this case, the relationship had already worsened before, because the niece's mother thought it would be a class move to try to extort my spouse (who was currently supporting and living with her niece) out of the major part of an inheritance. This made everything very ... complicated, as you can imagine. Oh, by the way, the person who had died was my spouse's mother, but still my spouse is treated as the deplorable person here, just because she is not ok with everyone suddenly demanding money from her when her own mother had suddenly died.

- Pretty recently, I loaned the same friend from above another few thousand (I offered it, he didn't ask me for it), because he was feeling overwhelmed with having to organize a lot of stuff at the same time, some of which was sending out bills to customers, which restricts his cash flow. No interest or complex contract there, only "to be paid back by <month>". I'm confident this loan will go well.
Title: Re: Have you ever lent money to a friend?
Post by: marion10 on August 02, 2019, 11:13:06 AM
Maybe 15 years ago a friend of mine (who had always had unstable employment situations) came by saying she needed $300 or she would be evicted from the room she was renting. We wrote a check to her and have never heard from her since. It's okay- we did not expect to be paid back.