Author Topic: How to: tactfully decline a request from a nonmustachian to borrow money?  (Read 10218 times)

sotoamerica

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Being new to the mustachian lifestyle I was, of course, excited to share the knowledge/new way of life***. Unfortunately, I've had a couple non-mustachians (1 friend, 1 family member) see it as a flag that I have some 'stache to lend. While I may have funds to lend/invest, and these folks make claims of paying me back - these folks are far from living the mustachian life nor appear to have the cash flow to honestly say that I will get paid back. They are lovely people, but far from "'stache-worthy" (a la Elaine from Seinfeld, if you will). How can I politely tell them "no 'stache for you!"? (Wow, just punched through my allowance of references to Seinfeld for the next 5 years. Apologies to all the true diehards.)

***Given the feedback, "sharing the knowledge" means, forwarding people to the website and sharing the radically different perspective of why we should build up 'staches. I agree, sharing figures is rather crude. The attribution that I may be a piggy bank is that I am one of the few people in my family that have an advanced degree, a stable job, and own real estate. I don't own things that I would get punched in the face by Mr. Money Mustache.
« Last Edit: May 02, 2014, 03:30:38 PM by sotoamerica »

iamlindoro

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As in many uncomfortable conversations, it's best to provide less information, and not to allow anxiety to push you to say more than you have to.

"I'm sorry, I am just not financially stable enough to loan any money right now."

This way, it's subjective and not too verbose.  If pushed, you could always say that you only keep a small emergency fund in cash, and that most of your money isn't accessible to you because it's in retirement accounts.

But really, the best answer is "no" without much elaboration.

stevesteve

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Being new to the mustachian lifestyle I was, of course, excited to share the knowledge/new way of life. Unfortunately, I've had a couple non-mustachians (1 friend, 1 family member) see it as a flag that I have some 'stache to lend. While I may have funds to lend/invest, and these folks make claims of paying me back - these folks are far from living the mustachian life nor appear to have the cash flow to honestly say that I will get paid back. They are lovely people, but far from "'stache-worthy" (a la Elaine from Seinfeld, if you will). How can I politely tell them "no 'stache for you!"? (Wow, just punched through my allowance of references to Seinfeld for the next 5 years. Apologies to all the true diehards.)

I'd just say something like "Sorry, I can't do it right now."  If you get any pushback whatsoever just put on a harsh voice and say "are you really asking me why I can't lend you money? I said no."  I assume the majority of the time you won't have to get to the second part.

oldtoyota

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Just "no" or "I can't." Any decent person won't mind hearing no to this question.


CommonCents

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The more information you give, the more they can dispute it to "prove" you can lend them money.  Start with, "I'm sorry, I can't do that."  If they push, "I'm sorry, I can't, but I'd be very happy to help you optimize your budget."  If they push further "I find it's awkward to lend money to friends."

Eric

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"If I lent money to everyone who asked, I'd be broker than you are!"

Oh, wait, you said tactfully?  Sorry, I can't help you there.  But I did dig the Seinfeld references.  If they keep badgering you, I suggest "serenity now".

phred

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Never let anyone know how much of a stash you have.  For the non-relative "Sorry, I just can't do that right now"  Don't tell them you have any upcoming plans for that amount of money as that will tell them you really do have some money.  You went on vacation?  Hey, you borrowed the money yourself (borrow five dollars from another friend and spend it while away)

For the relative it's harder.  You will probably never get paid back.  Do they own anything you would like to have?  They sign it over to you either as an outright sale or as security.  Example: if they have a cottage then the cottage is for your sole use until the loan is repaid.  Do they have a Shelby GT350?  Then it's yours to drive around town and enjoy.  Get the titles actually transferred with the understanding they will be transferred back when the money is returned.

Try a pre-emptive strike.  Every time you see them ask to borrow a few bucks until your plans work out

James

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"It's all in retirement accounts" sounds like the best answer to me. The fact that you consider your savings account a "retirement" account isn't any of their business.


However you word it, I do think lack of access to the money is the nicest way of turning them down. Saying you don't feel comfortable or even just "no" might indicate to them that you just need convincing, but if you can't access the money that puts it "out of your hands".


I would certainly avoid any sort of loan, even with collateral.

TrMama

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"No" is a complete sentence. Do not elaborate.

Also, I think anyone who asks for personal loan is already being rude, so I'm unlikely to mince words in turning them down.

Cheddar Stacker

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But I did dig the Seinfeld references.  If they keep badgering you, I suggest "serenity now".

If you eventually decide to lend any money to them (which I wouldn't recommend), you absolute must make them plead their case as to why they feel they are Stache-worthy. Such a great scene. Classic show.

Good luck!

eil

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So if you're being mustachian, then how would they know you have a 'stache to lend from? Unless... you told them?

Rule #1 of personal finance: Your finances are classified information. Never let anyone know how much money you have unless they have a direct need to know. Especially friends and family. For many reasons, the topic of this thread is only one.

Assuming that horse has left the barn, however, it may also be worth pondering whether the people in your life asking for loans are really worth your time and friendship. I make sure to keep friends that don't see me as a walking piggy bank. I can't pick my family, but I don't have to stay in touch with the ones I don't like.

Scroll through the forums, you'll find threads full of real stories from people who thought they were doing their friends/family a favor (sometimes tens of thousands of dollars worth of favor) by giving them an off-the-books personal loan and only ended up getting regret instead.

Weyfarere

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"Sorry, I care about you too much to become your creditor."

Also, there probably are some ideas for how to answer on Dave Ramsey's site. I know his investing advice leaves something to be desired, but his dislike for debt extends to lending money as well as borrowing it.

tipster350

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"Sorry, I am not in a position to lend you money."

I wouldn't necessarily be offended by a friend/family member asking me for a loan, depending on who they are. There are some I would lend money to. They are generally the same people who offered without prompt to lend me money when my chips were down. We have each other's back and this has been proven to be the case over the course of many years.

Of course there are never any guarantees in life.

Other than this small group of supportive and close friends, I wouldn't lend money and wouldn't offer any excuses as to why not.


pirate_wench

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If you cannot afford to lose the money, because you have to consider it a gift you will never see again, then you tell them "I cannot help you financially".  If you can afford to lose the money but don't approve of their lifestyle so don't want to give them a financial gift, then without lecture you tell them " I cannot help you financially". No excuses, no explanations. Repeat as necessary. Maybe throw in a few "I'm sorry you are hurting right now, but I cannot help you financially".  "Gee, that sucks that you're in a bind, but I cannot help you financially", etc...

If you want to give them money, please assume it's a gift even if you call it a loan, because if they were going to pay you back, a bank would have loaned them the money. Also, no strings attached. That's how you ruin relationships.

Kaminoge

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Quote
Rule #1 of personal finance: Your finances are classified information. Never let anyone know how much money you have unless they have a direct need to know. Especially friends and family. For many reasons, the topic of this thread is only one.

Really? My family definitely knows exactly how much I've got. It's one of our favourite topics (not just my money, their money, how our investments are doing, what we think is a good thing to do with any money...). And in fact I just lent my parents $40,000 (as did my brother) to make some financial maneuvering on their part a little easier. I have no doubt it will be paid back, they're old school mustachians. They've done similar for me in the past.

And quite a few of my friends know my financial situation too. Obviously I don't go round telling random people at work all my financial details but just yesterday I had quite an in depth discussion with a friend about their financial situation. How much their house is worth, how much the renovations cost, how much her and her husband are earning. I like talking about this stuff and many of my friends do too (we tend to be a mathy/nerdy bunch who enjoy breaking out the calculations).

So I don't think there's anything wrong with talking about this stuff with people - you've just got to know your people.

Emg03063

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Refer them to prosper.

iamlindoro

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Quote
Rule #1 of personal finance: Your finances are classified information. Never let anyone know how much money you have unless they have a direct need to know. Especially friends and family. For many reasons, the topic of this thread is only one.

Really? My family definitely knows exactly how much I've got. It's one of our favourite topics (not just my money, their money, how our investments are doing, what we think is a good thing to do with any money...). And in fact I just lent my parents $40,000 (as did my brother) to make some financial maneuvering on their part a little easier. I have no doubt it will be paid back, they're old school mustachians. They've done similar for me in the past.

And quite a few of my friends know my financial situation too. Obviously I don't go round telling random people at work all my financial details but just yesterday I had quite an in depth discussion with a friend about their financial situation. How much their house is worth, how much the renovations cost, how much her and her husband are earning. I like talking about this stuff and many of my friends do too (we tend to be a mathy/nerdy bunch who enjoy breaking out the calculations).

So I don't think there's anything wrong with talking about this stuff with people - you've just got to know your people.

Really.  You never know who you might be (off the top of my head) offending, making jealous, making yourself a target for, etc.  That's not to say you shouldn't do as you please, but it is definitely the norm (and a fairly common social convention) that talking about finances is considered a no-no, if only because many people might view it as impolite.

SwordGuy

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I'd just say something like "Sorry, I can't do it right now." 

I'm a firm believer in saying exactly what you mean.

"Sorry, I can't do it right now" means "Sorry, I can't do it right now, otherwise I would, so ask me again later."

"Sorry, no.  I hope you get it sorted out."  is accurate, friendly, and true.  Unless you hate the SOB in which case leave off the 2nd sentence. :)


Zamboni

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Yes Yes NO Yes

YES, it sure sounds like . . . that car you want is really nice/redecorating WILL brighten up the place/your dental health is important and should not be ignored/it's a big hassle having collection agencies calling you.

YES, I am your friend/son/sister, and I appreciate you telling me about your plans/plight.  I'm always here to listen.

But,
NO, I won't be able to loan you any money.

And finally YES, please do let me know how it all works out later; I look forward to hearing about it.

Yes, Yes, NO, Yes can be practiced in just about any situation where NO is required but you'd like to retain a positive relationship.

SJS

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Just "no" or "I can't." Any decent person won't mind hearing no to this question.

Agree!  I always feel if they  have the balls/nerve to ask, I have the nerve/balls to say NO!  No excuse is really necessary.  If you feel you must give one, you could say "Lending money is just not a business I care to get in to - may I recommend a good bank?!"     

bobmarley9993

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One thing I'm learning myself, the hard way, is it's best just not to talk to people about money in the first place.  Not that I go around bragging about my savings or anything so crude but occasionally I'll let things slip indirectly and people can pick up on that.  I have found that if people find out you have money the best case is they don't care, worst case they will resent you for it or I guess ask for a piece of it.

There are plenty of good responses on how to actually handle loan requests and I don't think I can contribute anything better in that regard.
« Last Edit: May 04, 2014, 10:09:06 PM by bobmarley9993 »

stevesteve

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I'd just say something like "Sorry, I can't do it right now." 

I'm a firm believer in saying exactly what you mean.

"Sorry, I can't do it right now" means "Sorry, I can't do it right now, otherwise I would, so ask me again later."

"Sorry, no.  I hope you get it sorted out."  is accurate, friendly, and true.  Unless you hate the SOB in which case leave off the 2nd sentence. :)

Well, I might not be able to do it later either. :)   I think you make a good point that it's probably better in most cases to be direct and you came up with a very nice way to say it.  I think most people asking for money have no real sense that they are owed it but when they're asking it's a pretty vulnerable moment so it is important to be nice to them then.  Some of the harsher answers on this thread are pretty off putting.  "No" is a complete answer but it's pretty curt.  It's not that you don't have every right to do that but presumably the person asking you is a friend or family member who is at that moment worried about their financial situation so I think it's important to take that into account.  If someone stole my dog and I ask my friend to help me look, they have no obligation to help me but a curt 'no' would be similarly rude.

kyanamerinas

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It's also worth bearing in mind the personality of the person involved. I used to work informally for a friend who would often ask me to work extra hours at short notice. I realised they weren't offended when i said no (as i initially feared) they simply worked on the principle of 'don't ask, don't get'. It could be the same for some people with asking for money, they won't be offended necessarily, they'll just ask someone else.

dragoncar

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Yeah, I would just say "sorry, I don't have the cash available."  If they are really pushy, and you feel like explaining yourself, you can say it's already tied up in long-term investments or in inaccessible accounts.  But I probably would already have walked away from someone being pushy about taking money from me.