Borrowing money from friends is always a touchy matter.
Borrowing Friends like Whimpy
Some people will borrow money from you continuously once you lend them money the first critical time. I’ve even see this kind of borrowing “without repayment” action happen even between brothers. Both brothers are good guys, but the one would continuously borrow from friends, his parents and his family. In some ways, it’s like the borrowing brother is playing a game where money isn’t real. It’s like he chooses to believe that the money is just paper like monopoly money, or that he’s special and doesn’t have to follow the rules and common courtesy conduct when it comes to paying back money.
Such behavior has prompted me to do the following when it comes to people asking me for money.
- I never have money sitting around doing nothing. So once I get paid and have some discretionary income (money after taxes and in my possession), I try to put that money to work towards goals (usually investments). That way when a friend (or really anybody) ask me for money I tell them that I don’t have any money on me (which is the truth). If it’s a large number that a friend wants to borrow, I never have that kind of money sitting by idle! By always running tight, it’s harder for a borrowing friend to slip in and take advantage of you if you have money money going to a cause (in my case it’s kid’s college funds, retirement, and goal specific tasks).
- Occasionally, I will lend small denominations to friends, but it’s money that’s less than $20. When I was younger, it was $5, then later $10. The amount has shifted as I continue to build my wealth, but it’s always a small number relative to the amount of money that I have. I don’t see myself increasing the $20 cap that I currently use for a long time.
- I make sure that I get the amount that I lent back, or else I don’t lend that person any more money. When someone comes to borrow money from me again, and if they haven’t paid off the first amount that they have borrow. I have no problems pointing out that they still owe me money from the first $20 that I lent them.
- After anybody borrows money from me, I will then later ask to borrow money from them. This puts you on the same financial borrowing level as them, and since they hate to lend money out (kind of ironic huh), they will start to avoid asking you from money. At least this is the case in my experience. Once I ask to borrow money from people that always ask for money from others, it’s like all of a sudden they think I’m broke all the time too.
Using the techniques above, I’ve been able to twist my way out of lending money to people, especially those that always borrow money from people but never repay the money back.
If you can think of another clever way to avoid habitual borrowers that don’t repay money back, please tell us in the comments section below!
Thanks,
MR
haha – I love the last one! Genius! I will probably use this idea. The only time I “lend” money is in small amounts and when friends and I are doing something together and everyone pays one person and then that person pays for everything together. I lost $40 that way once… never again.
Thanks, it’s effective. After the perpetual borrower turns you down a few time for money, if they do come to you asking again (which they probably won’t), you can give them a strange look, or point out that they turned you down last time.
Occasionally I pitch in to buy something and I know I put to much in, but it’s never more than $20. $20 is my threshold, if it requires more from me, I’m a totally different person when it comes to scrutinizing how much I’m really spending on whatever is the topic of focus.
I totally agree. Never put money between friends. You are just asking for trouble. I did deal with this once and it did put a lot of strain on the relationship. It was not a good scene.
Yes, it’s kind of a bummer that friends sometimes test their relationships by asking for money. Friends are their for support and help, but Friends shouldn’t been seen as free money…
I have a few friends that test the water occasionally, they are never to surprised that the lending waters in my backyard are cold 🙂
I am completely against loaners for riends and family, that’s what credit cards are for. I find it very telling when someone asks for a loan. Why? Bad business.
Yep, and an easy way to lose friendships too. When it’s all give and never give back, most smart people end such relationships. At least that’s the way I view it. If friendships and associations aren’t reciprocal, they why hang out with those people? De-friend them…
I never loan money to friends except for a lunch or something trivial. I never borrow either except for some trivial amount and repay within 24 hours.
Yep me too. I especially like to repay quickly (least I forget…). I hate owing people.
My friends and family are all on the same wavelength as me. We never borrow money from one another. I had more of a problem with work acquintances who didn’t have cash on them for lunch or something, but they always paid back immediately, probably since we weren’t all that close.
If I give money to someone, it’s always a gift, never a loan. I’m not a banker after all. Thankfully I haven’t had anyone ask me for a loan in a long time.
I like #4, have to try that one sometime. My problem isn’t in the lending out, it’ s in the remember part. It always tends to happen when you’re out with friends, where finding a pen and paper is impossible.
Never lend money to anyone. I have lent out money in big amounts to many people. Once around 10000 dollars of my money was in circulation. Gladly everyone paid back sooner or later. But I lost out on a lot of interest. Have heart to say ‘no’. Its your hard earned money and you should be proud to have it. Otherwise , you’ll also end up asking for loan when you are in bad times and people who have loaned from you haven’t paid back. Don’t trust people.
I think every one of us at least one in life have faces this dilemma – to borrow money to a friend or no?To my mind, you can borrow small amount of money or if your friend really have an emergency and borrowing money from you is the only way out for this person.But now there are lots of different ways to borrow money, different kind of loans and financial services are available.Everything depends on a person, I know some people who never lend money and people who even after getting a bad experience proceed to borrow money, but of course do it more cautiously. So the answer to this question is different to everyone.