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Friends and Money Do Not Mix

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Guest blogger Danielle Hoston: This is a public service announcement. Friends and money do not mix. There is a very good reason that banks run credit reports before giving out loans and unless you can afford to lose hundreds or even thousands of dollars ... never lend money to friends.

two women talking

I once had a friend that had fallen on hard financial times. Over the course of our friendship, I loaned money, paid for countless meals, advanced rent, and even hired her (and paid her well) to pick up my daughter from school once a week and babysit her while I worked late. I loved the friendship until the day came when somebody gave her money on my behalf and she kept it. It got back to me from another source and I confronted her. She insisted it was an oversight and apologized profusely. I accepted her apology even though I knew It wasn't an oversight. I deducted the money she owed me from my next payment to her and began to rebuild the friendship. Ultimately, the friendship ended because she felt that I was unreasonable for asking her to pay a late fee that she owed for picking my daughter up late from school (for the third time).

In a way, I blame myself. Would we still be friends if I didn't blend our friendship with money? Was $13 really worth it? The short answer is obviously no. The long answer is that I resented her for being in such a dire financial situation that it repeatedly prevented her from doing the right thing and instead transferring that responsibility to me.

Don't get me wrong. I have denied loans before but, in certain cases, it has been hard to say no when I know how bad desperate times can be. In retrospect, however, it is very rare that the need is ever really that desperate or that you are the only avenue available for money. In the end, your loan often does them a disservice by giving them money to further misuse and -- worst of all -- it opens the door to the destruction of your friendship.

So what have I learned? Even under ideal circumstances where both friends are entering into the loan with the best of intentions, things can get very tricky. The problem is that money creates an obligation and both sides can become resentful. Oftentimes, the friendship conveniently drifts apart before the debt has been paid.

"Just say no" to loans with friends. Change the subject. Say you'll "think about it" or that you "can't afford it." Whatever you do, don't lend more money than you would be bothered to lose in a lost wallet. And if former "friends" owe you money, let it go. Let it be the price you paid for the lesson that will save your next friendship and the dark cloud that follows their wallet around.

This has been a public service announcement.

Tell us your story... do friends and money ever mix?

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19 comments so far | Post a comment now
Charles January 7, 2009, 3:22 PM

Never “load” money to friends. Period. You’ll resent them for not paying you back, “wasting” money on frivolous things, etc.

If they are working for you, have a salary pre-arranged and stick to it. If they are in dire straits and you are feeling generous, GIVE them money, not expecting anything in return. If they do pay it back, bonus. If they don’t, don’t fret over it remembering it was a gift, but be sure to never do it again.

Trish A. January 7, 2009, 6:35 PM

Very sound advice! Add family to that as well. As difficult as it can be, you have to let people fall, so they can pick themselves up and take responsibility for their actions (or inactions as it may be). Otherwise, you just get into an unhealthy, co-dependent relationship and resentment is sure to follow.

SD January 7, 2009, 7:26 PM

My boyfriend once said to me, “You will never be broke if someone owes you money.” Sounds good, but what if they never pay you back? I’ve been on both ends of the pole. I’ve lent money out to a friend and I’ve also borrowed money from a friend. It’s nice to know that you have friends that will lend you money in dire situations, but it wasn’t a great feeling for me knowing you owe a person money. One friend said oh you don’t need to pay me back until such and such date… Prior to that date she kept reminding me that I owe her and she even had the nerve to tell a mutual friend that I borrowed money from her, which I felt she should not have done. I was saying to myself I wish I didn’t borrow money from her and vowed to never ask her again. I didn’t let this ruin our friendship. To this day we are still friends, but I know now to never mix money and friendships. Don’t get me wrong every friend isn’t like the one mentioned above.

Ethan January 7, 2009, 7:53 PM

I would say never loan money out that you can’t afford to loose. True,alot of times you wont get it back and at times the person may be ungrateful afterwards. However, a closed fist cant give nor recieve. If I have a little extra and a friend or family member is in need, I give. But I dont have the expectation that the person will pay me back when they say they will. Life happens. If I dont get it back, I know for the next time. If the loan amount is over $5000, I say ask for some form of collateral or a secured loan. That way you at least you’re covered.

Jerwayne January 8, 2009, 9:52 AM

This is all too true. I’ve been on both ends. If I borrow money I usually pay it back within a week or two and usually throw a little something extra on top as appreciation. All of us at some time or another will be in need and I want whoever I borrowed money from to know that I am grateful and dependable so that avenue will be open again if I am ever in need.

As far as lending money I have been burned on a couple of occassions. I have learned never to lend out more than I can afford to lose. I lost the closest friend I’ve ever had over bitterness involving money. Since that time I learned never to put money before a friendship. I am a generous person by nature so it is hard for me to say no but I let all my friends know that if you burn that bridge once never ask me again.

MJ January 8, 2009, 1:24 PM

My sister and her husband took out a loan to bury his grandmother. Mind you they personally fronted $5K for the funeral services. His family agreed to pay back back the loan…. They paid the first payment and haven’t paid since. No wonder they have bad credit!!!!!! Needless to say, money, freinds and family do not mix!

Anonymous January 8, 2009, 1:30 PM

Love it. Money is so powerful it can destroy anything yet build up miricles….. great story thank you for sharing D!!!

Gwen January 8, 2009, 1:52 PM

Money has definitely ruined many friendships and relationships for me. I always felt that if one of my friends needed something I should be there to help them out. Basically it turned into a situation where certain people treat you as though you are obligated to give to them something. I have actually had people say to me how much they are struggling and almost resent the fact that I take vacations or but various items as though I should put them befor my wants and needs. It gets tricky when you equate money into things. Looking back I understand how I helped to create those dynamics.

larkspurs January 8, 2009, 4:09 PM

I agree. Though no one ever asks me for money.

Anonymous January 8, 2009, 4:21 PM

My ex who was my girl at the time got access of my social security and opened up a credit card in my name. When I found out I decided not to press charges because we were still friends and allow her to pay off the card. She of course stopped paying and I had to cough up 4 grand. She then agreed to pay me back but I’m sure you can figure out how that’s going.

Mel January 8, 2009, 4:24 PM

Biggie said it best “money and blood don’t mix like two dix/ find yourself in some serious ish”

jw January 8, 2009, 6:31 PM

Another great message Dani. Keep it up!


Selene January 9, 2009, 10:05 PM

I never loan I just give not expecting to get it back. But I don’t give to everyone.

Win January 14, 2009, 3:07 AM

Thanks for sharing these stories. A good friend of mine asked to borrow $10,000 from me. I just turned him down tonight and was wondering if I’ve done the right thing. After reading these stories, I felt a lot better and knew that I’ve probably done the right thing. Hopefully he also understands and it won’t affect our friendship.

Mike McCarthy February 10, 2009, 9:32 PM

I used to lend friends money no questions asked, then I read Danielle’s article. Now if someone even asks for change for the soda machine I tell em “take a hike”. Thanks Danielle! You rock!!! Danielle Hoston is Queen Dinga-Ling of Finance.

Mike McCarthy

Valentina March 15, 2009, 11:48 PM

I have learned this the hard way. An ex boyfriend of mine owes me around 3,000 dollars which I will never see. It’s considered a loss and I will never allow myself to get caught up in a situation like that. He would always say “Can I borrow?” “Will you lend me?” “I will pay you back.” It was so sickening because I knew he never would. The relationship only lasted 8 months and it was an expensive lesson. It do realize that I was enabling him, but he did have a beggar personality to begin with. The man had no shame! I am through with deadbeat people, and I would never lend friends or boyfriends money.

Macsltez June 22, 2009, 4:32 AM

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JM July 20, 2010, 5:20 AM

I own my own web design business, and designed a website for my pal’s new startup company. I waived my normal requirement of contract and deposit b/c it was such a good friend. It’s been 8 months since the website went live and the “friend” has disappeared. Every time I call or email about billing the job I get voicemail and no response.

It really bums me out, b/c I was also giving him 40% off my normal rate. It makes me sad that my friendship and my work are not valuable to him, or otherwise he would at least return my calls.

Ten Tees January 8, 2011, 3:39 PM

Interesting site. Nice and fun reading. I have got one thing to offer about funny t-shirts.

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