We’ll start with a simple word of advice: DON’T! Don’t lend money to your friends. And I have here 20 reasons why you shouldn’t do it!
I was the “good guy” on numerous occasions and I wanted to help. I had and I still have friends that are not doing that well financially and who happened to need some money for some unexpected expense or even to buy food to put on their table.
They used to come to me asking for money and almost every time, one way or another, I got burned. Here is how I got burned and how you can get burned too (and the firs 5 reasons why you shouldn’t lend money to your friends):
1. In most cases “lend me some money” meant “give me some money,” especially when they were asking for small amounts – let’s say 5 or 10 bucks.
Small amounts add up and at the end of the year I might end up not buying a new TV because I keep giving them fives and tens because they are my “friends”.
2. They almost never respected the deadline. “Lend me some money until next week” usually ended up in me having to send text messages and phone calls for three or four weeks before getting my money back.
Sometimes they even tried to make me understand that they were doing me a favor by returning the loan!
3. They disappear and never pay: I lost a good friend (or so I thought!) for almost $200. He desperately needed the money to pay some bills and I was there to help. I haven’t seen him since.
He stopped answering his phone and he simply disappeared from the face of earth. Apparently, for some friendship has a very low cost.
4. I might need the money. I’m not a cow machine, I don’t have endless chunks of cash in my bedroom. I might need those money for a super deal or an emergency and I won’t have them.
5. There is usually no interest involved. This means that you gain nothing from helping your friend, except for a thank you and the risk of seeing any of the 4 previous reasons become reality.
And the bigger the sum and longer the period of time they keep your money, the more you lose!
So it’s simply not worth it. If those three reasons above that directly affect you are not enough to convince you not to lend money to friends, here are 15 more directly related to your friends and their living style:
6. They will ask for more. If you lend them once, they’ll keep coming back!
7. They don’t know how to budget and don’t even consider trying it.
8. They need your money, but they’re always eating out and drinking with friends.
9. They are always buying new clothes and accessories, even though their old ones are still doing good.
10. They like to gamble, bet or play the lottery, hoping for the easy way out and the ton of money in.
11. They blame society for their lack of money.
12. They have not grown up. Maturity makes you financially responsible.
13. They don’t stop smoking. One pack a day makes the money go away.
14. They own five dogs. I have a friend that keeps lending money because he can’t afford to feed them and gets mad at me when I tell him that it would be best to give them away.
15. They don’t try to get a second job. Get some side hustle income. DO SOMETHING!
16. They don’t try to find a better paying job but keep complaining about how crappy their current job is.
17. They end up calling you to see how you’re doing only when they need a favor.
18. They just came back from an expensive vacation and plan to do it again in a couple of months.
19. They keep driving their car two blocks to get to the gym.
20. They go to they gym instead of saving the subscription money and go for a run in the park.
So overall, if your friend shows no interest in making things work for him or her, cut the costs, know the difference between “need” and “want” and generally think about the future, you should not lend them money.
You’re not helping, you’re losing money and probably you’re about to lose a friend too!
[Photo by Tax Credits]
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19 thoughts on “20 Reasons Why I Won’t Lend Money to a Friend (Anymore)”
I have lent money to friends in the past or paid for something if they promised to pay me back…it doesn’t always turn out the way it should. Some people don’t take owing money as seriously as others!
Yup, unfortunately. And it seems that friends are in this category as well…
20 reasons? I use one and that’s if I can afford to not get it back I just give it to them based on their situation(s). If I can’t afford to lose it then I just straight up tell them I can’t afford to “lend” any money.
Interesting approach, Adam. But I do think that their situation is very important in this case as also is making sure that they won’t turn it into a habit.
I’ve been lucky that not that many friends have asked to borrow money. There have been times that they “borrow” a few bucks because they don’t have the cash on there. I hate it that they forget to pay me back. I always pay back even if it’s a small amount. Once when a friend borrowed a larger amount, I didn’t want to pester him so I gave him a deadline and gave him a reason why I needed it (to pay tuition) even though I could have managed without getting the money back. That way I guess I didn’t seem like I was harassing him…even though I shouldn’t have to. It is a tough situation when it comes to lending money to friends.
Yes, it’s a really tough situation but unfortunately we have to deal with it…
Sometimes its really difficult looking a friend in the eye and saying no but in the long run I think its win-win for everyone…you don’t lose money, they probably learn a lesson and your friendship might strengthen for it (or not).
Indeed, the saying no part is the most difficult thing to do. I hate it and I feel really bad for saying no, but I am sure it’s the best thing to do in most cases.
Those first five are reason enough, as you noted. Money lending is a messy business.
I’ve also found that, for whatever reasons, the bonds of friendship seem to discourage my good friends from asking for money. It’s always a friend I don’t know that well who’s asking for money. My best friends seem to know it’s not a great idea, and the risk of making the friendship awkward isn’t worth the reward.
Very good point! Good friends don’t want to borrow money because they don’t want to risk the friendship. I really like this, I should’ve written it in the article 🙂
#8! UGH! Makes me so mad.
…and maybe even buy them a drink or two :))
My rule of thumb C is only lend what you can afford to never get back. They usually say let me borrow but they are asking for hand outs. If you ask me to lend you 200 i would probably give you 50. Thats all I am willing to lose and I can still see you the next week without feeling bad. However the 50 is just the beginner, if you pay me back maybe next time Ill do 75 or 100.
Nice rule of thumb Thomas! It’s so interesting to see that everybody has a well thought approach to this matter!
I agree with pretty much everything, but not the whole ‘find a second job’ part. I never lend money, nor have I asked to borrow money. But I work 12 hours a day, seven days a week, only to get paid a measly amount of eight dollars, or less. I also have to drive an hour, to and from, work. When I get home, I barely have the energy to eat before passing out. I only sleep, about, five hours a night, then get up, showered, and dressed before having to drive to work again the very next day. It’s near impossible to find time to get a second job, so you should try and take that into consideration.
In your case, it’s pretty obvious that getting an extra job is not possible. 12 hours a day, seven days per week… that is pretty crazy, actually! However, other people might try to get one, especially if they have only a part time job or can get some side hustle income somehow.
Ok I need answers please leave replies I need help with this.ok I have this friend whom I always gave money to help,party,gas etc….. I had a full time job at that time and living at home with mom. Now I barely have income coming in and now have a apartment to provide house hold items. Well she asked me for $20 and I couldn’t afford to give it to her she got upset. What type of friend is she
@Isheika – A fake one. You don’t owe her a dang thing. Nada.
I simply say ”Wow, what a coincidence! I was just about to ask YOU for money”
I adhere to Shakespeare’s famous quote ”Neither a borrower nor a lender be”
If I can’t afford something, I do without. And it annoys me when people don’t have the same attitude