Is It Ok To Give Cash To Needy Friends?

Yes, it’s ok to lend cash to needy friends, but only if you have a clear understanding of your gift and its effects. Money undeniably alters relationships, and giving can greatly complicate, if not entirely undermine, a valued friendship. Yet, money is also one of the most direct ways to provide help. The Times provided several questions to consider before making a gift…

    Grant Or Loan? There are arguments on both sides, but if you’re going to give a gift, then make it an actual gift. Granting a debt-laden person another loan is only going to cause more anxiety.

    Ask Or Act? Some people are too proud to accept help, even if it’s needed. Offering assistance can be a gift by itself, even if your offer isn’t accepted.

    Act Alone Or With Others? It might seem strange to discuss a friend’s financial situation with a third party, but consider if the situation is broadly known or doesn’t have direct roots in unemployment.

    In late January, Steven Roy lost his job, which provided health insurance for his family. A few weeks later, his infant son Isaac, who is known as Ike, was found to have a life-threatening illness. Within hours, friends of the family from the AustinMama Web community in Texas had erected ikeasaurus.com to coordinate help for the family. A few hours later, there was $4,000 in a PayPal account with the Roys’ name on it.

    Anonymous Gifts?: Giving through your local religious community may be easier than handing over a gift. You can also use the group Giving Anonymously as a middleman. Sue Barnet, who received a $200 check in the mail said: “I come from a family of extraordinarily independent women, very determined. Sometimes that’s not such a good thing. I think I would have just been too embarrassed to accept a direct gift.”

    Cash Or Other Payments?: Cash is the most direct and flexible gift you can offer, but if you want slightly more control over the gift, you can help pay for things that the recipient’s children need, like music lessons or camp. If you aren’t in a position to offer cash, consider giving frequent flier miles, although redeeming them might be more of a hassle than a gift.

Would you consider helping out a friend? How would you do it? Tell us in the comments.

Helping Out With Cash: A Delicate Art [The New York Times]

Comments

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  1. missdona says:

    In the words of Judge Judy, “give don’t loan.”

    If you want to help your friend, don’t assume it will ever come back to you.

    • Wendy Sloan says:

      @missdona: this. My personal rule in “loaning” money is to make the assumption that it’s not gonna make it back to me. If it’s too much money to part with, then it’s too much.

    • Islandkiwi says:

      @missdona: Word. If I’m giving it, I’m calling it a gift. If they treat it as a loan, awesome. But if you want to preserve the relationship, be it family or friend, you have to accept that your money is gone.

    • sleze69 says:

      @missdona: When you “loan” money to a friend, you just named the price of your friendship.

      Judge Judy is right.

    • chris_d says:

      @missdona:
      This is absolutely correct. Don’t think of it as a loan or it will ruin your relationship with that person. So either don’t, or make it a gift.

      Either way, there are some people who simply can’t manage money, and until they learn how, giving them more is like handing a coffee cup to someone in a sinking ship (to bail water).

    • Charles Duffy says:

      @missdona: I don’t have a problem with loaning friends money — I just treat such loans casually, and expect them to be paid back whenever they’re paid back instead of on a fixed timetable.

      I’ve had friends take longer than either of us had expected to repay me — but never lost a friend, and never had someone default.

      • Con Seannery '09: Where's the screen? says:

        @Charles Duffy: But remember, a debt changes the relationship’s dynamic. Whether it’s used or not, the creditor assumes on some level a degree of power over the debtor.

        If I give cash to a friend, it’s a gift. The way I see it, they need it, if I gave it I can spare it, and it’s coming back to me somehow in some form when the time is right. Could be calling back the favor at some point, could just be one of those karmic good events.

    • GuinevereRucker says:

      @missdona: “He who loans money to his friends should decide whom he loves more.” -Ben Franklin*

      *At least, I think it was him.

    • Keavy_Rain says:

      @missdona: That’s how my parents and I handle loans. I give them the money and if they pay me back, I gratefully accept. If not, I consider it me repaying them for all the food, clothes, toys, etc. they gave me when I was unable to fend for myself.

      Friends, I’ll buy them food if they need it or invite them over for dinner but that’s it.

    • dreamsneverend says:

      @missdona: That is a lesson so man people need to learn. I only give what I can afford and never have expectations of it being returned.

  2. maruawe42 says:

    usually when giving a “loan” to a friend itt turns out to be a gift anyway as they never repay to “loan”. Giving
    direct cash is not good as the person may feel that all they have to do is ask for another gift..I suggest take them to a store for the needed goods have them pick out what they need and purchase the item/items for them.. you can do this without making the friend look like a nerd /
    bum. be flexible.

    • The_IT_Crone says:

      @maruawe42: I’ve always been turned down when I offer to buy the same amount of needed goods as the $$ they are asking. It’s treated like “oh so you won’t help out ___X___?”

      • Eyebrows McGee (now with double the baby!) says:

        @The_IT_Crone: In my social group, OTOH, giving or taking money is awkward and weird. But picking someone up some groceries (“I know you’ve been so busy, I just grabbed a few things for you since I knew I’d be stopping by”) or showing up with a boxload of kids’ clothes (“My sister was getting rid of them … I have no idea why the Target tag is still on that one”) is okay. But you gotta play it off all face-saving, not like they’re broke but like it’s just a favor or you happened to think of it.

        • Charles Duffy says:

          @Eyebrows McGee (on Twitter: LPetelle): Yup. There’ve been times when I’ve lived with folks for years and never had cash change hands — but did every second or third grocery run for the household, let them use my vehicle at will, and the like. Works out well, and nobody needs to even talk about money.

        • floraposte says:

          @Eyebrows McGee (on Twitter: LPetelle): Heh. I once bought a pile of books for somebody, and I didn’t want her to know I’d bought them new, so I penciled in “used” pricing on the flyleaves and then badly erased it. (She probably never even looked, but I felt very cunning.)

    • aguacarbonica says:

      @maruawe42:

      Pasted from below to here, where I actually meant to post it:

      “I mean yeah, because no matter how you slice it, it just sounds like you don’t trust them enough to use the money for its intended purpose. I’m not knocking this method at all; I just realize that’s how people feel.”

  3. PedroMeatball says:

    Having been on both sides of this situation:

    Giving/loaning: No expectations of getting the money back. No more than I can afford to lose (obvious).

    Alternate route: “Buy” something off your friend for an inflated price (like coins, baseball cards, whatever) and when things turn around, offer to sell them back for the same price. An interest free secured loan without saying so.

    Receiving: Pride comes into play. Easier to accept an invitation for dinner than cash. Offer to cook or clean up afterward.

  4. The_IT_Crone says:

    It’ll never come back, whether friend or family. So don’t give expecting a return.

    • aguacarbonica says:

      @The_IT_Crone:

      I mean yeah, because no matter how you slice it, it just sounds like you don’t trust them enough to use the money for its intended purpose. I’m not knocking this method at all; I just realize that’s how people feel.

      • The_IT_Crone says:

        @aguacarbonica: It’s from experience. I’ve finally realized that if you can’t afford/stand the money to NOT COME BACK, then don’t give it.

        I gave my sister money out of compassion because the (stated) repercussions were dire: eviction, cat dying, etc. However when I asked for the money to be returned (when she was making a fantastic wage) out of equal compassion (got sick, medical bills, had to drop out of college, sobsobsob), she all but laughed at me.

        I know that not everyone has crappy family like I do. However while I seem to have a LOT of experience at this, it doesn’t mean that everyone else is immune.

        • aguacarbonica says:

          @The_IT_Crone:

          Lol, incidentally I replied to the wrong person. I was actually trying to reply to maruawe42 up above. Silly me.

          As for your method, I agree wholeheartedly. “Give not begrudgingly” is what I was always taught; if you can’t part with it with a happy heart (and not feeling like you’re owed something), you’d probably best keep your charity to yourself.

          • The_IT_Crone says:

            @aguacarbonica: Is ok- I don’t even think it was your fault. It did the same thing to me further down.

            I don’t QUITE think the Consumerist Comments are fixed yet!

            • wcnghj says:

              @The_IT_Crone:

              [www.rentrecoveryservice.com]

              Some services like that, that one is specific to rent recovery, but there are others. I am sure they would still report for you.

              EDIted- They will report, just choose less then 10 units.

        • Charles Duffy says:

          @The_IT_Crone: As you say — not everyone’s experiences match yours. To the extent I can recall, I’ve never not been repaid.

  5. Apeweek says:

    I usually ask not for repayment of the money, but for a gesture of appreciation like a dinner or a birthday gift.

    If the loanee cannot follow through with even this, (it’s amazing how many won’t) I do not consider them worthy of future help.

  6. Verucalise (Est.February2008) says:

    I’ve borrowed money from my sister many times in the past, and I’ve always told her up front when I would be able to pay her back. If ANYTHING came up or there was a delay, I’d call her immediately and let her know. She was mostly OK with it I think because of the honesty. The end result? She has never hesitated to loan us money if we needed it, because she always knew she’d get it back.

    The old saying “Don’t bite the hand that feeds you.” Its a 0% interest loan, and its usually a lot more lenient than credit card or bank loans.

    If people are going to go into an agreement, be honest about your situation. My other sister isn’t exactly the best at paying her debts and she owes a lot of money to family members. The result? No one gives her money anymore. They offer to pay a bill FOR HER, buy her food, instead of giving her cash.

  7. theczardictates says:

    @floraposte: Ditto. I prefer to ask them to “pay it forward” when they can because it frees them from the sense that they owe me repayment, which is what damages the relationship on both sides. And by never asking whether they have done so, it also frees me from any resentment that they haven’t paid me back properly or promptly. If they don’t fulfill the promise it’s between them and their conscience, it’s not my problem.

  8. The_IT_Crone says:

    I should relay some personal experiences:

    I’ve held a job since I was 13, and was very careful about saving. Hence, I always had more money than my sister (note that I was still very poor compared to my classmates, my weekly wage was probably 1/4 of their allowance). However I was very gullible.

    * My sister kept getting behind on rent. After the first few times, she became very good at “but if you won’t lend me the money I’ll get evicted!”

    * My sister’s cat got sick, and she couldn’t afford the vet bills.

    * My sister needed a ride to pick up her car from the repair shop. Somehow her card got declined! I wouldn’t mind just putting that new transmission on my card now, would I?

    * My sister NEEDED a 56k modem, and I don’t even remember how she convinced me to pay for it. 8 years later she GAVE ME THE MODEM and said that we were now “even” for it.

    She never paid me back for any of it. In fact the only check she ever gave me BOUNCED. When I asked her about it, nicely, she would scream and flounce away. The last time she told me that I owed HER money.

    * My friend had something (I think groceries?) delivered, while I was there, but couldn’t pay for it. I lent him $140. A few months later he had a party that was $5 a head, and was upset that I refused to pay him.

    * Boyfriend didn’t have enough $ for concert tickets, I lent him $100.

    * My grandmother sent me a SOB story in the mail of how she needed money, she couldn’t pay all of her bills. The_IT_Crone to the rescue! I spent the weekend selling/pawning things that I knew I could live without, and gave her $400. But I was complained to that my SISTER gave her $800. She who never paid me back, makes 3x what I do, and owes me ~$3k.

    *I noted that her apt was VERY bare, that everything had been sold/pawned/etc. So I bought her a TV and VCR. The next time I visited, they were gone. I found out that it was my BROTHER that was stealing her things.

    *My sister emptied my grandmother’s bank account and went on vacation to Europe.

    No one ever paid me back.

    /be kind, most of these were before I was 18.
    //yes, I was a doormat.
    ///more like a bear trap now when people ask for money.

    • Randy Treibel says:

      @The_IT_Crone: Sounds familar. People really do a number on us until we wise up at 18. I think we realize that sometimes letting them get evicted or fail and hitting rock bottom is better for them long term.

      • Teradoc says:

        @The_IT_Crone:

        Holy cow, if I was in your position, I would be taking every word my sister said with deep suspicion, and if they called me on it – I would air the laundry.

        Sounds like you have wised up, or at least I hope you have

      • The_IT_Crone says:

        @Randy Treibel: It’s one of those “2 birds, 1 stone” things. I often wish I’d just told her to figure it out for herself the first time she grifted me… but I was like, 13.

        @Teradoc: Every time she opens her mouth I have to look at her sideways. Fortunately for me I’ve pretty much written off my family at this point. Everyone knows she stole that much from me- they just think that I’m more “capable” so “helping” her/them is justified.

    • mac-phisto says:

      @The_IT_Crone: these are perfect examples of why loaning money to a friend/family member can be so daunting. & (on the flipside) why some people who could really use some help may refuse it or are reluctant to ask.

    • MsAnthropy says:

      @The_IT_Crone:

      Yikes. I think if I were you I would refuse to help any family member out, ever again. If they bitch and whine and try to guilt-trip you about it (which they surely will, they sound like an over-entitled bunch of sponging parasites), a reminder of their past behavior should end the conversation. It sucks to be treated like that – I’m sorry.

    • DaoKaioshin says:

      @The_IT_Crone: oh the_it_crone, i’ve been meaning to talk to you.

      see my mother, brother, sister, cousin, and grandmother all came down with ultraplague. soon after, the local volcano erupted, covering their home in lava. then their lava happened to be filled with deepworm eggs and their remaining possessions were dragged deep into the bowels of the earth. so if you don’t lend me $10 000, they will be without help!

    • JaneBadall says:

      @The_IT_Crone: I wish we could put your sister into a cage match with my sister, sell tickets, raise some money for what they owe us and then maybe hit them with a firehose. Bitter? A tad.

      After I stopped “lending” my kid sister cash, she had to get creative. She shows up at the door, her two-year old in tow, nowhere to live, going crazy, suicidal, blah, blah.

      I let her in, tell her she can stay for two week ONLY, buy her own groceries, more etc. She agrees.

      Wake up the next morning to a note and a hungry kid. Note says she’s worried that in her fragile mental state that she’ll hurt her child so she has gone to the beach. A week later she shows up. Turns out she went to Vegas. Had a wonderful time, gives me 50 bucks from what she won and leaves. Says she’s going to live with friends across the country. How nice.

      A few weeks later I get the statement from the bank. My savings account is wiped out. She had gone to the bank with my passport, withdrawn the funds and headed for Vegas. I was only 23 at the time so that 3 grand was HUGE.

      We don’t talk much these days.

      I don’t lend money to anyone but I do cook a lot of casseroles.

      • floraposte says:

        @JaneBadall: Holy cow. I’m well beyond 23 and I still find 3 grand huge. Poor you, and her poor kid.

        It’s like this kind of person doesn’t even grasp that she committed a crime, because she did it to a family member. I’d still have been tempted as hell to press charges, though.

        • JaneBadall says:

          @floraposte: That was 20 years ago. These days I’d press charges. Lots of charges.

          I’m actually really lucky because the identity theft angle could have gotten a lot worse and 20 years ago nobody had even heard of it. I would have been completely unprepared if she had opened a credit card account, taken a car loan or used my name on a lease. Fortunately she left my passport behind on her way out.

          But there’s a warning. If you’ve got shifty relatives, don’t let them near your ID. Especially if they look like you.

      • samurailynn says:

        @JaneBadall: When sis didn’t show up for her kid at the end of the day, I probably would have called the police because I was worried. If that didn’t already start something with child services when she got back from Vegas, I would probably end up pressing charges on the emptying of my bank account. I don’t care if it’s family, it’s illegal, disrespectful and just plain wrong. I can’t stand people that think they just deserve whatever they can get their hands on.

    • deadspork says:

      @The_IT_Crone: Are we related? I think we share sisters. :(

  9. wcnghj says:

    Make up a contract and have it notarized for $5. It can make all the difference.

    Also, there are some websites that will place a collection on somebodys credit report for a small fee.

  10. sponica says:

    It depends on the friend and how close a friend they are…and you know, how much money I actually have. If I know someone’s in dire straits, I’d probably be more inclined to give them a gift card to their local grocery store if that was possible. Since I never have money, and right now have oodles of time due to the fact i’m in my last semester of grad school, I’d be better offering a service (hey do you want me to catsit, housesit, etc?)

    • samurailynn says:

      @sponica: I have a friend that was taking groceries to her mom’s house every week so her younger siblings would have something to eat. Even that kind of gift just made her mom do even less for the kids. Sadly, some people are just looking for ways to get something from someone else.

  11. Randy Treibel says:

    To me it would depend on what they’ve done with their money in the past and if they deserve more. If someone is in a really bad spot and has been a really solid friend/person and just got stuck for whatever reason i will help them to the end of the world. But if they spent all their time partying/going to bars/pickingup DUIs (well i’m less likely to be there friend at this point but i don’t just auschwitz someone for a few bad years) then they’re going to be on there own. Hitting rock bottom is a good thing for them.

    • Verucalise (Est.February2008) says:

      @Randy Treibel: Some people never learn, either. My “bad” sister and her husband make enough money to pay all their bills, buy food, maybe toss $200 in a savings account every month. They only have one child, who’s 5. They’ve been married for 8 years, and their financial situation only gets worse over the years. They are habitual spenders- they never “bargain” shop, take extravagant vacations with their tax returns, and would rather go out to dinner or shopping then pay bills. My mother buys her son lunches for school because my sister cries “We don’t have food!” all the time.

      What’s worse, is that it feels like they use their 5 year old as a tool to get what they want from my mother. “Our electric is about to be shut off… we’ll have no heat for our lil boy… along with no food” What grandparent can ignore that? His parents are just as guilty, they can’t stop helping either for the childs sake. Makes me wanna hit her HARD.

    • The_IT_Crone says:

      @Randy Treibel: Generally they will refuse to tell you exactly what they need the money for. Just “bills” is usually the answer.

  12. HIV 2 Elway says:

    No, no, no, never. I never lend or ask to borrow substantial amounts of money (never more than $100) from friends or family. Its just too awkward for both parties.

    I have a few friends who are facing hard times, rather than lend them cash I offer to pay them to do work around the house for me. Recently paid an out of work friend to paint my living room. Most would rather work than receive a handout anyway.

    • floraposte says:

      @HIV 2 Elway Resurrected: Yeah. I did the same thing with a handy friend–she could use the money, I got stuff done I wouldn’t otherwise have had done. And this is a fine and generous friend who’s probably given me considerably more than I’ve given her, so it was if anything repayment.

    • The_IT_Crone says:

      I am in envy of your ingenuity. I had a roommate like that. Here’s one story:

      I was going to the grocery store, and my roommate in my dorm asked me to pick up some stuff for her. Naturally, I was too dumb to ask for cash up front and lo, she had no money when I returned.

      This is one time that I got GLORIOUSLY even.

      After waiting weeks to be paid, I finally had my boyfriend nude on my bed and covered him with “her” whipped cream, easy cheese, etc that I had paid for. She walked in. I’ll never forget…

      “but… that’s MY Easy Cheese…”

      Then pay me for it, wench!

  13. Teradoc says:

    I almost got burned on a roommate I lived with in college,
    In one of the buildings, we could build room lofts that took up the whole room, basically make the one room into 2 floors. Cost about $900 and some change. Well I put it all on my credit card because it got me the points and he kept saying he’d pay me back. I’d ask him every week – where is the money Bird?
    After about 2/3 the way thru the school year I got kicked off the floor (Frat floor, I was a non-frat member and they wanted a frat person in the room instead). So here I am looking at still being owed $450.00, asking for more than 5 months.
    So I paid two of my other friends $10.00 each to help me move my part of the loft. Funny thing about the loft is, when you removed 1 side of it, the other side is unable to stand up anymore. So I walk in the room with my two friends; saws, hammers, and a cart in tow.
    Told him he was gonna pay me my $450 for his side and I would be generous to let him have my side for $200.
    Can’t believe how fast $650 suddenly showed up from him. Some may call it extortion, but I was tired of putting up with his bull and always having to one up someone on a story.

    • The_IT_Crone says:

      @Teradoc: … I clicked on the right one… and it posted it to another post… great.

      I am in envy of your ingenuity. I had a roommate like that. Here’s one story:

      I was going to the grocery store, and my roommate in my dorm asked me to pick up some stuff for her. Naturally, I was too dumb to ask for cash up front and lo, she had no money when I returned.

      This is one time that I got GLORIOUSLY even.

      After waiting weeks to be paid, I finally had my boyfriend nude on my bed and covered him with “her” whipped cream, easy cheese, etc that I had paid for. She walked in. I’ll never forget…

      “but… that’s MY Easy Cheese…”

      Then pay me for it, wench!

  14. sendbillmoney says:

    I neither borrow nor lend, despite my ID :) This rule applies to relatives as well.

    When I was 19 and newly married, my deadbeat biodad surfaced to ask for “a loan.” He went through his entire plight, which included dining at a local soup kitchen.

    I told him that I recalled him not being concerned what my sister and I had to eat when he failed to pay child support for years, and that his situation left me unmoved.

    • The_IT_Crone says:

      @sendbillmoney: I just want to say that your story made me feel all warm and fuzzy inside.

      I can’t quite do that, as my grandma really helped out the kids in my family so that they DID get food/shelter. I got shafted, but in doing so missed out on her enabling of their swindling personalities. So, I don’t feel entitled to handouts and go COMPLETELY NUTS if I even have to ask someone to lend me lunch $$ because the day our office decided to order in, I didn’t have any cash on me.

      • Charles Duffy says:

        @The_IT_Crone:

        So, I don’t feel entitled to handouts and go COMPLETELY NUTS if I even have to ask someone to lend me lunch $$ because the day our office decided to order in, I didn’t have any cash on me.

        That reminds me of the time I broke down in tears in high school at the realization I’d forgotten my lunch money (and only realized it after going through the buffet) and needed a loan twice in a row.

        Compared to my father, I’m fiscally irresponsible — taking out even a fixed-rate mortgage is something he Just Didn’t Do, instead going up to Alaska or such to work with no expenses until he could afford to pay cash for a house — but generally speaking, I think he did a pretty good job of that aspect of my and my sister’s upbringing.

  15. Jonbo298 says:

    I went through hard times where I was having to borrow money consistently but I paid it back. Very rough time in my life that I’m almost past. I didn’t want to borrow but I had little choice.

    Now that I have a very positive cash flow and saving finally, I help who helped me if they would need it. I had to rely on my grandma for a car loan but she knows I wouldn’t screw her over. Always paid on time and with tax refund put it right to the principal.

    Now as for my mom/brother, I wouldn’t trust them. I lent them money and never saw it again. So that trust was burned. Grandma wised up to it too after she gave and saw nothing back.

    Overall, it depends on the family member. You can’t trust all so best to start small, and see what happens if you can start small. If you see any inclination of nothing in return that they said, hammer at it or have them work for it in return if they can’t pay it back. Heck, if you don’t want to look nosy, see WHAT they are spending and help them figure out something better. Very YMMV on that though of course.

    • HIV 2 Elway says:

      @Jonbo298: I’ve found that Grandma’s won’t take their grandkid’s money. My grandma fronted the money for my first term of grad school (my work reimburses me but I have to front the money at the start of the semester. I sent Granny a $3000 check which she voided and immediately sent back to me. They just love to pamper their grandkids even as they approach 30.

      • floraposte says:

        @HIV 2 Elway Resurrected: It can be tough for parents, too. I’ve got a colleague whose parents both lost their jobs in the last few months. They were good earners and good savers, so they’re not headed soup-kitchen-wards just yet, but she’d really like to pick up a few household costs for them. Which I’m pretty sure won’t fly. (I think they might accept being treated to lunch now and then.)

      • samurailynn says:

        @HIV 2 Elway Resurrected: It always depends. When my Grandma was alive, she didn’t have much, but she always tried to give me what she could (she died when I was still young). However, my husband’s Grandma had plenty of money, but was afraid to spend it. She didn’t even like to turn on the heat in her house to keep herself warm. She died recently, still with plenty of money. It’s a shame she didn’t spend a little more freely so that she could have enjoyed the end of her life a little more. I’m not claiming she should have spent more on her grandkids, just that it would have made more sense for her to be able to do things she enjoyed.

  16. VeeKaChu says:

    Truer words were never spoken than when that first caveman- or maybe it was something single-celled- declared that “money is the root of all evil”. It’s like salt- we can’t live without it, but it’s toxic and deadly when mis-used.

    Personally, I’d like to have more of it than I do, but I try consciously to not let its pursuit or containment direct my actions to the point where it impacts my mental well-being. For example, I’ve danced on the edge of poor-credit health for most of my life (it’s been a lot better the last 10 years or so) because in 24 years of marriage I’ve absolutely refuse to “fight” about money issues with my spouse, because they are so divisive.

    For true friends, what I have is yours if you need it (be it money or weed-whacker). If I don’t have it to give (or lend, if you insist), I will tell you up front. E.G, my best bud of 30 years was forced into a short-notice, inter-state move, and during a phone conversation (he-MA, me-IL), he indicated that he was momentarily cash-strapped and asked if I could send him 40$ to ship some items.

    No problem, I mailed the filthy lucre off, and thought no more about it. Got together with him a couple of months later when he was in town, and he actually told me- as he thanked me for the distribution- that he’d made alternate arrangements for the items, and had actually used the forty for other things.

    This bothered me not at all, because he’s an old and dear friend, and the trivial amounts we’ve spent on each other over a few decades amount to diddley at the cliche’d end of the day. If he offered to pay it back, I’d take it, but I’d never ask.

    Which is not to say I have no limits to my philanthropy- I’m actually not a saint. “Money=evil” in cases where a true friend says “OMG I need 500$ right now!!!” and I say “well OK, but I must have it back in X of days or I default on my mortgage”, and then they don’t repay it in a timely fashion… well sir, that’s where cracks begin to form in the foundation of our friendship.

    I will enter into those sorts of contracts, but with a tad more wariness. And, if it’s absolutely necessary, I would propose one to a true friend.

    All of the above is equally- if not more- applicable to family. It’s easy for $$$ to fuck up even the closest of relationships, and it’s always sad. It’s harder, but in the long run more beneficial to one’s own mental health to just accept that ‘people are people’, and to be surprised by nothing they do.

    • GuinevereRucker says:

      @VeeKaChu: Heh, that saying is from the Bible, not cavemen. It says a lot of true things :) A couple of my other favorites about the subject from the same source:

      “Keep your lives free from the love of money and be content with what you have.”

      “Whoever loves money never has money enough; whoever loves wealth is never satisfied with his income.”

      I’m the same way with close friends, I just have trouble with people I don’t know as well or people who are irresponsible with money. I too find it the best policy to be open and honest about my money, and typically expect others to be the same way.

  17. starrion says:

    Or hire them if they have skills.

    My brother in law is a very good contractor who does great work for less than the “meh” contractors in the area. Even when you consider plane tickets, it’s still worth it.

    YMMV

    Just because MY brother in law has mad skillz doesn’t mean yours does. Try little jobs first. Having to rip out something done wong could be more expensive.

    Make sure he understands code before doing a major job. Father-in-law helped with some aspects.

    \Loves my inlaw families. Marry well and you may never have to do heavy lifting work around the house again.

  18. boricuachick says:

    As a rule, I don’t lend friends money. Period. I have lent money to my family members. When I do choose to lend money to my family, I fully accept that I probably won’t ever see a dime of it again.

  19. TVarmy says:

    This ruins friendships. Unless you’re in a situation that explicitly calls for sharing resources (roommates, for example), no loans should be given or received. I ended up breaking off a relationship with a girlfriend that was otherwise going great because of bad feelings over loans.

    • Charles Duffy says:

      @TVarmy:

      I ended up breaking off a relationship with a girlfriend that was otherwise going great because of bad feelings over loans.

      Arguably that’s for the better, if the relationship might have developed into something more legally binding; losing the money you’ve loaned to your GF is a whole lot cheaper than divorcing after your joint account has been blown.

  20. LiC says:

    I’ve had to borrow money from my brothers, but I always tell them exactly when I can pay them back – 3 months from then when my education loans come through or the first of the month after I get my paycheck deposited.

    Our family’s pretty cool with shifting money around – mom had to get some car work done, and it went on my card, she paid me back in installments over a couple of months.

  21. mewyn dyner says:

    If you know your friends well enough, I don’t think it’s such a big deal.

    One of my friends got screwed over by the company we worked at, by the tune of $2500. He needed about $900 just to stay afloat, and I knew him well enough to know that he’d pay me back. Sure enough, he bent over backwards to pay me back and tried to impart interest which I refused. He even needed help when he moved downstate, to the tune of $500. A month later I was paid in full.

    It’s all a matter of knowing who you lend to. You should know that they are good for it (without having to take their word for it) before lending.

  22. kduhtoe says:

    I heard Virgin Money US (www.virginmoneyus.com) acts as an in-between for loans between friends and family members. I know very little about this service, if it’s worthwhile, legitimate, or insane like Richard Branson. It’s seems like it would be worth looking into if you were going to jump into the dangerous waters of lending (giving) money to family or friends.

  23. Grrrrrrr, now with two buns made of bacon. says:

    I see that other people have had the same experiences as I have, but I’ll post them again anyway.

    1. Don’t expect to ever get the money back. Many friends figure if you can afford to loan them money, you don’t really need it back. Nothing ruins a friendship for me like loaning somebody money and getting the “I can’t afford to pay you back right now,” only to find that in the meantime, they’ve bought an iPod, a big-screen TV, and concert tickets.

    2. In some cases, giving money to somebody just encourages irresponsible financial behavior. Sometimes, people have emergencies due to circumstances beyond their control and they really do need the money, other times they only need the money because they spend every dime they take in on anything that strikes their fancy, or they’re deeply in debt because they’ve defaulted on their their student loans or because they didn’t think of the implications of a $500 a month car loan or running up $10,000 on a credit car. Giving money to these people is just going to reinforce the idea that what they’re doing is just fine.

    • Outrun1986 says:

      @Comrade ☠Grяrяrяrяrяrяrя reporting for duty!: In my case they all knew I had money and didn’t spend it on anything important so it was pretty hard to shake off the friends for money but after a while of just saying no they stopped asking. Mind you I didn’t even have that much money I was just extremely responsible about spending it and saving it, which is why I had more than the next person.

      I know someone who was lent money by someone else (probably because they said they really needed it), then when I was out shopping I caught them spending lots of money on things they didn’t truly need. We didn’t have the heart to tell the original lender, and she likely wouldn’t have taken the advice anyways knowing her personality. This is usually what happens if you lend someone money IMO.

      There is another case where you know people are just trying to take advantage of you. I took a guy a few places in college because I wanted someone to go with and then years later I get calls asking me for rides because of this and this and then asking to borrow money from me. Apparently around here having a car in college means that you are automatically signed up to give your entire class a ride whenever they need it! Fortunately I did not work with this person so he was easy to get rid of by blocking email address and IM name, I think he got the hint after that.

      • Grrrrrrr, now with two buns made of bacon. says:

        @Outrun1986: Yeah, I’m in a similar situation. I don’t have a lot of money, but I save a lot and I’m very conservative about spending.

        I’ve had “friends” give me a sob story about how they were broke and needed $50, but when I reminded them about it, they always said “I promise I’ll pay you next week, okay?” After this drags on for several months and you see them driving a new car or wearing a new leather jacket, you realize you’ll never see this money again. I have another friend who IS always genuinely broke because he’s made terrible financial decisions all his life..spends all of his money, doesn’t save, defaulted on student loans, etc.

        So yeah, if somebody is genuinely in trouble through no fault of their own and they’re a *very* close friend, I’d consider a “loan,” but I wouldn’t actually expect to get it back. Other than that, though..forget it.

  24. DaWezl says:

    When I was young, I tended to be the deadbeat in the equation. I did have one friendship that essentially ended over $50. I was lent it on a trip. I came home before the other person did, and had to deal with some major life changes upon my return–finding an apartment, finding a job, etc, and I was so caught up in all of that, I forgot about the loan. Eventually the friend reminded me about it, and I apologized and paid her back, but she was very hurt that she had to ask me for it, and our friendship never recovered.

    Lately, I’ve been on the other side of the equation, and I’ve learned to treat the money as a gift. I only give the amount that I feel comfortable parting with, even if it’s only a fraction of what the person is asking for. I just say “We really want to help you out, but we can’t cover the full amount you need. This is the amount we can give you.”

  25. opsomath says:

    Everyone is pretty down on the prospect of loaning family members money. I agree that if you have people who are willing to screw you in the family, it’s a non-starter; however, I know of someone in my wife’s family that borrowed something like ten thousand dollars from her mother, at a flat 7% APR, to pay off a very large credit card bill that she had let accumulate. The borrower has a steady job and is generally responsible, but has a weakness for nice clothes and similar. The borrower gets to pay seven percent instead of eighteen…the mom gets a nice seven-percent investment and keeps her kid from getting devoured by credit card companies. Everyone wins.

    Obviously, this wouldn’t work if the parties involved weren’t trustworthy…and I guarantee you that the mom had a physical contract drawn up, signed, and has a copy.

  26. Outrun1986 says:

    Unfortunately this is something I don’t agree with, as soon as you give the person one gift, they keep coming back to you for more and more money. From my experience if you lend someone money, especially if its someone that is constantly in debt, don’t ever expect to get it back yet expect them to keep coming to you for more and more money. This gets even more difficult if the person is a co-worker whom you can’t easily get rid of because they work at the same place you do.

  27. sprocket79 says:

    A friend of mine got burned lending money to a friend. Next time someone asked to borrow money from her she got a legal contract written up and uses it every single time. So now she’s covered. She hasn’t had to go to court to get any money back, yet. The other thing is that some people “change their mind” when she asks them to sign the contract, so she doesn’t end up having to lend at all.

  28. Anonymous says:

    Never loan out money to friends or family. Instead, give the money to them unconditionally with no strings attached. It is the only way to be truly generous and help out someone in need without the added burden of fretting over whether you’ll be paid back in sufficient time, or if relationships will unravel due to non-repayment, embarrassment, estranged feelings, etc. It’s just not worth it.

  29. Brontide says:

    When I was unemployed, going back to school ( nys 599 plan ), and had a few thousand in CC debt ( due to a divorce ) I mentioned to my mother about selling my house to get back on my feet.

    She offered to pay off my CC at 0%. I took maybe 80% of the debt and came up with the rest on my own. Kept the house and finished my degree and landed a nice job. Immediately started paying my mother $250/month. With 10-20% left on the loan she forgave the rest as a wedding present.

    I considered the 0% loan from my mother higher than any CC or other bank loan I might have as it’s family.

    I never offer to loan people money unless I can live without it and I don’t offer to those that are irresponsible as it’s just facilitating their bad behavior. My brother is the prime example, they can never pay their bills, but he is always telling me about this new thingamabob that he bought that will make his gas guzzler car more efficient by running it on water.

  30. Andi Lee says:

    I have helped out friends in the past. Had one friend, she had surgery and afterwards, she had so many complications from the surgery, she was constantly in and out of the hospital and just unable to work. Then her husband lost his job and they needed money because he needed to get some glasses because he had used his last contacts. She felt pretty bad for having to ask me for money since I practically have none and her husband had too much pride to ask, but she asked me anyway and since I had the money and not an immediate need. She did manage to be true to her word and pay me back.

    I likely wouldn’t make a loan to a friend to the amount that would land me on Judge Judy due to not having that much money. I got enough drama loaning in my family whom I just forgive and forget ‘cos they’re in debt and I’m not.

    However, I prolly would not end up helping out a total stranger so easily. A homeless man tried to groom me in a bookstore one evening. He looked and smelled okay so I just chatted with him anyway, but in the end, he just wanted money to eat and a ride. I don’t carry cash anyway so I didn’t have anything to give him except for some snacks in my bag. I wasn’t surprised when he didn’t accept when he said he really needed some “solid food”. Kinda hard to trust strangers when they’re like that.

  31. MrEvil says:

    I don’t borrow from friends. I don’t lend to friends. I always give as much as I can afford to my friends should they ask with no strings attached.

    Depending on the friend I weigh the wealth I gain from having them as a friend vs the wealth I lose from giving them money. For alot of those friends, it’s worth more than all the money in the universe.

  32. ShariC says:

    One thing it seems clear is the case is that there’s an issue at play when lending money to family and friends and that is that their perceptions of your economic condition factors into how quickly and whether or not they pay you back.

    If they believe you are better off than them, regardless of whether you make more or less money than them, they seem to be more likely to justify not paying you back to themselves. There seems to be a lot of talk in comments about people who don’t pay you back because they perceive that you either owe them something or that you are coping better than them so they are entitled to not pay you back.

    Family and friends can do this because they know how you live, but also I’m guessing there is a certain desire to feel life is parceling out an equal situation to both the lender and the borrower. If they think you are having an easier time of it, they adjust the scales themselves by taking your money (making life easier for them) and viewing it as equitable. It’s irrational, and certainly wrong, but it’s something to consider. If the people around you ever remark that you have it easier or seem to be flush with cash while complaining about their lot, it’s probably better not to loan them money.

    Personally, I have never loaned anyone money, though I have given family money gifts (unsolicited) on occasion. They did the same for me when I was much younger (and still living at home). Despite being very poor, no one in my family has ever taken advantage of anyone else when it comes to exchanging cash.

  33. TechnoDestructo says:

    Six hundo.

  34. Dwayne Windham says:

    I just make it clear that I ascribe to the “Stewie Griffin School of Collections”

    For some reason, after that, they don’t seem interested in borrowing anymore…

  35. crunchberries says:

    I’ve loaned money to my family members before, but I usually just tell them to pay it back when they can, not by a certain date. For some reason, ‘when you can’ always makes them pay me back, usually when I’ve completely forgotten about loaning them the money in the first place.

    Now, working for family members? Ha, that’s another story. I was lucky if I ever saw a day’s pay, let alone a day’s pay that wasn’t below minimum wage in, say, India.

  36. Ben Popken says:

    If you’re going to give a friend money, gift it to them. Loans damage personal relationships.

  37. kittenfoo says:

    Though I’m a non-religious person, I think the Bible got it right when it said that when giving alms, don’t let the right hand know what the left hand is doing. In other words, if you give money knowing that the help is about them, and not about you being a white knight, and give without strings, everyone is better off. Yes, I have been the giver and the giv-ee.

  38. deadspork says:

    My friends and I never go in for large sums of borrowed money, but we do “hit each other back.” For example, we went out to a club last night and I forgot to bring cash, so my friend got my cover ($10) and then bought me some cranberry juice at the bar (two at $2 – it’s a private club so they didn’t accept credit cards). After the party we went to a 24-hour restaurant and I bought our food. Did it come out perfectly even? Probably not, but who cares. Sometime when I’m broke she’ll take me out or vice-versa. We don’t keep tabs, more that each of us remembers if the other paid last time, and act accordingly so that no one feels shafted.

    I did have to borrow money from a roomate once to cover some medical expenses (it worked out to be around $100 for my copay but I was seriously broke) and paid her back immediately on payday.

    If you loan someone money under the premise that they will “pay you back on payday”, have them write you a check with the day after payday as the date. That way you know when it’s okay to cash it, and for sure you get your money back.

    • trujunglist says:

      @deadspork:

      I like it when I have a friend that will do that but I’ve only had one. The rest of them have always started that way but quickly evolved into me paying 80% of the time if not more. So, I stopped that.

  39. Japheaux says:

    Years ago our car’s transmission, the dishwasher, hot water heater, and TV all went out within 48 hours of each other…a couple of days before Christmas. Someone anonymously had a dishwasher delivered and installed in our house. It completely changed the way I felt about money and started giving more of our income away. Sincere giving to those who need it can change your own life and reevaluate your perspective of what you think you own.

    That one anonymous gift we received opened doors for us to forward the giving many times over.

  40. Ubik2501 says:

    I’ve loaned my best friend money in the past a few times, and she’s always been very diligent about paying it back. These days I tend to treat her to breakfast or lunch when we get together, since I’m making a pretty comfortable wage and she’s scraping by even though she’s busting her ass (the food industry’s put the screws to her, unfortunately), but she hasn’t asked for any substantial assistance in a while. I tend to be generous in terms of things like treating people to food or letting them have a few beers from my fridge, but I dislike just giving people money. If I do that, I make sure I don’t loan them enough that I couldn’t get by if they didn’t pay it back. Even if they’re not malicious about nonpayment, sometimes circumstances really pile up and they can’t repay right away (or sometimes at all), and depending on a loan being repaid is a good way to create some bad blood. I’ve had family members loan money to me in the past, but I’ve always repaid it and I’m no longer in a situation where I need to borrow anything from them.

    I also do the “hit each other back” thing deadspork mentioned above, where each of us will either cover different parts of the evening’s expenses or alternate paying for takeout/beers. For instance, a few weeks ago I went to dinner and a show with my sister and her husband; they covered dinner, and I covered the show. It’s not so much about monetary assistance as it is about just being generous to each other.

  41. Anonymous says:

    The rule should be “Give, don’t loan”
    This takes the stress out of the giving. You as the giver don’t have to wonder or ask when the money will be repaid.
    The reciever can rest asured you acted out of kindess/love, and will not have the pressure of repayment shadowing your every social interaction from that point on.

  42. locura79 says:

    I loaned my best friend some cash during college on the understanding that she would pay it back when she could. I hadn’t been paid back by the time we finished school, and when I got a real job I just figured it would never happen (but it didn’t upset me because I was making good money). I recently got laid off, and she paid me back all of the money she had borrowed within two weeks. I didn’t even remember how much the loan had been at this point. I guess my point is that I think good friends should be there to help each other out when it’s needed. I also agree about just assuming that a loan is actually a gift (don’t expect to get it back, and it’s a welcome surprise if you do).

  43. trujunglist says:

    Ugh… these days, I’m like a personal bailout for my friends, and it really fucking blows. It’s either avoid them entirely, or end up buying something like food for them. I really dislike it, because they basically expect it to happen, rather than assume that it wont. This has resulted in a lot of unpleasantness and a lot of loneliness for me =(
    It really sucks when you feel that your friends put you in that situation and don’t seem to recognize it and/or are too ashamed to acknowledge it. The worst part is that some of them are now using the “we’re in a recession” excuse for not working, not having saved, having gotten into debt YEARS ago, etc… like the recession is some new problem that has destroyed their lives and not because they were foolish in the past.
    I need new friends.

  44. Tom_Servo says:

    Never loan money to family or friends.

  45. corinthos says:

    I don’t loan anything over 20 unless they leave stuff with me. If any of my friends want to ruin a friendship over 20 bucks then i don’t need to be friends with them anyways and its worth the risk.

    I let one borrow 500 once for 3 months but made him leave his PS3 and all of his games (over 10) with me til he paid me back. He only asked for like 150 but told me a month on it because he had payday loans out at two places so I asked how much and it was around 300. So told him I’d give him 500 but he needs to use it to pay those off and told him to come to me before he goes to those places because he had lots of stuff I wouldn’t mind “borrowing” and I won’t charge interest. He hasn’t ever borrowed anymore from me though and even paid me back a month early. Glad to hear he’s back o nhis feet but I sure wouldn’t mind borrowing his Wii for a few weeks.

  46. Coyoteconscious says:

    I try never to lend money. If I have it to give, I give it.