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Is it a bad idea...
to loan money to friends? What are your thoughts on this?
I've never been in this situation before, and I'm SO torn. Everyone always says loaning money ruins friendships, and if you're going to loan the money to never expect it back. With that in mind, I just don't know what to do...
My BFF is a single mother of two. She used to live with her mom, she and her mom split the rent, bills, etc. One day last year her mom just up and moved out, told her she needed her own space and left her with the rent, bills, everything on her own.
BFF has been struggling to get all the bills paid, and just found a really awesome place in our home town for rent. The rent is less than half of what she pays now. The problem is she can't get out of her current place and into the new place until Feb. 1. The owner of the property will only hold it until Feb. 1 for her if she gives him $400 by the end of the week. She doesn't have a CC, knows she will be getting a tax check in the mail in March-ish and would pay everything back immediately.
It's not a HUGE burden for me - I mean, I'm still going to get my essential bills paid - though money is tight since the holidays just passed. I know that she needs it more than I do. But... I'm not sure how I'll handle the situation if she can't pay it back. (Even though she has the tax check, I'm not naive enough to think that something else couldn't come up in that time.) She's my BFF of 15+ years and I really want to help her out, but.... I dunno...
What would you do? Halp!!
Re: Is it a bad idea...
If you do, sign a contract between the two of you for any amount plus interest owed. Does she know 100% that she's getting a tax refund?
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I would be cautious of this and I only say this because of past experience. I loaned/paid my MIL's bills for a month because she ditched her landlord and left her up a creek. Since the landlord was basically a grandmother to J, I felt bad and paid the rent and other bills due. It was in verbal agreement that she would pay us back, overtime, but I only saw $100 and finally got tired of asking for it and hearing the excuses.
Just know that IF you let her borrow the money, there's a good chance you won't get it back. Will you hold a grudge? Have hard feelings toward her? Just think about this and how you might feel if she doesn't pay you back.
GL!
Eh, I think it depends on your friendship. I've never loaned a friend money but I've done more than my share of picking up the tab or paying for something they needed. I've had tons of IOU's for dinner, paybacks or whatever, but for the most part it didn't happen. I don't really care because it was never a larger sum of money.
Worst case scenario, if she doesn't pay you back, is there a chance she would pay it forward eventually? For some reason, thats enough for me to do something for someone. Maybe its the eternal optimist peeking out.
I guess it would also depend on if you've loaned her money before. I think the contract is a good idea though.
Married / The Cookaholic Wife
the quetion to ask your self is if she didnt/couldnt pay you back would your friendship still be the same. people that borrow money i dont think never have the inteion of not paying back it just seems to happen that way.
i know she is your freind but this is my rule of thumb there is a reason we are all in the sitsuation we are in. the decsion and choices we have made has let us there.you cant hold yourself responsible for someone else life. i have loaned money several times to great friends,family etc and i has NEVER went well.there is a reason for the saying.
$400 dollars is not a crazy amount to have in your saving. if she dosent have it now what will change that she will ? if she hasnet been able to save $ in the past there is a reason why.
That's a good point. I'm not sure that it's necessarily "paying it forward" but she is going back to school for photography right now (completely paid for by grants, so no debt/money going there) and has offered to take pics of K and I - anniversary pics, eventually when the weather gets nicer TTD pics, etc. I always assumed I'd pay her something for them even though she's trying to build a portfolio right now. Maybe if she can't pay it back, I can leverage it into photo shoots for the next "x" amount of time.
The thing I see being different is that when she moved into this place and put herself in the situation, she was only paying half of the rent and depending on her mom to help her. When her mom bailed with no warning, she didn't have much choice. Now her rent will be less than half, so she'll have the opportunity to save more.
To PP who asked is she sure she'll get a refund - I'm pretty sure she'll get a decent sized one since she doesn't have a super high income and she's a single parent claiming two children as dependents.
About holding a grudge - I'm really not sure. It's hard to say. I want to say no, but I can't be sure. I know that she and her girls need the money more than K and I do. But I don't want to get in the habit of this, ya know?
Hi, I haven't posted since we were all still on TK, I've just been coming once in a while and reading...this I had to post on. I just want to give you 3 experiences I have had.
#1. Loaned MIL $400 to fix her car. She said she'd pay us with her tax refund...but by the time she got it, her car broke down again. She has yet to pay us, never makes mention of owing us, and actually makes comments about DH owing her from a cell phone bill when he was 15. Annoys me, but I let it go.
#2. I borrowed $100 from a friend when DH and I first started living together. In return, I did something for her. I lied to the cops and said I was driving when she and her DH got in an accident because her DH didn't have a license and she had been drinking. When she got tight on money, she denied it completely and we didn't talk for a while. When we did start talking again, all she did was ask me to borrow money. I stopped talking to her because all our friendship became was about money.
#3. I loaned $100 to one of my friends (if anyone remembers she was flaky BM who called me a bridezilla and didn't want to go get her dress hemmed). Her and her now ex-DH were having serious money problems, he had lost his job, they were trying to finish paying bills at their apartment to move into a trailer, she just had a baby. She has never paid me back, never mention paying me back, and now spends money like it's nothing. I decided to let it go because she is my friend, I love her son (he was my RB), and it's just better to forget about it.
I try to follow two rules with friends. #1 Don't comment on relationships #2 Don't mess around with money.
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It sounds like your BFF just got screwed by her mom. That is a huge bummer. I think you need to look at your relationship with your BFF to decide what to do. What I mean:
I adore my BFF - we've been tight for 10+ years and, really, there is nothing I wouldn't do for her - and I know the vice versa is true as well. She has never asked for a thing. When we go out for lunch, get our nails done, or whatever, we take turns paying, and we never dicker over the bill - fair is fair. If she was in this situation, I'd just give her the cash with no strings attached - if she paid it back, fine, if not, no big deal - I know she wouldn't be taking advantage either way.
I have another friend, though, who nickel & dimes over anything. I can't stand lunching out with her because we literally have to split the check down to the penny. When we gave her kids their Christmas presents, a comment was actually made that they 'only' got three. Each. I have 'lent' her money here & there - 5 or 10 bucks and never seen anything back. She always complains about having no money but yet has enough cash for her & her husband to go out drinking several times a week. I would never, in a million years, give or lend her the money because she's not respectful of the gift and because she takes it for granted.
Money is always a sensitive subject and everyone handles it differently. I think the key here is more based on your relationship with your BFF than anything else. But that's just my $0.02.
I'm of the mindset that if you "lend" money to a friend or family member, don't expect to actually get it back.
That being said, if MOH (my BFF) needed $400, I'd "lend" it to her. I've lent her money in the past and she's been pretty good about paying me back, slowly but surely.
Even so, I'd lend her the money and either not expect it back or expect it back one day, eventually, maybe.
The Princess of Anything is Coming!
Had a dream I was queen.
Woke up. Still queen.
well, i have never loaned money to a friend bc 1) my friends are usually wealthier than me and 2) i am usually always broke. so i am likely not the best person to turn to for advice on this. HOWEVER, my two cents in case you want it...
she is your BFF. she is in a really tough situation. she doesn't sound like a sketch ball. you have the money in your account. even if you dont get it back, you will be ok financially. you love her. she loves you. you can help, why not do it?
but, you need to trust your instincts is what it basically comes down to!
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Thanks everyone for your advice/feedback. I talked it over with K this morning, and I think I am going to loan the money. Hopefully I won't get burned, but if I do, it's not the end of the world, and I will know not to do it again.
I plan to send the details by e-mail (since we don't live close and it's a bit of a hassle to do a contract) so at least I have the agreement in writing, albeit not signed.
This was kind of my feeling, too, Shauni (and other PPs who said they would "lend" the money). I'm 99.9% sure she'd do the same for me if the roles were reversed.
Money sucks. *sigh*
I only loan money to people when I don't need it back.
That being said, I'd loan her the money to get her out of the situation she's in with her bills that come in every month. This is helping someone out not just now but long-term, making life better for her and her kids. If she was my BFF, I'd want to do that for them.
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