Social Question

Frenchfry's avatar

Do you loan money to friends and family?

Asked by Frenchfry (7564points) August 29th, 2010

My husband , being the oldest, feels he needs to help out his family. Bless his heart. I know that when we give money we don’t expect it back. I feel some take advantage of him. Do you have a rule that you go by when it come to this lending?

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34 Answers

Aster's avatar

Because loaning it would cause bad family feelings, I would just give them money if they asked for it but almost no one asks. It takes a special sort of person to pay a parent back money you owe and it’s not worth the risk of bad feelings when they never pay it back.

JilltheTooth's avatar

My Dad always told us that lending money can just cause problems. Giving money is different. If someone gives the same amount back, then good on them! It’s all about the mindset. Sometimes I give money, never lend it.

stranger_in_a_strange_land's avatar

Same as @Aster, I’d rather give than lend, unless it was capitalizing a business venture. In a business, I’d take a percentage of ownership that they can buy out later if they wish. If it’s just helping someone out of a jam, I don’t want them to feel embarassed if they can’t repay. In fact I usually try to do this anonymously, so as not to face their gratitude.

Pied_Pfeffer's avatar

I’ve loaned money to several friends. The unspoken, internal rules are: 1.) Don’t give money that you cannot afford to never see again, and 2.) Expect the worst and hope for the best when it comes to getting it back.

In a couple of cases, I never got it back. I’ve never lost sleep over it, but occasionally wondered if they did.

Austinlad's avatar

Funny you should ask. I ran into this issue just this past week and almost posted a question seeking advice. But then I made a decision I felt was right and still do.

An out-of-work, out-of-town former co-worker emailed me asking for a loan and promising to repay me as soon as possible. I have the money, but I just wasn’t comfortable making the loan. I came up with several plausibe excuses why I couldn’t, and then just decided to reply with the truth, which is that I’m simply not comfortable lending money and that I hoped she would understand. She replied that she did, and that was that.

My “discomfort” dates back several decades when I was going through a personal economic downturn and had to borrow some money from my brother. He didn’t want to lend it to me any more than I wanted to borrow it, but he did—and when I didn’t pay him back as quickly as he wanted, we had a falling out which to this day haunts our relationship.

Polonius:
Neither a borrower nor a lender be,
For loan oft loses both itself and friend,
And borrowing dulls the edge of husbandry.
Hamlet Act 1, scene 3, 75–77

BarnacleBill's avatar

If they ask me for money, I expect them to pay me back and we work out the terms at the time of the loan. If it’s an outright gift, I tell them so. They have learned not to spend beyond their means.

I would never lend money to extended family or friends, no would I ever borrow money from them. The ones who are well off have never offered to help when it was needed, and we somehow managed.

I would never lend money to a friend or coworker, beyond the cost of lunch.

Frenchfry's avatar

What about if it’s son or daughter? Who is older? Do you have a obligation then being a parent?

BoBo1946's avatar

Depends on the situation. If my mother, brother, or son needed my help, and the situation made sense, would certainly do so.

Aster's avatar

@Frenchfry You really think a parent has that obligation?
I certainly dont feel that way, esp if the grown child wants money for unending traffic tickets. Sometimes you have to let them suffer consequences for stupid behavior.

Frenchfry's avatar

Well this were my huband and I disagree. I say have them learn from their mistakes. He would help them out no matter what. I mean I would feel bad if they had no food or got their electric bills shut off. I would probably help them. BUT Tickets no.

MacBean's avatar

If I had money and someone I cared about needed it, I would give it to them. If they paid me back, that would be great. If they didn’t, I’d be okay with that, too.

mrrich724's avatar

My manager once told me that if you ever lend money, do it with the expectation that you will never get it back. Besides, if you lend $20 or $100 and don’t get it back, she said it was worth the price to pay to get them out of your life (b/c more often than not, they ain’t coming around if they know they owe you $100)

There are some in my family I would lend money to, and some I wouldn’t. I wouldn’t lend to my drug-addicted/alcoholic worthless S.O.S. father. But I wouldn’t think twice before giving money to my grandparents, who didn’t think twice about putting me through private school all the way up to college (and buying me all my school uniforms, and driving me to and from school every day so I didn’t have to take the bus, etc.)

As far as friends go, luckily I have a good enough judgement of character not to make friends with someone who didn’t care about me enough to want to pay me back. (Except once, and I was in college so I needed the money as badly as he did. I hounded him for that $, he payed me back, and then avoided me after that). But out of a fairly large social network, I’m proud to say I have good enough friends that it’s only happened one time.

LuckyGuy's avatar

I’ve done it a few times (more than $10,000) and was always paid back- even if it took a few years. I’ll admit I was concerned but there never was cause.

I even bailed someone out of jail once so they would not have to pay a bail bondsman. That small sign of trust got paid back to me many times over.

Simone_De_Beauvoir's avatar

I have no money to loan but if I did, yes I would loan to family and friends have done so in the past (in some cases knowing there’s hardly any chance of getting it back). My best friend has loaned me money when I was in a tight spot – it’s been years and I still haven’t paid all of it back but that kind of stuff doesn’t come between us, we’re friends for life.

Coloma's avatar

I have lent money, but agree, giving is where it’s at.

I lent a friend 5k a few years ago and she paid it back over the next 18 months or so, but…there were a few dicey moments, mostly related to her telling me what she was going to pay, rather than asking if the agreement of a set payment would be okay with me to alter on occasion.

I had no doubt she would pay me back, but… the feelings that can arise are not worth the anxiety.

In my daughters case, no lending, ever. Only gifts.

Short term stuff no problem, such as last year traveling and a friend could not access their atm card overseas in one location so I paid their way for a couple of days in a particular remote town for a tour and meals and hotel.

All situations are different but in general, I prefer to give rather than loan.

hug_of_war's avatar

I would only lend money if they were in truly dire straits and had cut back on luxuries. I am less strict about giving money because I don’t expect it back. But because I don’t expect it back giving money isn’t something I can afford to do very often.

Oh and I’m not big on giving money to friends unless we’re really close.

Scooby's avatar

I stick to my Mothers philosophy, “Never a borrower or lender be”……I’ve gifted a lot of money away but that’s my business……

Seaofclouds's avatar

My husband and I agree that we aren’t going to loan anyone money. If we can afford it, we will give it, but we don’t really want to have money hanging over any of our relationships. If the person wants to pay us back, we will let them, but we won’t be expecting it. I have borrowed money from my mom and step-dad in the past and always paid them back. Before they gave me the money, we had an agreement in place. We didn’t have any problems with it, but I’m very happy to be in a place now where I don’t have to do that anymore.

aprilsimnel's avatar

If a family member or very good friend asks for money, if it’s within my means, I give it to them. Loans in those types of relationships are just asking for trouble.

phoebusg's avatar

Yes. What comes around, goes around or such. Helping others helps yourself indirectly. Provided you live long enough to prove the rule.

BarnacleBill's avatar

My obligation to my children as a parent is to make sure they understand how to manage their money and the importance of savings. That means you don’t live beyond your means, whatever those are. My oldest daughter took a second job, and is using that check only to pay off her student loans. It’s not killing her. She drives an old car, takes her lunch, wears the same clothing, doesn’t have cable. Again, it’s not killing her. She also has $5000 in the bank for emergency savings because she learned by experience that it’s important to do have savings.

My youngest is still listed as a dependent because she’s paying rent off a minimum wage job. I pay her tuition, and non-routine care maintenance expenses. She does not have a credit card because she cannot afford to make payments on a credit card. She lives off a budget, and if she doesn’t have money for food, she comes here to eat, or lives off ramen noodles and peanut butter sandwiches. She does not go out socially if she cannot afford it, but stays home or hangs out with friends. It has not killed her.

I have lent them money, they have paid it back.

Aster's avatar

@BarnacleBill Terrific kids!!

Hawkeye's avatar

I suppose if they asked I would.

NaturallyMe's avatar

Fortunately nobody has ever asked this of me. But i certainly wouldn’t lend anybody a big sum of money that will place any sort of strain on my finances. I would gladly give money to certain close family members should they need it, but there will be a limit because i’m not wealthy in a way so as to regard my funds to be in an unlimited supply to other people. However should someone undertake to pay it back and they don’t when they are able to do so, i’ll never lend them money again.

Blondesjon's avatar

Nope. I’m the guy friends and family lend money to.

stardust's avatar

It depends on who needed the loan. In the past, I helped family members out financially on different occassions. I rarely got the money back and I was seen as a go-to person. It caused more trouble than anything.
If a friend needed money and I had it, I’d certainly give it to them. If I was stretching myself thin, I’d explain that I’d need it back when they had it.
I don’t have many friends who’d ask unless they really needed it.

josie's avatar

Never loan to friends and family. Either give it away to them, or find other ways to help out. On occasion, when I have given the gift of money, I have said “If you chooose, pay me back when you can”. Sometimes they do, sometimes they don’t.

Pied_Pfeffer's avatar

It sounds like those of us that are willing to pull out the wallet and open it up to others are in the same vein. Call it a loan or call it a gift…most of us don’t expect to get it back. If a person asks for a loan, it allows them the dignity to accept it with, hopefully, the intent to pay it back for their own sake of mind.

Coloma's avatar

I love to give off the cuff.

The kid in front of me at the gas station that is putting $4 in change into his tank, I’ll toss in a extra $10

Random giving is one of the best feelings in the world, helping without being asked, making anothers day.

MaryW's avatar

We love to give and to lend to family. But lending often turns into give and so with family members a person needs to be prepared for that.
@josie gives great advise on that.

shpadoinkle_sue's avatar

Immediate family, yes. My friends and I will pay for things like food and movies instead of actually loaning money.

YARNLADY's avatar

The only time I loaned money to a family member, it has not been paid back. We wrote up a formal loan agreement, but it was finally revised to “they will pay me back out of their share of the inheritance”. This remains to be seen.

Any and every other request for “loans” have been resolved as gifts from me, and nothing else. I can’t bare to have them owe money that they will never repay.

downtide's avatar

I would only “loan” what I could afford to give as a gift. Which isn’t much.

nicholascage's avatar

Of course, because they are one of the most important parts in my life and only if i am not very poor, i will help them as possible as i can.

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