We have all been in a situation where someone has asked us to borrow money – our hard earned money. Is friends money a good idea? Is lending money to a friend going to delay your debt payoff? These are all good questions to ask. Let’s talk a little bit about lending money to a friend.
Is It Wise Lending Friends Money?
Most of us have been in a position where we have had a friend come up to us and ask us to borrow money. If you haven’t, you soon will at some point. Not too long ago I read a blog post on a blog called, Disease Called Debt. They featured an article with the premise of using caution when loaning money out to a friend. Their article inspired this post and raised a question for me: is it wise to offer to lend money to a friend even if they have the best intentions of repaying you?
My Loaning Money To A Friend Situation:
I had a friend who was going through a difficult financial time between jobs and a pending move across the country. When he was attempting to rent a moving truck his debit card was declined and quickly put him into a financial bind. My friend asked me if I would loan him the money. I obliged. Of course, he had made the promise that he would pay me back.
Some Things I Had To Be Okay With:
- I had to be comfortable with the amount of money that he was asking for so that he wasn’t putting me in a financial bind.
- I had to be okay with the financial loss in the event that my friend wouldn’t pay me back
Lending Friends Money Can Be Okay
Letting a friend borrow money can be okay in certain situations. It’s not something that will necessarily set you back financially but there are some things that need to be addressed
- If your friend doesn’t pay you back are you okay with the financial loss?
Don’t make a financial commitment that you’re not comfortable with. Think of the lending of money as a purchase. They money is gone. You have to be okay with that.
- Are you okay with not pursuing the issue if your friend doesn’t pay you back?
I have heard of friendships being destroyed over financial pursuits and asking to get money back. Is your friend worth losing if you begin the process of trying to recollect your money? That’s why I think that you have to be okay with taking a financial loss and to not overcommit yourself. In the event your friend gets upset with you for NOT loaning them money then you should really evaluate what kind of friend they were to you in the first place.
My Thoughts On Lending Money To A Friend
There is something to be said for doing selfless acts.
It is okay to give some money to a friend with expecting nothing in return. If they do pay you back, that’s great. Afterwards, the lent money can be applied to your debt when they finally pay you back. Lending money to a friend without expecting anything any return can bring great joy and strengthen a friendship. Just don’t let money lending become a habit and something that the friendship will lean on. You don’t want to become an enabler.
My friend ended up paying me back which was great. However, if he didn’t, I would still be okay with the loss. It felt good knowing that I was helping someone in need.
What do you think? Is lending money to a friend bad for your debt repayment plan? What type of situations have you faced loaning money to friends? Have you had bad outcomes? Good outcomes? There are a lot of pro’s and con’s to this question.