• Skirnir Hamilton

    This is a really hard thing to do. My husband and I have the policy of making no loans to family or friends, but it is hard to explain it to my dad and my mom as they are divorced for many years and neither make well. My dad spends money like it grows on a tree and has always had money given to him by his mom until she passed away and never really learned anything about money. I do feel bad not helping him, but how can I give him money when I know it won’t do any good, until he gets his spending under control? My mom, on the other hand, spends better, but has a limited income as her husband, my stepfather, is retired and not doing as well physically as he used to. But they never saved any for this contingency over the years. It still doesn’t seem like I should swoop in and help them, and how could I help them and not help my dad? So I just say I have a policy of no loans. I try to help by giving a gift card they can use or a check for Christmas and birthdays, but that is about it.

  • http://pulse.yahoo.com/_FVIKWKXA2XO6YECZKBMZLURLXY Martin

    Don’t feel guilty about not lending money to either family or friends if those people cannot manage money. I learned that lesson a long time ago when I was a kid. Just about every person that bugs you for money is like that. They tend to have no moral compass and appear to never feel bad about not paying your back. I remember what my mother told me after I complained how I was never being paid back. She said to ‘cry poverty’ the next time it happens. Since an early age and continuing today, if I am ever asked for a loan, I simply say ‘I don’t have any money to loan you’. It does not bother me that they believe I have the money anyway. I know a family member who never managed money and totally was dependent on her father to rescue her anytime she needed money. The father spoiled her. She never paid back anything. After her Dad died, for the first time in her life, she started managing money. Why I am mentioning this is an example that people who bug others for money can learn money management skills if they have to and stop bugging other people for loans that will not be paid back.

  • http://beyonddave.com Cassie

    Making the decision BEFORE you are asked makes this much easier. Our family has a rule –we don’t loan money. We value our relationships and loaning money puts those relationships at risk. We may give money to friends or family as we can afford but we don’t loan.
    I loved your alternatives to loaning right up until number 6. People only need a co-signer because there is a good chance they will not repay. If you co-sign you are risking your money and the relationship.

  • Pingback: MoneyCrashers: 10 Reasons to Never Lend Money to Friends and Family « Beyond Black & White()

  • Kaydiane57

    I have made a loan to long time friend of 36 years, but not without an” I owe you” statement, signed by the person requesting the loan. She was really suprised that I would even suggest such a thing until I explained: What I said was, If she dies, I would have no recourse retreving my money from her family as I would have no proof of the loan. That was the end of story. I gave the loan & was paid back at the time stated in the” I owe you!”
    I felt uncomfortable at first, But got over it, I work hard for my money!!!!

  • sam

    I never ask to borrow money unless basic survival is at risk. I expect the same from others.

    When you ask to borrow money from family / friends … what they are asking is that you put THEIR interest ABOVE YOUR OWN.

    Unless their situation is dire, such as basic survival … you can be certain THEY would not do the same for you. WHY? Because they have some belief that their concerns are more important than yours.

  • Darcy

    I always am on paycheck to paycheck with a full time job and debt management. I was always willing to lend a friend some money frequently however I knew a friend with a teen has no job. A friend always tries to find a job but hard to find one. A friend has a SSI. Regrettably, I told her not to pay back when every time problems comes up unexpectedly. So many years, she came to me for lending and I did. This time I told her I am not able not to lend this time. She thinks I lie about having extra money to lend because of biweekly paycheck. She refuse to accept No from me that there is no more lending. I have to get my money problem together first before I think about lending. she keeps calling about money but I am so tired of saying no or not to answer her phone. Point is that you do not lend friends whose have no jobs. she would point out money is for her kid and it did usually for her kid. But I couldn’t do it longer. I have no problem to lose a friend who still refuse to accept No lending.

    • Pickley

      My friend had the nerve to get mad at me, too. I told her no because I had to have a small medical procedure done. Shes selfish.

  • Ponder Walt
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  • Sandra

    I have relatives who keeps borrowing money and get hurt when I reject them. I have money to lend though but got tired of giving them favor when I don’t see them working hard for themselves. They will have tons of promises saying they will pay back but the moment they receive the money They become quiet as if nothing happened and never think of the responsibility of paying. It hurts. It sucks.

  • Pickley

    I never loan money; I only give it. But I dont give loans for things like rent or bills, or anything short a person potentially starving. this kind of loan should be no more than $100 usually. And yes, i gift it. I dont expect it back.

    Anything else is not really urgent, in my opinion. If youre about to lose your house, me giving that person will likely only delay the problem. That person will be broke again and will not be able to pay me back. That person will just have to recover from the loss, and I know its hard, but im not wealthy enough to take a financial hit for someone else.

    I do have one friend and shes always hitting me up for small cash loans. I gave her a couple, but now, I just I dont have it. I cant affors it. Shes even tried to get me to cosign accounts and help her rent apartments. I just my credit wont do it, but in truth, my credit is good.

    Still, its quite annoying. I dont know why she thinks her actions are okay.

  • frank

    People are always backing me into a corner to “lend” them money but I have taxes and bills to pay as well as a house to fix. They are always traveling and giving money to other people. Sick and tired of it so when askef for money I say I dont have any. These a**holes cant manage their money and dont care about me.

    • mlyffe

      I totally understand they pressure and guilt you into it and when you finally say “no” it’s like you’re the bad guy!

  • mlyffe

    I really try to help when I can but I realize it’s a very short-term fix as in the end it only defers the inevitable. My family thinks we have a pot of gold from which to disburse funds from. My spouse and I are savers, moreso out of necessity. We have family and financial obligations of our own but there’s that annoying guilty feeling that makes us cave in time and again. We have stopped loaning and only giving what we can part with. We still believe it is better to give than receive but don’t like being taken advantage of. We’re really trying to pay down our mortgage and have started gifting smaller amounts and have noticed some major changes in attitudes of the receivers.
    Good riddance!

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