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Have you ever lent money to a friend or family member? If you have, did he/she pay you back? If they didn’t pay you back did that experience leave a bad taste in your mouth?
A few years ago I lent some money to a friend. The friend was having some financial problems (through no fault of her own) and needed a little cash to keep afloat. She asked me if I could lend her several hundred dollars until she got paid again. At the time I was still in student loan debt, but I knew she really needed the money.
We had been friends for many years so I did not hesitate to write the check and stick it in the mail. I didn’t think much about the money until a few months later when I ended up with a few unexpected medical bills. Suddenly it became very clear to me that I probably should have saved the money I gave her and put it in my own emergency fund.
I gave her a call to see if she was able to repay the money. She wasn’t home. A week later I called her again and left a voice-mail. Still no response. 3 months later when I still hadn’t heard from her I started to get angry. Not at her, but at myself.
Because I didn’t have an emergency fund, my own emergency put me in a bad financial place. Because I was in debt, I was in no position to lend money to other people. In lending the only money I had; I was trying to help her, but was actually hurting myself (or at least taking a big financial risk). To add insult to injury I almost lost a good friend during this crazy ordeal.
My friend felt so bad she had borrowed the money and wasn’t able to pay it back immediately, that she basically stopped talking to me for a period of time. She said she was so embarrassed and guilty that she didn’t have the money that she couldn’t reach out to me until she had the money to return (almost 6 months later!).
The irony of this story is when I had my own financial emergency, I had to rely on someone else to bail me out. A pretty foolish and dangerous circle of debt owed and money lent. Instead of “helping” my friend, I should have told her I didn’t have the money and saved us both a lot of heartache and frustration. I’m thankful that this situation didn’t ruin our friendship and I’m now a firm believer that you shouldn’t lend money to friends when you’re still in debt.
Don’t get me wrong, there’s nothing wrong with giving money to friends and family if you have the money to give as a gift (no strings attached). I give money to my grandparents because I love them and I want to. But if you expect for the friend to pay you back, you’re putting your relationship in a dangerous place. If they don’t pay you back the relationship may be ruined. A good strategy for getting people you don’t like out of your life perhaps Image may be NSFW.
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Have you ever lent money that wasn’t paid back? Ever borrowed money you couldn’t pay back? Did it ruin your relationship?
Image: TaxCredits.net
