This is a public service announcement. Friends and money do not mix. There is a very good reason that banks run credit reports before giving out loans and unless you can afford to lose hundreds or even thousands of dollars...never lend money to friends.
I once had a friend that had fallen on hard financial times. Over the course of our friendship, I loaned money, paid for countless meals, advanced rent, and even hired her (and paid her well) to pick up my daughter from school once a week and babysit her while I worked late. I loved the friendship until the day came when somebody gave her money on my behalf and she kept it. It got back to me from another source and I confronted her. She insisted it was an oversight and apologized profusely. I accepted her apology even though I knew It wasn’t an oversight. I deducted the money she owed me from my next payment to her and began to rebuild the friendship. Ultimately, the friendship ended because she felt that I was unreasonable for asking her to pay a late fee that she owed for picking my daughter up late from school (for the third time).
In a way, I blame myself. Would we still be friends if I didn’t blend our friendship with money? Was $13 really worth it? The short answer is obviously no. The long answer is that I resented her for being in such a dire financial situation that it repeatedly prevented her from doing the right thing and instead transferring that responsibility to me.
Don’t get me wrong. I have denied loans before but, in certain cases, it has been hard to say no when I know how bad desperate times can be. In retrospect, however, it is very rare that the need is ever really that desperate or that you are the only avenue available for money. In the end, your loan often does them a disservice by giving them money to further misuse and — worst of all — it opens the door to the destruction of your friendship.
So what have I learned? Even under ideal circumstances where both friends are entering into the loan with the best of intentions, things can get very tricky. The problem is that money creates an obligation and both sides can become resentful. Oftentimes, the friendship conveniently drifts apart before the debt has been paid.
“Just say no” to loans with friends. Change the subject. Say you’ll “think about it” or that you “can’t afford it.” Whatever you do, don’t lend more money than you would be bothered to lose in a lost wallet. And if former “friends” owe you money, let it go. Let it be the price you paid for the lesson that will save your next friendship and the dark cloud that follows their wallet around.
This has been a public service announcement.