I have to first disclose this post isn’t about anyone I know, or an experience of mine, but it has definitely happened to people in my life. In fact, I have never experienced the scenario I describe below, in those exact terms. And I didn’t ruin a friendship, in those exact terms, but me and my best friend at the time got in a fight and we definitely weren’t as close afterward. Money and friendship rarely mix.
She was staying with my at my apartment because she couldn’t afford a place to live, and every morning when we woke up she would ask me about an item she was about to purchase on one of those flash sale sites. I wasn’t mad she wasn’t paying rent, I genuinely loved having her there. This was during my crazy NYC debt pay-down phase, and I was mainly pissed she wasn’t taking responsibility for her financial life. I mentioned to her how I thought her buying stuff in front of me was a) rude and b) irresponsible. I also made the mistake of venting to a friend who later told the girl living with me I was “talking about her behind her back”. Needless to say, the friendship was never the same, but the tips below work just as well too.
3 Easy Steps: How to Ruin a Friendship
Step 1: Friend A asks Friend B to borrow some money. Friend A is simply down on his/her luck and needs a little boost. Friend A promises to pay Friend B back.
Step 2: Friend B agrees to lend money to Friend A, with the understanding that Friend A will pay Friend B back in a timely fashion.
Two months pass without payment.
Step 3: Friend A calls up Friend B to talk about the vacation that he/she is booking for next month. Friend B grits teeth down to nubs and breaks off friendship with Friend A. Well, not really. Friend B doesn’t tell Friend A their friendship is over, but Friend B is no longer available when Friend A wants to chat, hang out, or borrow more cash.
Ta-da! And that folks, is how to ruin a friendship.
Lending money rarely works out when it comes to friends and family members. It just doesn’t, and I’m not talking about ruining a friendship over $20 for lunch. We are talking a firm loan for a bigger purchase like school, a house, or an opportunity. This never works, because I’m going to tell you who is asking you for money:
- Someone who cannot get a loan through an establishment. OR
- Someone who doesn’t apply for a loan through an establishment because they don’t plan on paying it back anyways.
Disclaimer: This is a general rule. There are always exceptions. You may be that exception, but you may not be. If you are willing to risk your money and your friendships over the possibility that you are the exception, then that is entirely up to you.
My advice is to pick an amount that you feel comfortable losing – $5, $10, $50, whatever – and don’t lend a friend more than that amount. Never lend a friend (or a family member for that matter) money you need and/or definitely expect to get back. While you and your friend may be the friend lending exception, it is best to assume any money you “lend” to someone is a gift. You will save so much resentment that way.
After all, you are not a bank. Your friends are also not banks.
If your friend is down on his/her luck – for real, not because they just came back from an extravagant vacation or asked you for cash in the same breath as “look at my new shoes” – and you want to help, you totally should. Give them a gift of cash to help them out. They will promise to pay you back, so smile and nod politely and consider the money gone. If they happen to come through and pay you back in full, it will be a nice surprise and you will have your cash back. If not, you didn’t expect it anyways. Yay, for low expectations!
Have you ever borrowed money from a friend or lent money to a friend? How did it work out for you? What are your “money lending rules” when it comes to friends and family?