Lending money to friends or family, or buying something for them when they promise to pay you back or whatever other circumstance causes another person to be in your debt - what do you do when you don’t get repaid in what you consider to be a reasonable amount of time? And what is a reasonable amount of time?
For my part - when it’s family, I wouldn’t have a problem with asking for repayment after a couple of weeks. That’s assuming it’s something inconsequential, not a loan for an emergency - those fall into another category entirely. Bearing in mind that an emergency involves a severed limb as opposed to needing new strappy sandals and a matching bag…
As for friends, I rarely carry cash, so I’m rarely able to lend. But if we were out to lunch and one asked me to cover his/her share on my plastic, I’d be by their desk on the next payday if the debt was still outstanding. We sold something to a coworker that was fairly expensive, and he gave us a check for part of it, then seemed to forget about the rest, but one email jostled his memory, and we had our cash that day. (something to do with money in different banks - I don’t recall. I just know we got it all in the end.) Or the case of one former coworker who was notoriously CHEAP - I’d have never let him off the hook. Petty? Too bad - he was a jerk.
Some amounts, I’d probably be inclined to forget about, depending upon the person. $10 isn’t going to send me into bankruptcy, but if the borrower is getting fancy coffees every morning instead of paying me back, I’m likely to become insistent. I’m also not likely to lend that person anything ever again.
And I think for me, what’s most irritating is not the money, but the loss of trust. I may be delusional, but I like to think that most folks I deal with are honest and not inclined to use me. When that myth is shattered, it bothers me more than the money. No, really! And I do my doggonest (is too a word) to repay what I owe with all due haste. And I have no problem at all with a friend jostling my memory if I forget, because sometimes I truly do. I don’t want someone pissed off at me because I forgot to toss $5 into the community pizza kitty - just remind me.
So, what are your personal limits when it comes to filthy lucre and your associates?
Whenever I lend money, it’s always under the assumption that I’ll never see its return. That way, if it doesn’t get returned, it doesn’t bother me and I don’t carry a grudge over it. If it is returned in a timely fashion, I’ll be happily surprised. Of course, that determines the amount that I am willing to loan people, which is not much more than I carry in my pockets.
Exactly. If I can’t afford to lose the money completely, I don’t offer the loan.
But in little, day-to-day things, I believe in a form of Cash Karma. If a friend of mine is broke, I’m happy to treat them to lunch or a drink. And then when I’m broke, I have plenty of people who don’t mind buying me the same.
I hate worrying about money. It’s one of the pettiest things to get hung up about. I already worry about paying the rent, keeping up on my student loans, and putting something into savings. I don’t bother to stress myself out over loans to friends on top of those necessary money things.
What Montgomery0 and TheMerchandise said. Within the last year I’ve given a couple hundred dollars to two people knowing full well that I’d likely never see the money again. They wanted to call it a loan, I think of it as a gift. If I get it back, neat. If not, oh well.
Another 'round of “ditto” for Montgomery0 and TheMerchandise. I hate money. I hate managing money, I hate owing money and I hate being owed money. If I can’t afford it, I won’t offer it. And it’s entirely up to the person I “loan” it to to remember to pay it back. If they do, they go *up *in my esteem. Nobody goes *down *in my esteem for not paying it back, but that’s because somewhere between 90 seconds and a day later, I’ve forgotten I even gave money to them.
I guess I’m just too cheap/frugal/miserly/something to let it go. If someone said “Give me $20” I’d respond with a laugh. If the same person said “Lend me $20” I’d consider my chances of getting my money back before opening my wallet. I suppose it’s too much to expect everyone to treat money the same way I do.
Heck, even when my kid asks for money, I expect her to repay me. And she expects to repay me, too. Mommy’s little girl…
Generally speaking, I figure money lent to family/friends is sunk money. I don’t actually expect to be paid back. With my daughter, if she says “mom, buy this for me and I will pay you back when we get home” I remind her when we get home for the money, due to the fact that I want her to learn that she doesn’t say stuff like that idly. Most of the time, I will buy her the stuff anyway, and she knows it, but oft-times she will offer as a sign that she is trying to be responsible (she’s 15 and I appreciate any sign of responsibility that she is willing to give!).
I agree with those who say they generally don’t give out any money that they can’t afford not to get back, and consider anything they actually do get back to be manna from heaven.
However, I’ve loaned people larger amounts of money before - my brother had his transmission go out on him once, and I stood him like $600 to get it fixed. The key is to agree, unambiguously, on a repayment schedule before handing over the money. For us, it was as simple as, “$100 out of each of your next six paychecks.”
So don’t lend it. Your relationships to people are always mroe important than money (or should be). If you either can’t afford to lose the money or will resent not getting it back (or both), don’t lend it at all. It just ain’t worth it.
I generally loan fairly small amounts of money at first, to see if someone is reliable. If I don’t get paid back, I’ll remind the person a few times, then drop it and assume that they’re a deadbeat. It doesn’t necessarily mean that we can’t be friends. It just means that I won’t trust them with my money or expensive items. Sometimes I get burned, but most of the time I do OK.
I recently loaned my car to a good friend for a week and a half, since he needed something with a tow hitch. I wouldn’t have done that for any but my best of friends. But I know and trust him.
About a year ago I rented a condo to go skiing with some friends. Some of whom dropped out after we’d paid the nonrefundable part, and appear to think that they shouldn’t have to pay their share. So now I know that if I’m going to do any kind of shared-cost event in the future, I’ll get their money up front.
Oh yeah, the dreaded shared-cost event. I’ve been reading etiquettehell.com with the tales of bridesmaids who are told “You owe me $megabucks as your share of the shower/bachelorette party/brunch.” Makes me glad I’ve never been asked to be in a wedding.
Almost as bad as the big-group meal with one check where after it’s passed around, the person who got a salad and a soda apparently owes the balance of $47…
I guess the moral of the story is to pick friends wisely. Especially friends as financial cohorts. Or get the money up front.
I find that after I pull out the 37-page promisory note that I use as a standard binder on loans, most folks decide they really don’t need the money that bad.
In general, I also only lend money I can afford to lose.
The times that I have loaned large amounts of money:
To my brother, about $3000 for a down payment for a house. He’s pretty anal about money, so he set up a spreadhseet with a repayment schedule at an agreed upon interest rate. He repaid ahead of time (within a couple years?). We’re still on very good terms.
To Friend A, about $500. He repaid half right away, then seems to have forgotten about the rest. I still see him from time to time, and we’re cordial, but not good friends.
To Friend B, about $800. He never did repay me, and we never talk anymore. I tried to call him (he was going through some bad times) but he never wanted to meet again. We don’t say much when we bump into each other.
I think when friends loan money to friends, what happens next says a lot about the character of the person doing the borrowing.
That’s normally my attitude. However, a sister-in-law still owes us over $2500 from a loan from about a year and a half ago. I know she’s in a not-good financial situation, but damn, she hasn’t kept to her repayment schedule and we’re pissed.
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