Comments on: How to Lend Money to Family and Friends

By: Miranda

Miranda — Mon, 26 Jul 2010 01:15:54 +0000

@Greg: No, I haven’t, since I don’t lend money to family and friends. I am perfectly happy to provide various forms of assistance (a number of family members have lived with us while looking for work and/or a place to live). We have been known to give large gift cards for birthdays when we know family members or friends are in trouble, and we have bought groceries for others, and are available to help with babysitting. We are consistent in our efforts to help others, though, making it a point to be clear about how long we are willing to have people stay with us, and being clear about our expectations for them actually looking for work, etc., while staying with us. However, if I were to lend money out to family and friends, I would be very up front about it, clearly stating what I expected (since that’s the sort of person I am), and I would probably create a contract via email. Although I doubt very highly that I would charge interest.

By: Greg McFarlane

Greg McFarlane — Sun, 25 Jul 2010 19:09:27 +0000

Miranda, have you ever actually done any of the things you recommend (aside from No. 1)?

By: basicmoneytips

basicmoneytips — Sun, 25 Jul 2010 13:05:13 +0000

I think the best opinion is #1, although it can sometimes be the hardest. Also, I think you have to look at the circumstance and each one is different. If you have a family member who has repeated behavor of some type of self destruction (ie, quitting jobs, laziness, etc) and they know they will always get bailed out you probably should not lend to them. However, if this person has been with a company for 10 years and is suddenly laid off and is really looking hard for a job without success, I may consider loaning them money or helping out.

By: Money Obedience

Money Obedience — Fri, 23 Jul 2010 16:07:19 +0000

I’d imagine that this is a touchy subject for many people. It is for me since I lent one of my brothers a hefty sum of money years ago. He has not repaid the amount after he took it under false pretext. I don’t think there is any way to guard against something like that except for not lending money in the first place. The good news is that I did learn my lesson and that I got to know him a little better. Had I never lent him money I would probably still think much higher of him than I do now. There is nothing wrong with adding a little reality to our perception of our family members.

By: Rita

Rita — Fri, 23 Jul 2010 10:39:35 +0000

If I cannot give them the money I just say I can’t. To ask them to give it back in better times just does not work. There is always a need or a want. The money will not be returned and then there will be hard feelings. So I give the money as a gift or I do not give it at all. I’m firm about this and have never lost a friend because they did not pay me back. Also, even gifts are touchy. I’ve given a gift of money when a friend told me she was in dire need. It saved her at the time but embarrassed her to have to ask and we’ve not been friends since even though I have put forth extra effort.