Never Ask To Borrow Money From A Friend Or Family Member

Never ask to borrow money from a friend or family member. If you do, you're likely asking for trouble. You might no longer be friends once money is involved.

It is much better to find a way to come up with the money on your own, especially if it is a want and not a need. This will teach you patience and discipline.

In addition, never lend money to friends or family members. Instead, just gift the money instead. You don't want to feel resentment when they are late paying you back or never pay you back.

Two Rules Of Money To Follow

When it comes to money there are a couple rules I encourage people to follow.

The first rule is: Never tell anybody how much you truly make. You can share a portion of what you make, but not the entire number. Be particularly careful if your income is more than 50% higher than the median or average income for your age. A portion of people can't help but become envious and despise you if you make more than them.

The second rule is: Never ask to borrow money from friends and family. As soon as you ask to borrow money from friends and family as an adult, you lose their respect and honor for you. And if you are a Financial Samurai, you value respect and honor above all else. Asking to borrow money from the people you care about can lead you down a deep dark hole.

Let me share with you a short story about how one man asked to borrow money from his close friend and girlfriend and what happened after. I'll also share with you reasons why asking to borrow money is one of the worst financial moves you can make.

Never Ask To Borrow Money From A Friend Or Family Member: Keeping It Loose

Never Ask To Borrow Money From A Friend Or Family Member

I met a man named Vien at Lucky Chances casino one evening. He was sitting next to me at the $1-$1-$2 Texas No-Limit Hold'em table, swiveling what looked like a cognac. $1 was the rake, $1 was the small blind, and $2 was the big blind.

Vien was what poker players refer to as a Maniac, a wild player who bets big with mediocre hands. Vien had already bought in four times for $200 each because he kept trying to bluff more skilled players out of a pot. One time, he went all-in on a guy who flopped a set of Kings. All Vien had was a 10-high.

I'm usually a tight, but aggressive player when I have winning odds. But this night, I found myself playing a little looser than normal because the $44,500 worth of Tesla stock I had bought for an average price of $289.46 in 3Q2018 had miraculously broken $500.

Tesla Stock Holdings

I had already mistakenly sold about $50,000 worth of stock when the stock hit $420 because there was a point where I was down about 30%, or $28,000.

Tesla stock ownership and Financial Samurai - Never Ask To Borrow Money From A Friend Or Family Member

With realized gains of $15,000 and $35,000 in unrealized gains at the time from just one stock, I could afford to gamble $1,000 at the poker table and have some fun. I bought in for $200.

Vien and I had a couple good battles where we'd try and bluff each other off our hands. I lost a $140 pot with a mid-pair but beat him in a $220 pot with a straight. We kept it loose! It was all good fun.

The Struggle With Debt

Vien then began talking about life and how he was trying to make $7,000 in poker winnings to offset some baccarat losses he had sustained on the other side of the casino floor. Vien was unshaven but well dressed with a black $6,000 Hublot watch. He appeared to be in his late 30s.

I asked him how he got down $7,000 when you can't start a gambling tab at Lucky Chances. He said the $7,000 was from borrowing $5,000 from his best friend and $2,000 from his girlfriend. He lost it all.

“I tell you, man. I was feeling it that night! At one point, I was up $2,600 after a couple hours. But suddenly, my luck started going cold. I couldn't catch a lucky break. And when I pressed, I just lost more.

Never Ask To Borrow Money From A Friend Or Family Member
About $580 in chips

Now I'm here playing this $1-$1-$2 game trying to win some money a little at a time. But I have no patience for this small game. I was making $100 – $200 bets in Baccarat. Here, a big bet is like $40,” Vien explained.

Shouldn't Be Gambling With Money

Vien later admitted that he shouldn't be here, but that the casino was only a five-minute drive away and his girlfriend recently moved out, disgusted by his gambling habit. He didn't know what else to do but come to the casino to at least play with his good friends.

About two and a half hours later, Vien finally got up and left. He decided to shove all-in pre-flop with his remaining $80 on a suited King-10. He lost to a pair of pocket 5s. Overall, Vien lost $1,000 at my table that night.

Why You Should Never Ask To Borrow Money From Family Or Friends

If you're an adult over the age of 25, I say never ask to borrow money from family or friends. Here are the reasons why.

1) You will make your parents feel like failures.

Good parents spend an inordinate amount of time and money raising you. A great portion of parenting consists of teaching a child what is right and what is wrong. Further, a good parent will also teach their children about the importance of work ethic, saving and investing, and not buying things they cannot afford.

The entire 18-21-year parental journey is about teaching a child how to become an independent adult so they can fend for themselves in this competitive world. If you ask your parents for money as an adult, especially after the age of 25, you will have completely negated all their efforts as parents.

Your asking them for money will make them feel like complete parental failures. They will question what they did wrong. They will go through years of examples and wonder what they could have done differently.

Rightly or wrongly, they will wonder if they raised an entitled child who does not value hard work and discipline. They will be baffled why you can't find other ways to come up with the funds to pay for your wants, needs, or errors. Of course they will also be genuinely concerned what's going on.

Bottom line: If you love your parents, you will not want to make them feel like failures after they've spent two decades raising you.

2) You will increase your chance of losing your friend.

Although a good friend should be willing to lend you money, privately, he or she will wonder whether they should continue to be your friend. They've got their own problems to worry about. Do they really want to be encumbered by a friend who has money issues so bad that they're willing to ask you for money?

Although friends should help friends, friends should also try to make a friend's life better, not worse. The only exception is if your friend is so rich that borrowing the amount you need makes no difference. Even so, your rich friend might stop wanting to hang out with someone like you.

Vien did mention that he feels an immense pressure to pay back his buddy. Not only does he feel the pressure, but he also said he feels very guilty for putting his friend in a tough spot. His friend has two kids and didn't tell his wife he lent Vien $5,000. As for his girlfriend, well, she already moved out. He'll pay her back eventually, maybe.

Bottom line: Friends don't ask friends for money.

3) You demonstrate your inability to handle your business.

By asking a family member or friend for money, you are explicitly telling them that you do not have the willingness or resourcefulness to find ways to make more money or find alternative means to borrow money. You also make them believe that if they lend you money, you're just going to end up borrowing more money in the future.

Unless you have a medical mishap or are facing a life or death situation where a loan shark is going to execute you by midnight tomorrow if you don't pay him back, there are plenty of ways to get money before risking your relationships.

For example, credit card companies have been handing out credit cards like candy in this bull market. Even if you have poor credit (<660), there are plenty of credit cards that will lend you money via a cash withdrawal.

Credit Card Debt Is Expensive

The average credit card cash advance interest rate is about 24 percent, or 7 percentage points higher than the national average rate charged on consumer credit cards. You also have to typically pay a 5 percent withdrawal fee, or $10, whichever is greater. In other words, if you take out a $1,000 loan, you've got to pay a $50 withdrawal fee.

Even though a 24 percent interest rate is outrageously high, that interest rate is for one year. Even if it took you a full year to pay back the $1,000, wouldn't you prefer paying a $240 interest + $50 withdrawal fee rather than crushing your pride and risking a precious relationship?

Get A Personal Loan Instead

There is a better solution. Instead of withdrawing cash from a credit card, you can privately apply for a personal loan with a lending marketplace like Credible.

The industry average interest rate for a personal loan is 10%. But the interest rate can be lower if you have a good credit score. 10% is better than the 24% average you would pay with a credit card.

Average Personal Loan Interest Rate versus Credit Card interest rate

Even if you had to borrow $10,000 and pay a $1,000 interest payment over a year, wouldn't you rather do that than face the shame of asking your parents for money after they've already paid for so much already? The answer seems clear.

Finally, if you have a 401(k), you can borrow from it and pay interest that goes back to the account.

If you have tax-advantaged retirement plans, like a 401(k) or IRA, you can also utilize the 60-day rollover rule to temporarily borrow money. You just have to pay back all the funds within 60 days to avoid a 10% penalty and taxes.

Bottom line: There are plenty of ways for you to borrow money, raise money, or make money without burdening someone you care about. Protect your honor.

Asking For Money As A Last Resort

Let's say you simply cannot qualify for any type of lower-interest-rate loan and are unable to drive for Uber, assemble furniture for TaskRabbit, find freelance writing opportunities at Upwork, flip burgers at McDonald's, or mow your neighbor's lawn. I've done all those jobs and they are so tiring!

You're also unwilling to sell any belongings to raise cash. In fact, you're so desperate that you're looking at payday loans that have an average annual interest rate of 391 percent. Don't do it! There's a better way.

Best Way To Ask To Borrow Money

The best way to ask for money from a family member or friend is to not ask for money but to ask for a job you can do for them. By asking to do some work in exchange for money, you save your pride, protect your friendship, and make your parents proud that you still know the value of work.

You don't have to go into detail why you need the money. You can just say you need some extra side hustle income to pay some bills or save more for retirement.

Everybody needs some help with something. Perhaps your parents could use your help to clear out the garage that has piled up with years worth of crap. Or perhaps your friend could use your help to watch her kids while she goes away for a weekend. Or maybe you could provide some consulting advice in a field of your expertise.

Whatever the case may be, most people you ask to do some work for will feel much better about the exchange compared to a straight ask for money. Sure, you can offer to pay an attractive interest rate in exchange for borrowing money. But it's just not the same.

Your relationships are extremely important. Never jeopardize them by asking to borrow money. There are plenty of other ways to get rid of your financial burden!

If You Need A Loan, Here Is A Solution

If you're looking to borrow money, consider getting a personal loan through Credible. Credible is a lending marketplace where lenders compete for your business. Y

ou can get real, pre-qualified quotes in just 2 minutes. It's free to sign up and see what you can get. Rates have come down. Just remember to borrow responsibly.

Resources For Greater Wealth

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82 thoughts on “Never Ask To Borrow Money From A Friend Or Family Member”

  1. This doesn’t make sense, at least in context of wealthier investors. They all get private loans from wealthy individuals – including family members, if possible. It’s not because they can’t get bank loans, but because the terms are better and the family members get the interest instead of the bank. Lots of your articles are really informative and educational, but this one makes me question if you really know your stuff…

  2. Ashley Welborn

    This is the most stupidest article I have ever read. Parents don’t lose respect or feel like failures, if a child ask to borrow money. They feel concern. If you’ve done everything possible to keep afloat and you have ran out of options, it’s okay to ask for a few dollars. Swallowing your pride is hard enough for some. And moat people don’t sit and gamble their money away. This example was ignorant. People do work hard, they do sell all their belongings and still come up short.

    1. Thank you Ashley for your comment. Parents feeling concerned is definitely one of the main emotions. And I’m glad you don’t feel disappointed in your adult children for asking you for money. However, many parents do, and wonder where they went wrong since they had 18+ years to teach their children about life and money.

      I’m assuming you stumbled on this article via an online search. What’s going on in your household?

  3. Long time reader, first time poster :)

    When I was in my mid-20s (I’m in my mid-30s now), I started taking care of my sick mom and was running low on cash as I was the sole provider for my parents (their small business bankrupted because her illness lasted 10+ years). One of my best friends asked me if I needed a loan of 10K and I took the lifeline. It took me about 8 months to pay him back.

    When I asked why he was willing to loan me such a large sum of money w/out any documents to prove that he loaned me the money, he said he did it because he knew I was in a true bind and I once helped him out (about $3K) when he really really needed the money for medical-related things (which he paid back). He said he knew things might go wrong because he’s seen money sour relationships but that he would have been okay with me not paying him back because he’d know that I was able to get out of the bind I was in. He just really wanted me to be okay.

    We’re now both in good financial situations (as we are super responsible) and will probably never get to that point again where we need to borrow money from each other, but it feels good to know that there is someone who has my back if things got rough.


    After my father (who was my mom’s full-time caregiver) passed away suddenly, I visited my cousins in Korea so my mom can see her extended family. When I had to fly back to the US for urgent work for a few weeks… I realized my mom’s older brother (my uncle) who my mom often said she regarded as her “father-figure” hustled her out of a small real-estate property my dad had left my mom.

    As mom was only in her late 50s at this point and suffering from early-onset dementia, we were going to use the sale of that real-estate to help pay for her care because I was now the sole-provider AND caretaker (in my 20s!). His excuse was that my parents borrowed money from him 20-something years ago and that really affected his finances (bullsh*t! he was super wealthy but lost it all in his 50s/60s due to some bad real-estate investments).

    I was flabbergasted. The money would have been like 80K. All of our relatives who knows about this are scared of upsetting my uncle so they’ve glossed over the issue and no one has called him out on it. I couldn’t believe that someone who lectured about always putting family/blood first would do this do his own sister who just lost her husband and was suffering from extreme illness (and early-onset dementia)! Disgusting. I cut ties with ALL of my extended family.

    Sorry for the rant. My mom passed away two months ago and all the past wounds are rising to the surface again thinking about family and money.

    1. Steven Scott Pollock

      I have the same uncle ,greedy,selfish and fake..All these years thinking he was a good person and family .So wrong.

  4. When buying my house, I borrowed $2000 from my parents to put in the bank to give the mortgage company. My dad knew it wasn’t going to be spent, and that I would return it after a few months. When I did attempt to pay him back, he told me to keep it as a present for the birth of my son. Years later when my younger brother approached me for a loan for the same purpose (a much higher amount), there was no way I could not loan him the money (he did repay me). I will take a chance on family. Any other loans I consider lost money. I don’t loan it if I can’t do without it. If I get paid back, it’s a bonus.

  5. In general I agree with this post. In reality I did the exact opposite.
    I got a 10K loan from a friend so I could renovate my kitchen in my fixer-upper house. Face value that sounds insane and shallow, but at the time that money was a cash life line I needed to increase my quality of life. It took me a few months to begin paying this friend back (3, I think?) but then I made it a point to pay the friend first and pay the entirety of the loan back asap.
    I managed to do so in 8 months. Friend was good with that, I was great with that and the house was so much more livable – success story in my book.
    I think my code as a borrower:
    1. Don’t borrow money from friends/family unless you absolutely have to.
    2. If you do borrow money you HAVE to pay it back. It’s incumbent on you the borrower, in order to maintain the relationship and show your integrity to pay your lender back.Even at your own inconvenience.
    3. Don’t, if you can, ask for a loan from someone more than once. It’s your ace in the hole if it’s even available to you in the first place and it’s not something to be taken lightly or repeated (sans some completely unforeseeable event).
    As a lender:
    1. Don’t lend money to anyone you don’t know very well.
    2. Don’t lend money you aren’t willing to be OK with getting a default on.

    Grey Area Story: I let a sibling and his then wife move in with me during a time of real financial downturn for them. He didn’t want to move in, but did so as a last resort. It was not a good experience for any of us, but I hosted them for 3 months, and covered the housing expenses, utilities, and some food during the time. After they moved out I kept their cat and home furnishings for another 6 months as they divorced and set up their separate houses. I continued to invest in him and the ex thru child care and other expenses. Given how rocky his life and marriage were at the time, and how I codependent-ly just wanted to help out, we did not sit down and have a frank conversation about reimbursement of any kind or how I really needed to hear a genuine “wow sibling you really helped me and I truly appreciate it”. he also borrowed actual money from a different sibling to cover some debts.
    In the end, once all the dust had settled it was the ex wife that at least acknowledged my time/money for that really rough time. My sibling remarried quickly and doesn’t speak of that part of his past. He has not, to my knowledge, repayed the other sibling. He is in a better place financially, but spends on priorities for his ‘new’ life: the engagement ring, wedding, the new house, remodeling the new house, a new car, a new baby, etc. Also there are parties where I am expected to bring presents to celebrate these life milestones. I find that all annoying AF.
    This experience has soured our relationship because I no longer see him as a person of integrity that I can trust. And I don’t know how to address it with him.
    Note: I did not lend him any money directly. I did invest in him and use portions of my money to help him out. He doesn’t necessarily owe me recompense for that. I guess my unrequited hope/expectation in such a case would be acknowledgement and genuine genuine thanks on sibling’s own volition. Maybe a bottle of some good beverage :)

  6. LOL this guy! Sam, you updated the image to reflect the 20% increase in TSLA after you published this days before?! Now that’s just bragging, lol. What happened to stealth wealth and being humble? hahaha Still, good job, you’re killing it!

  7. Oh boy, we just asked my husbands parents for money to be able to afford our 4th rental unit. Do I feel like a loser? Hell no! We are a family with three young children and we chose to be financially independent, without a ‘real’ job, as they say. Problem in our country is that rent doesnt count as income, and if you dont have a ‘proper’ job, banks wont give you a mortgage. So, even though we had 90% of the money we needed to buy the property, just sitting there in saving accounts, our bank wouldn t allow us the mortgage for the remaining 10% of the money.
    So we politely asked my husbands parents if they were willing to help us out, and they did!
    We agreed to pay the full sum within 24 months back, they didnt want us to pay any interest (I m grateful for that!).
    So here we are, 3 months in, and we already payed back 1/3 th of the amount. The whole amount will be payed back this year. (It helps a lot that we got some good renters in the new property).
    The parents are happy they could help us out, because our investment properties are part of the heritage we want to give to our own kids. We are grateful we could get the loan from our parents and now we get the freedom to pay as much/ as little as we can, within the given time period. (The loan will be payed of within 15 months instead of 24 months).
    So no, I think its great if people can help each other financially. I plan on helping out my own children when I feel the money will go to a good cause.

    1. Curious though, if you chose to be financially independent, isn’t it weird to be dependent on your husbands parents for money?

      I don’t get it. Isn’t asking your in-laws for money as an adult the exact opposite of being financially independent?

      I think your comment will make a great blog post!

      1. Ok I admit, our situation is a bit contradictorian. We have 4 rental units, but our own governments sees us as poor (because rent isnt seen as income). We can live off the rent of our properties, but we still get extra government support for people with low income (my husband got laid of 2 years ago). I m a stay at home mom for our three children with special needs. So we had 3 rental units and we really wanted the fourth one, because this fourth income would make our family income more comfortable. Before, we were also fine, but with 3 children its better to have a bit of a safetynet. So we bought the very best rental we could afford at the time, and we came short a few 10000€. We dont have unlimited money at our disposal, we just have the four rentals and a safetynet for if things break or if renters dont pay. Our children are the only grzndchildren there will ever be on both sides of the family, so I guess the grandparents were happy they could help us out for the time being.
        I think they see what we are doing is building something for the next generation also.
        The money they lent us was just sitting on their bank account earning nothing at all. I dont think I depend on them…I m just grateful for their temporary help (we are paying them back like mad). If they hadn t helped us out, we would probably still be looking for a forth rental, as for now, the rental is bought and it already helps pay them back.

        1. LOL This reader is very funny. Willingly calls herself “financially independent” but is dependent on the government for income and her husband’s parents for investments? In addition to being hypocritical, seems like there is a bit of self-soothing. If you are proud enough to claim you are financially independent, be self-reliant enough not to milk the government for money you claim you don’t need.

        2. Politely asked to borrow and they said yes.
          Knowing that you are dependent on government support, you’ve put them in a place where they probably feel like they can’t say no.
          Not a cool place to put your parents in. They have their retirement and long term care needs to think of as well. You’re putting them in jeopardy.

      2. Sam – seriously? This is the epitome of thinking small. Would you be embarrassed to have your in-laws as seed investors in your start-up if you were the next Elon Musk or Mark Zuckerberg?

        Are you raising debt or equity? I thought you were a financial expert, man!

        The world of private finance is vast.

        1. T, accepting investment dollars so that your investors can make a potential return and borrowing money to buy something aren’t the same thing.

          I can refer you to some basic lending and investing articles to help you understand the difference if you are interested. Or you can Google the topic + Financial Samurai.

          Thanks and best of luck if you’re in need of money, hence why you landed on this article.

  8. I especially like rule number one and grudgingly admit it is one to follow. Not that I’m swimming in it or engage in any kind of conspicuous consumption. We moved back into the community that I grew up in, in the same house I grew up in and drive Toyotas.

    this is the hard part. All the old friends and neighbors know you retired early. They know you take a couple trips a year and don’t seem to have any money problems. On the other hand, many are still working into their 60s because they didn’t quite save enough, had previous money problems or for whatever reason.

    Even if you try to blend in and not be conspicuous they know. Some people make it their business to know. I’ve always wondered how people can find time to mind somebody else’s business so actively. I just don’t know if there’s a way to escape the envy and jealousy 100%. Judging from the other posts, it even comes from family members. So disappointing.

  9. I’ve done the exact opposite. I directly ask trustworthy friends who are having difficulty with finances if they’d like to borrow money from me. One said no and the other said yes. The one who said yes lost her job and was really worried about making rent, etc. We decided on a monthly payment plan for a 2-year loan at 1% interest. It’s been a year and she hasn’t missed a payment yet.

    For friends, I’m fine with loaning money as long as I know and trust the person and get everything in writing. For immediate family members, I’d gift them the money. My attitude is that’s what family and friends are for — to help each other out. I do agree, though, that you shouldn’t loan money if it’s funds you can’t afford to lose.

    1. That’s good of you to proactively ask, especially if you have friends who are obviously not in the best place financially. I do wonder though, whether this is a function of wealth, your circle of friends, age etc.

      I remember needing to help people when I was younger but now that I’m in my 40s and my friends are also much older, they are all so much wealthier.

      1. It’s interesting that all your friends have enough money and have gotten wealthier. I’m around the same age as you and my friends really vary when it comes to finances. Out of 16 friends in the Bay Area, 5 are wealthy, 4 are OK, and 7 struggle financially (one is on Section 8). I am wealthy so I like to help out good friends and at the very least, give them a little peace of mind even when they turn me down.

        1. What would you say are the reasons why your seven friends are struggling? Are there any lessons to be learned there? Also, I’m impressed you have so many friends! I definitely do not have that many.

          1. I define a friend as someone who I feel close to and see or call at least 3-4 times a year. So I guess 16 is a lot! As for reasons my seven friends are struggling, here they are:
            1. Elementary school teacher (nuff said)
            2. Music teacher (low pay)
            3. Legal secretary (due to tech, much less need nowadays; low pay)
            4. Mental disability; on gov’t assistance
            5. Refuses to work; lives with mother
            6. Terrible with money; on Section 8
            7. No marketable skills; difficult personality and super shy

            Not sure if there are any lessons to be had here. I would never loan money to #6 or 7 but would help the others and have.

            1. I grew up in bay area. What I see from Facebook is that a lot of people should have left long ago, but they refused to give up on that great area even if they really could not afford it or didn’t have a trust. Very sad to see people in their 50’s with decent careers living in their cars between rentals because they refuse to see anywhere but California as liveable.

  10. Money definitely tears families apart. My uncle on my mom’s side was a well known Econ professor in Korea. After the economic crisis of the 2000s, he ran into a sure fire investment opportunity. He borrowed heavily from all family members, my mother included. Investment flopped and he had been a pariah since. I visited Korea for the first time in 30 years and I didn’t get to see him because of him no longer being welcome to family functions and his own sense of guilt. That money wasn’t something any one of my family members could afford, but it was an attempt to help family. I saw my mom age significantly, lose sleep and require multiple blood pressure meds because of that time. Moral of the story is don’t be that guy who pressures his family and friends to loan him money.

  11. I think this one depends on culture/country as well. I borrowed near full amount for a house for my parents(just had enough for closing). I had just started working and paid off the loan in 2 years.

    I lent $200k to a friend for her business as she needed for short term cashflow.
    Well business kept suffering and she was unable to pay it back on time. Eventually I got back 70% before her business shut completely. I had no expectation on when I’ll get my remaining money back. It took 2 years but I got it back finally. It was stressful, I knew she wanted to pay so I had to be extremely patient.

      1. India – very common to support parents as they spend on us and and paid for expensive US college. As I see it, its the 3rd generation now after Independence and nuclear families are starting to be the norm. After partition and Independence in 1947, grandparents and later parents and their siblings all stayed close to each other. It just amazes me that the entire community took whatever little they had in 1949 and started colleges to educate their kids rather than think of FIRE or their own retirement. I was lucky to get a loan from extended family to buy a home for my parents. They chose to continue living a modest life and rent the house for their living expenses.

        I paid $30K for grad school in US. My bachelors degree cost me $100/year(Rs 4000 at that time).

        Yes, the loan was hard. It could have been invested in housing or in market. But it helped someone close, it could have saved a company and its employees. I also learnt a lot about my relationship with money. I found it difficult to ask for it – and that pattern was also there in my job where I expected the boss to give raise and promotion when I had rightfully earned it. I feel a lot of people helped me financially when I needed it and I’m glad I had a chance to support someone.

        Will I do it again for this big an amount? No!

  12. TheEngineer

    If you have the mentality of “Ask To Borrow Money From A Friend Or Family Member” you will never cross the FI mile marker.

    It is a more financially secure and fulfill life if you have the mentality “Should You Let Family or Friends Borrow Money”.

  13. 100% agreed on not mixing money with friends or family members. However like everything in life, there are some exceptions.

    For example, my parents are extremely risk averse. They would rather have their money in a savings account earning 1.5% per year than to have it sit in the market. And honestly – it used to bother me because I knew they could’ve been investing it better and increasing their wealth, but at the end of the day it’s not my money. I didn’t earn it. It’s 100% theirs. They also have a different risk tolerance. So I made peace with it.

    Then I thought of an idea when it came time to buy a house.

    I asked them if I could “borrow” money for a downpayment and that I would in return pay them back at the market’s 30-year mortgage rate, minus 0.5%. That way, I’ll “save” some money by paying less interest to the banks and they’ll earn a lot more interest compared to keeping it in a savings account, etc.

    I thought this was a win-win situation because if they needed the money due to unforeseen circumstances, I could immediately give back the borrowed amount because I already had that downpayment saved up.

      1. Ten years was the agreed time frame. Interest payment once per year (nothing complex, just ~3% of the borrowed amount each year).

        They’ve been happy. I’ve been happy. They’re none-the-wiser, but in a good way :)

  14. Lending money to family and friends is a terrible idea.
    In most cases you will lose both, the money and the friends.
    I lent about 10k interest free to my nephew 12 years ago. Never saw a dime, not only that but he totally avoids me and haven’t seen him in three years. He works and makes good money and is very thrifty but it’s just hard to pay the money back.
    Then I lent about 160k interest free to my sister to buy a house as she could not get a mortgage. She was supposed to get a mortgage within 3 years and pay me back. 9 years later she paid only 40k. Now she never comes to see me or talk to me for the last two years. She makes good money with her husband as they take a lot of vacations but it looks like It is hard to pay the money back.
    I didn’t do any loan paperwork with them, just wrote a check and gentleman’s agreement, that is the only evidence I have and they know me, I am not the type that would take my family members to court so I guess I will never see my money back at this point. The worst thing is that I loved them so much and now I never see them either and my heart has gone cold. So I realize at this juncture, I lost both, money and family.

    1. My heart just broke for you my man.

      It’s absolutely crazy how you had the generosity to cut them an extremely generous check, interest free, but they choose to sour a relationship that could’ve been so much more.

      I don’t blame you that your heart turned cold.

    2. Man, sorry to hear for your loss. And I am angry that your sister and your nephew did not have the honor to pay back the interest free loans.

      If you want those relationships back, perhaps it’s best to just tell them hey, you don’t have to pay me back anymore. But I would like to continue to have a relationship that we once had.

      1. I would certainly have forgiven them the money if they had asked for it, what makes me sad is that they didnt pay it back because they figured they could just get away with it, screw the family relationship.
        I am in no need of that money or such family relationships for that matter but their behavior made me change my trust, lots more money is going to my favorite charities now, and that is in seven figures.

  15. Excellent article Sam; I totally agree with you and covered this in an article I did on “money mistakes.” I loved the personal touch/ anecdote about the gambler – I didn’t figure you for someone who would risk any money in a casino but with your stock windfall why not have a little fun? I beat myself up to much about losses to truly enjoy the wins…

      1. Short term? It is pure gamble.

        Long term with great players in the table? Still pure gamble.

        Long term with fishy players? It is FOR SURE not gamble.

        In the tables it is better to imitate Trump`s Strategy.

  16. The money topic is always interesting when it comes to lending to friends or family. I have a slightly different story and I suppose a different opinion…

    In this event I “lent” money to a tenant who was neither a friend nor family. The guy was younger, I believe around 23 years old, and had moved from somewhere south up to the DC area. He was under a manager training program contract with his work, and I believe was miss-informed of the potential compensation. When I had checked him out in the application period he seemed fine enough, and the rent required wasn’t all that much. He was going to be paying around $950/month for one bedroom in a shared unit. He had his first months rent and a security deposit so things were good to start. The unit was a 2 bedroom, in which he was splitting with an existing tenant that was paying 2/3’s of the total rent as she had a much larger space.

    Anyway it started out well, and the money was coming in as usual for the first 3 months. Then on Month 4, I received only 1 check from the female tenant. So i sent an email to them to see what had happened, and he said he would get it to me. He just didn’t get paid that day and the check to his account was delayed. I said okay, just get it by mid next week, assuming it would take a couple days for the bank transfer to workout. A couple days came and went, and still no money.

    I reached out again, and he said he was going to send the money next week, he had got into a car accident and needed to sort that out. I realized this wasn’t my problem, but I felt bad for the guy, and said okay… just get me the money next week. That week came and went as well… still no money.

    We then approached the next month and again I received a check from the female – only. So now we are down $950 x 2. $1900 isn’t exactly life changing but it’s not small change either.

    So I reached out to him again, and said… i have reached the money from last month and this month is due as well. You are down $1,900 what is happening. He responded that he was going to be getting a promotion as he was finishing his program but it hadn’t hit yet. As soon as it did he would pay the money. The reason he hadn’t settled up yet was because his 3 year old son was sick and needed treatment and also a new bed. I didn’t know he had a son. It wasn’t my business I suppose.

    So, I said okay… I need you to start making payments on this or we are going to have to start the eviction process. I don’t want to kick you out, but I can’t take another $950 hit.

    Would you believe it… we missed another check. now down $950 x 3. This was the last straw, and should have been earlier but I was being nice I suppose.

    I had a discussion with the guy, and discovered the issue. Not only did he have child support due in addition to another sick kid, a totaled car.. he was also fired from his job for lack of performance. So much for the promotion.

    I decided to sit down with him and try and impart some wisdom. I told him that he would be evicted, which he knew and he was okay with. He said he was sorry but thought that it was going to work out and he wanted to get on a payment plan to pay me back. He said I did him a huge favor letting him live in the place, and he never wanted to not make the payments, but he was under so much stress with his kids in a different location, and the car, and the job. It was all really just too much for him at 23.

    I said, well look. You are already into some serious issues and I don’t want to make life worse for you with legal action but we need to sort this out. So we came up with a payment plan, and I generously said I will give you 15 months to make all of the payments.

    To this day I have no idea why I landed on 15 months, but it’s what I said. So, we drafted a note and both signed it that he would pay back $2,850 within 15 months.

    I was shocked that on month 1 he sent $500. I was now down $2,350. on Month 2 he sent $300. I was now down $2050. On month 3, can you guess what he sent? If you think $100, you are wrong. He sent $500. Things were looking good… I was now down $1550.

    With the last payment he said he had moved to a new place, sold his car and had a new job. He was back near his kids and figured out how to make life work.

    on month 4… nothing was sent. on month 5-7 nothing again. On month 8… I was losing hope, and he sent $50. I was now down $1500.

    That was the last $50, I received and the last contact from him. month 9-15 zero funds were received. I initially reached out two more times telling him to honor the agreement, but I eventually lost taste for it.

    I came to the conclusion that $1500 to him was probably a lot more than it was to me. I also knew that it would cost a whole deal more to even try and recover the funds and even with a favorable verdict payment wasn’t guaranteed. So, I decided to just let it go. I sent him one last email and said: based on the lack of correspondence I understand you have decided to not honor your word. I understand this and can accept it. I do want you to know that this is probably the only situation in life where you will get away with this. I want you to think long and hard going forward before you make a commitment and always have a strategy for how you plan to completely execute the agreement. Its how you finish the contract not how you start it. Good luck in life, take care of your boys and teach them better.

    When I think back on it, I see a couple of lessons to learn. 1. Enforce the contract sooner and don’t wait. 2. evaluate the the candidate better and require a higher premium for renting. At the time I only charged a half month security deposit. and 3. I started to think about what it must have felt like to that person. He had his world crumbling around him and here was this person hounding him for funds. While, yes I agree it is part of life and he should have honored the commitment. I also see the other side. Imagine if your life went to total hell in a day. Your kid had issues, your car broke down and you were fired. Now imagine someone coming to kick in your door to take your belongs and shake your core because of a few thousand.

    Life is more important than money. Sure it takes money to get along, but it isn’t everything. Looking back at the situation, I almost wish I told him on month two to just finish out the month and then leave. The money wouldn’t be due. Go get your life straight and consider this your last free ride towards manhood.

    With all of that said, I have a similar thought to the rest of you. To my family, I would lend whatever they needed. They are my support crew and if you can’t be there for your family who can you be there for. When it comes to my close/best friends, I would lend them what they need. Mostly because they don’t need it anyway. However, if they did.. and it was a life and death situation how could I cast them out? Like one of the other replies said, maybe someday I would be the one needing money.

    You can’t take it with you, and so long as you have a enough for your self and your family. There is nothing wrong with sharing with others to help them on their way.

    Sure if they abuse the issue, maybe I would change my tune, but so long as it is a genuine need and not just a cash grab, why not help the ones you love. Hell, I gave $1,500 to a stranger…

    1. This is an incredible comment. And man, I was hoping for you to say he sent the $1,500 out of the blue some years later. Guess there’s still a chance.

      I’d love to post your comment in a stand alone post. Good lessons here!

    2. I see a few comments from people saying it should be ok to ask for a loan from parents or family members if you have a “good” investment you want to pursue. Problem is, not many of us are likely to know whether the investment is good or not. Even a “good” company doing all the right things can go belly up if the environment they operate in changes for the worse, and then your investment is gone. Or rather, your parents investment is. When I graduated from grad school I wanted to open my own clinic. Thought I’d have to work a bunch of years putting away capital before taking the plunge but six months out of school I was approached to be a partner in a new clinic by a group of people who wanted to open a clinic in a difficult to recruit to area. I didn’t have the cash so my dad offered to put up the money. Knowing the high failure rate of new businesses and the negative consequences a total loss would have on my parents plans for retirement I said “Thanks dad, I love you for it but I don’t want the stress of knowing a failure in my business really hurts you and mom.” I found another way to fund my portion and I know my dad was really proud of my independence and resourcefulness. Before you ask for money from your parents/family/friends, ask yourself what the loss of that money would do to them. For the sake of your relationship and mental health, find another option.

  17. I am also wondering if anyone has ran into this situation…
    1.My spouses parents need money but any time we give them gifts they give it to a brother who takes advantage of them. I guess technically we are giving them a gift and they can spend it the way they want. But we wouldn’t give money to my spouses brother who has options.
    I hate to be judgmental. But when you see people receive gifts to fix a situation they complain about constantly…and they squander the funds…frankly we have stopped listening and don’t plan on bailing them out of deep debt ever. Except for smaller gifts of a few hundred dollars, they are on their own.

    2. My spouses grandmother died and left an even gift to grandchild and great grandchild of 20k each. The money for the great grandchildren was supposed to go to education. Some of the families-particularly my spouses oldest sibling who had a chance to have four kids and the irresponsible siblings who was only a year older than my spouse but had parties and had four kids- got gifts of 100k. My spouse who had just graduated from college and hadn’t started breeding willy nilly- got the 20k for himself only.

    Not one penny of that 20k went to the sons and daughters of my spouses siblings educations. The parents who were supposed to hold on to 20k for each kid it spent it on vacations saying “vacation is education”.
    I must say this situation made us say we aren’t helping. If they ask, the answer is no. We found it immesenly unfair and now just say to ourselves…they got their financial support.

  18. I’ve seen this played out many times and it never ends well. I’ve noticed a trend… family member gets a good job, gossip spreads about how much they are making and suddenly there is this sense of entitlement-counting other peoples money. Almost like if the borrower had not heard, they wouldn’t have asked, but hey since so and so is making a King’s ransom now he can give me some.
    You’ll never get the money back because the borrowers don’t feel you need it. And if they’re borrowing because they messed up their own finances, they won’t get it together to ever pay you back. It doesn’t work out either way.

    Samurai is right- keep your earnings on the down low. Think that might be hard if you work for a company like google or Aramco and the news is constantly telling the world how much you make.
    I set a certain amount of money aside to give as gifts per year and if they’re smart they’ll save it. If not, I can’t rescue them from their financial situation no matter what I give. It’s a black hole.

    1. I deal with this situation too. Both my parents and my sisters’ family are spending “black holes” as you so aptly put it. The thing that has occurred to me over time is that they think we are rolling in it, so they don’t mind asking and don’t feel the need to pay back. But the main reason we have stopped helping is that no amount of money would ever satisfy them. Some people just spend as much as they have, whether that is $10K or $1M, they will make it disappear.

      My wife and I decided once and for all, our family’s planning and saving was being used so these families could have things we had sacrificed to go without. Some people are greedy, spend too much and do not care about your problems or how you accumulated wealth to begin with. It is a shame, but like an addict, no one can solve it except the spenders!

      It is just more painful when it is family and even parents doing it to you…

      1. One of the strategies I’ve deployed to help a family member out is to simply support her work. I will promote her things and buy her work. This is a good way to help b/c it’s real work and I really like her stuff. She does something meaningful and gets paid.

      2. I figured at one point that three million dollars in inheritances and salaries had flowed through one arm of my family in a decade. They spent it on cars and clothes mostly. When the trust got low they panicked a bit and two small downpayments were made on modest homes by two of the beneficiaries they occupied but are still paying on to this day.
        One very sad thing I saw was that two of these beneficiaries had a pre paid college program (bought at my insistence). They cashed it out and didn’t finish school. The trust sucked out their will to do anything. One did have a good job but he imploded at 30 and quit, never doing anything again because he had this cushion (and a rich husband)
        Yes – truly, a black hole that no amount of money will fill. They could have been set for life…all three of them. One lives off his husband and the other lives off his 70 year old mother who still works because of their combined incomoetence. And it’s not just the money-the bitterness, the lack of education and the fact they didn’t find their footing in life because of a influx of cash-it ruined them. I see the same thing being repeated with kids if rich folks in my town. In some ways I think you need to keep your finances even from your kids or they start counting your money too!

        I know from experience it is a black hole that no amount of money-millions-can fix. I give them the same monetary gifts each year. Put some small amount of money in a utma account for my niece – enough to help her in road to financial success but not enough to ruin her. My thought is I tell her she can keep investing and be a millionaire or pull it out and it will be gone quickly. Her financial future is up to her.

  19. I guess there is somewhat of a distinction for asking your parents for a gift, e.g., the gift of a downpayment as an advance on your inheritance? Versus asking them for a loan?

    1. But doesn’t the idea of an “advance on your inheritance” reek of entitlement? I plan to pass assets to my children, and very likely earlier in their adulthood when it can have a greater impact, but I promise that the more they ask, the less they’ll get! I agree wholeheartedly with Sam that I would be deeply disappointed in myself and my wife if our children ever ask us for money post-college.

  20. My 50 year old banker brother and his wife borrowed $30,000 from my father when he was 87 and did not have the mental capacity to handle his money or make that type of decision. After the fact my brother told the rest of us about and said it would be a very short term loan for the business they had started. The business didn’t do well so my brother said he would even up with me and my siblings whenever our father died and we sold his farm. My dad just about ran out of cash while he was in a very expensive nursing home. He passed just a few months ago so we will see if my brother keeps his word when we sell the farm this spring. This has all taken place over about five years. My brother and his wife have been on several very nice vacations. The whole thing has divided our family and we’ve had a lot of arguments over it. Once the estate is settled I hope to never see my brother again.
    I definitely agree. Don’t borrow money from family or friends.

    1. This is all too common! My sister in law has a brother that married a woman with four kids who had lived near poverty. All the sudden after she got married she felt entitled to everything her husband and his parents have. “Your dad’s a doctor, get us a pool.” It’s amazing to me how people will stop living within their means if there is any pile of money they can “borrow” freely from.
      I am betting your brother won’t pay up and there will be nothing-no loan paperwork-for the estate to collect on. As a banker he knows that!

      Let us know what happens.

  21. Dr. Remoulak

    Fun article Sam. One other thought for the readers…if you loan money to a friend, assume you won’t be getting it back. I got contacted out of blue from a close college female friend who I had lost contact with for 10+ years. After several rounds of calls to reconnect, she confided that she was going through a divorce, in dire financial straits and needed $10,000. Sent her half initially with the agreement she’d pay back a mere $100/month until I was reimbursed – she even pressed to pay me interest but I refused. She drafted a simple note memorializing the agreement. That was 2+ years ago. Received $100 for the first 3 months and then she disappeared. No hard feelings (consider it a non-deductible charitable donation), and I guess I got off easy because had she pressed for more I probably would have given it to hear. Shakespeare said it best – “Neither a borrow or lender be”…

    1. I think they call it “spangeing”-asking for spare change on line. I’m leery of go fund me for a lot of things anymore. Seeing too many 20 somethings with cancer etc. Saw a go fund me notice taped to the atm of a local bank asking for 4K to help a trans family get a car, housing, pay bills for holiday. Followed it a while and did some sleuthing and the man asking for funds for this family got breast surgery-as in the day the go fund me hit its goal, the guy announced in his Facebook that he had put down payment on his plastic surgery. Seemed suspect.
      I’m sorry to say but I imagine your friend asked quite a few people for money on line with gas lighting and reigniting old connection. You are, unfortunately, not the first person I’ve seen fleeced this way. It doesn’t take a Nigerian overseas live scam anymore. The scams come from unexpected places. :(

  22. Financial Freedom Countdown

    People who know me well enough never ask to borrow money.

    And people I know well enough to lend money; are the ones I usually give them what is needed as a gift with no expectations of needing to pay me back

  23. re: A different downside of asking family for money.

    Please forgive me if this gets a little long …

    After the hubby and I were first married, we purchased a starter home out in the boondocks. But hubby always wanted to move back to the area where we both had grown up. After nine years of boondock living and experiencing a grueling freeway work commute at times, we had the opportunity to buy our forever home in our desired area that was nearly equi-distant between both our jobs. The only hitch was our starter home was not yet sold as the time was fast approaching to close escrow on our forever home.

    My oldest brother came to our rescue. I later heard there was some debate between him and our Dad regarding who would have the privilege (honor?) of providing the needed funds, but my brother came out ahead (?). The loan would be paid back once we sold our starter home. My brother was livid when the mortgage company insisted that he and his wife be included as partial owners on the property title.

    Shortly after moving into our forever home, but before selling our starter home, there was a large earthquake in the local area that caused quite a quite a bit of damage to my brother’s house. I asked him if he needed us to pay back the money we owed him sooner rather than later; thankfully for us at the time, he said no. Our starter home eventually sold, we paid back the money owed to my brother, and he and his wife quit claimed the property title back to just the hubby and me. Certainly a happy ending, right?

    Not so fast. The price we paid for this loan from MY supportive family was unending jealousy from HUBBY’S envious family! EVERY time we did something to improve our lot in life, rather than “congratulations, good for you!” we would unfailingly hear the snarky “Of course you’re doing well, you got help from HER family”. Every time we were in a better financial position than someone in hubby’s family, we would hear, “Well … you got help from HER family!” It didn’t matter how hard we worked. It was always, “Well … you got help from HER family.” Never mind the fact that we PAID HER FAMILY BACK as soon as we got the money from selling our starter home. If I had a dime for every time we heard, “Well … you got help from HER family” I probably could have retired at age 40 rather than at age 55.

    How ironic that a loan from MY family was the source of such animosity from HUBBY’S family; and they NEVER got over it! Hmmm … maybe it was just ME that my in-laws didn’t like, and getting a loan or not from my family wouldn’t have made any difference in my relationship with them whatsoever ….

    1. Minnie's Money

      I have a story that is almost verbatim identical. My parents helped out my husband and I during our first home purchase. My husband’s family changed their tune from worrying about us asking for their charity to being jealous that we didn’t need their help.

      I am a huge advocate for openly and tactfully discussing finances with family and friends but now I know how important it is to assess the others’ appetite for the topic first, and it is OK to withhold info to preserve relationship!

    2. I think this is definitely a situation were it makes sense. I consider my immediate family all one unit. If there is a plan in place that needs some short term cash with a surefire way to replace it and it will save the family money in the long run, I am all for it. The better of my family is the less I have to worry about them in the future.

  24. This is great: “ask for a job you can do for them”. An excellent way to ask or offer help!

    My wife and I have ‘banked’ with our parents a couple times. Once for a mobile home purchase (3yr note) and once for a business loan (5yr? note). Both got paid off in full at good interest rates. I’ve thought about doing the same with what’s left on our mortgage as they often get less the 4% on CDs and money markets but it just didn’t seem worth it.

    Let money to a co-worker once to help them out of a bind – what a waste. Should have used the “will hire you for some work” approach instead.

  25. Lending money is a bad idea. It’s better to just gift it, IMO. For example, I’m sending money to my parents to help out with their cost of living and healthcare expenses. I don’t expect anything back.

    On the borrowing side, it’s a bad idea to get into that position.
    Fortunately, I’ve never been in either position. My friends are doing fine so they don’t have to ask me for money.

  26. I’ve been asked a couple of times and surprisingly by people I am NOT that close to. I kind of waved them off but they got the point. And I agree, there is a high risk you will not get the money back as I know friends who have fallen victim to that. I just hope I never find myself on the asking end.

    1. Nobody loves you when you’re down and out. If you’ve got money, everyone is your best friend. Even if you don’t really know them at all.

  27. I’m not agreed on this one. The spectrum is just too broad to make such a generalization. It depends on the situation you are in.

    Let me tell you my side of the story. To start things off I’m not a US citizen and thus not living in US. We will leave this anonymously, cause it doesn’t matter that much what is my place of occupation.

    2014 came and suddenly the economy starting collapsing because of sanctions. National currency loses it’s purchasing power. Prices preparing to strike high. People starting to exchange money for something more substantial rather than an agreement on a paper between government and society.

    We decided to buy a house. But we’re short on money to make a full payment. If we were going to wait, the price will go up and we may be left with money that can do a tiny fraction of that it can do today (btw, it doesn’t happen, but prices went up substantially)

    Thus, it was ok to ask family members for money. Together, we make it happen.

    A similar thing happens to my wife’s parents. They were building a house. Asked for a large chunk of money. I was hesitant at first, but my “loan” allowed them to finish construction sooner. They got a mortgage, which means time is money for them.

    Another case happened to my own family. We were able to catch a deal that was almost $12000 better than anything else on a real estate market at a moment. In order to make it happen, we needed money we don’t have. Waiting will result in missed opportunities to improve our housing situation and higher prices. So, we asked for help. And we got it.

    We got a mortgage. But because of a price difference, we actually have it for free for almost three years. Enough time to sell the previous house and repay the debt.

    For a final conclusion: It depends on your family relationships.

    p.s. if writing feels odd, that’s fine. I’m not a native speaker. Did my best.

    1. Alex, what if property prices went down after you borrowed and bought? How do you think your relationships would have turned out? We already know your finances would have been hurt.

      Luck is not a sustainable strategy.

    2. I am an immigrant and borrowing money is very common among my culture, but it definitely leads to problems. After learning the hard way I dont lend ANYONE money and people know not to ask.

  28. Great advice. Any kind of financial agreements between friends and family will strain the bonds. In an ideal world nobody would ever borrow a dime from anyone. But most do borrow for housing and education in today’s world. Having no debt feels very free, and being financially independent with no debt feels even more free. I’m surprised you gamble for entertainment. I know some other smart, successful people that do, and one of my friends actually makes money in retirement at the poker tables. I’m just not a fan of negative sum games, and not willing to memorize the volume of information required to estimate the odds of every hand. But he loves it and does very well.

  29. Although I agree that lending a friend money is usually a bad idea, I don’t think that asking parents for money automatically makes you a failure or makes you seem like a failure to them. I got my first real job at 22 outside of Philadelphia. I needed a car to get to and from work and didn’t have the cash or credit to get one myself. My parents bought me an $8k used Mazda and I paid them back monthly over 3 years. It seemed pretty normal at the time and now.
    On the other side, about 4-5 years into that job, I lent a coworker and “friend” in his early 30’s around $1000 in three installments. The last one he showed up at my apartment at 9pm on a Sunday asking for 50$ and left with 8$ in quarters. Turns out he had a drug problem and I had $1000 less than I otherwise would have. Haven’t talked money with or lent money to friends since.


    For people in a situation where they need money fast – What would be your suggestion on how to get it? like say $1k. I’ve seen other bloggers talking about this, but they always say the same things.

    1. Build an emergency fund and don’t hit up friends.
      You have to realize that people who are asking usually can’t be fixed with $1000 bucks anyway. It’s a black hole.
      The biggest difference between rich and poor isn’t usually luck, but the ability to plan ahead. If you aren’t the kind of person who anticipates needing a $1000 put aside in case of emergency, you’re always going to be robbing Peter to pay Paul. Advice to friends of people like this…don’t be Peter.

  31. I’m in permanent employment but I have friends who are entrepreneurs. Occasionally they need some cash and I lend. They pay back when due. This is what friends are for. You have to understand that life is ups and downs. Sometime in the future, it could be me needing a loan. I don’t see anything wrong.

    Also, I think it depends on what the money is for. If I came across a good investment opportunity and I didn’t have enough capital, I would probably go to my parents for a loan. Would this make them feel like they’re failures? I doubt that very much.

    I think the bigger issue is taking a loan from friends/family and failing to pay back. Remember a lot of successful businesses have started out from the Bank of family and friends. After all, if the people who know you best can’t lend you money, they why on earth would anyone else??

  32. I’ve made the mistake of lending money to friends as well. I would hope I have learned my lesson after several have not paid me back. It definitely changes the relationship even if they eventually pay you back. I am trying very hard to learn to say no period.

    1. Yes, I agree with you Marc. I have loaned money to friends, and it has not worked out well at all. One friend of mine took a very long time to pay me back, and other times, they tried to get away with not paying me back at all. However, I called them out on their crap and then I got the money back in full. All I know is if this particular person asks me for money, they are going to get a huge NO. Another friend asked to borrow money for their monthly car payment, and I happily gave them the money. However, they said that they would pay me back, but it is taking forever. I understand this particular friends situation that they are in. However, they kept asking for more money. This person is at the max of owing me over 600.00. I still have not seen this money as of yet. However, I feel like at the same time, even though they said they never take advantage of other people, I feel that this person does. All in all, I am coming away with the conclusion that lending money to friends and family is a very bad idea. I have come to also realize that I can only help others out to a certain extent. It is starting to get me aggravated that people try to make their problems other people’s problems. When they themselves do not see how they contributed to their problems to begin with. All in all, I will NOT lend money to anyone ever again. I sure as heck learned my lesson.

  33. This is a really tricky issue. I’ve always been the one lending the money rather than asking myself.

    I get the feeling that the UK gig economy isn’t as developed as the market in the US so there can be more hoops to jump through before one can start earning money.

    I think asking friends / family members for jobs which can be done is a novel way of tackling this issue – so good thinking. But I think the key issue which is alluded to in the post but missing the solution is ‘WHY’ is the money being requested in the first place. In the example given in the post ‘Vien’ may keep being relieved of money in the casino no matter how many loans and side hustles he takes on. The key issue is that the money is being requested to feed a gambling issue. If the borrower has underlying money issues then I think it’s really important to try and help that person tackle them at the time the money is being requested to avoid entering a vicious cycle of borrowing / side-hustling with unresolved money issues and having little to show for it at the end of the day.

    At the risk of evoking the saying “a fool and his money…” I think I’d rather give money to a friend or family member if I was sure they were a good credit and they were suffering short term cash issues (rather than see them resort to other sources of finance in the first instance – but of course this is driven by how quickly they need the money, the amount required and when they expect to pay it back).

    As always, interesting food for thought.


  34. I’ve been on the other side where a friend asked to borrow money from me and can tell you that it definitely does change the relationship.

    I did lend the money the first time and he paid me back but a few months later he came back and asked for another loan and a much more substantial amount. I ended up declining because that was an amount I felt uncomfortable lending (they say if you lend money to friends or family lend only the amount you are willing to lose completely).

    Fortunately no one else has ever asked me for a loan.

    1. I totally feel the same I don’t mind giving or lending if it’s amount that won’t hurt me if I don’t get it back.

    1. Lol…your good friends will come at 2AM to bail you out of jail.

      Your best friends will be sitting in there with you.

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