Loaning friends money

[SlowHabit]

I've had a couple of bad experiences but I still am not good at saying "no." We usually hang out as a group of friends and since I'm the only one that do well in poker, I'm usually the loaner. The reason it is hard for me to say no is because I see these guys on a daily basis and it would be awkard if they cry for help and I say "no," especially when credit cards are charging at 20%. However, I am not liking myself because that money could be used somewhere else and these guys aren't very good with money management. Another thing is I know for sure they won't run away from me but it could take a while to get it back.

Do any of you loan moneys to your friends [probably apply more to the college group]? If you don't, how do you say no? I usually give the advice "just say no" to others but am very bad at applying it for myself in this particular situation.

[Scorpion Man]

[ QUOTE ]
I've had a couple of bad experiences but I still am not good at saying "no." We usually hang out as a group of friends and since I'm the only one that do well in poker, I'm usually the loaner. The reason it is hard for me to say no is because I see these guys on a daily basis and it would be awkard if they cry for help and I say "no," especially when credit cards are charging at 20%. However, I am not liking myself because that money could be used somewhere else and these guys aren't very good with money management. Another thing is I know for sure they won't run away from me but it could take a while to get it back.

Do any of you loan moneys to your friends [probably apply more to the college group]? If you don't, how do you say no? I usually give the advice "just say no" to others but am very bad at applying it for myself in this particular situation.

[/ QUOTE ]

I have done a bunch of this. I have your problem on steroids because people know my business background. Generally, you should not loan money to friends and expect to get it back. Otherwise, it's not worth it.

My advice to you is simple, although you might find it difficult to implement. Just cite a "policy" you have arrived at after serious and long deliberation that you will not deal with friends any money together no matter what. Period. "You have seen it hur too many friendships and I value ours too much to screw it up". And when the guy says but we are extra special best friends, you just say its too much of a slippery slope, the only way I can stick to this is to make it a hard and fast policy. Then, if you want, GIVE them $100 or whatever and don't expect it back and no hard feelings. You can do that 20x and people feel good about it and its equivalent to getting screwed on $2k once while losing a friendship over it.

People are WAY strange about money. I could tell you many stories of the absurd ways that people wrap their heads around money once you lend it...for example, I have a very close friend who was strapped and selling a house...he had $200k equity in the house but was literally out of money in terms of paying bills until the sale closed. I lent him the $20k interest free and said just pay it back whenever you close, no worries.

It closes, then he tells me he told his wife we need to work out some sort of payment plan because he "doesn't want to use the $200k to pay off the loan - that's my house equity". ????????? Ultimately , his wife recognized he was out of his head and they paid me quickly. BUT...the key is that I did not get mad. I just said to myself, peopel are funny about money, I love this guy, his approach here is retarded, but I knew that going in, and I am not going to get upset. I just said, "fine, do whatever you think is right".

That said, I would not have made that loan if that amount of money had any materiality to me. Because then you just cant help but be pissed unless you are a saint or they are in serious trouble.

One other possibility that is more idiosyncratic to your situation is a BAD COP. Bad cops are awesome, i.e. a wife or parent that will cut you off if you ever loan money. Bad cop is the easiest way to say no if you can figure out a good story.

[Shadowrun]

Does anyone ever lie and say something my money is all tied up right now (in whatever X stock or whatever)?

[polkaface]

I agree with Scorpion.

If I "loan" money to a friend, I don't honestly expect to be repaid (if you expect and count on that money being repaid, it will cause a strain on the friendship), and if I do get repaid it is a bonus. I more or less have the 1 time loss rule. If I can afford it, I will give the loan, but never a 2nd loan if the first is never repaid. You have that history to cite and explain why you won't give him the loan the 2nd time.

[j_gomberski]

ive done it with mixed results, however ive never loaned more than about $100 to any one person at a time. Ive had only one person not pay back a big loan and that was for $100, but ive also loaned out in the past month over $150 to a friend and been paid back for that so i usually have no problem with giving money out. I, however, do not really care one way or another if i get paid back on most my loans because it is usually helping a friend out or giving him money to have a good time and usually im there with him.

[hanster]

Interesting thread. I'm in college so we're probably in the same shoes. I have a handful of friends that I trust and most of the time just lent them monies without asking them for what purposes. I agree with SM in that once I lent it out I should not expect it back, just think of it as money loss. (It kind of is if you think about it; you could be earning interest somewhere else instead of charging 0% for your friends). However, other friends I would just say no and most of the time people should understand no means no. Does this seem a bit of a azz-move? I don't think so.

The amount also matters greatly, in my opinion. I, a college student that doesn't make much monies, $500 is probably the top amount I'd lend to the people I trust (~1 month rent). (I lend my friend $400 once so he could buy a new phone). Meh, for other people 20 is probably tops. I would rather donate it to some kind of charity.

[ QUOTE ]
I usually give the advice "just say no" to others but am very bad at applying it for myself in this particular situation.

[/ QUOTE ]

I just ask them how urgently they need it, i guess. I will say most of my monies is in ING account and requires 3-day processing (which is true I don't like lying to my friends) and most of the time they'd just say oh don't worry about it i'll find another person. I actually haven't encountered a serious money request so I don't know if I've answered your questions well.

[Spellmen]

I don't mind loaning out a few bucks here and there, but I really wouldn't loan out more than $100. I used to loan a friend $100 for poker pretty regularly, but that's mainly because he couldn't get money online himself, and he almost always paid it back within a week or so. I've seen it lead to some pretty ugly situations, so I mainly keep it to hooking someone up with a 20 if they are strapped for cash when we're out

[WillMagic]

don't do it.

either gift it or don't give at all. loans to friends ruin friendships and don't get paid back.

[SlowHabit]

[ QUOTE ]
Does anyone ever lie and say something my money is all tied up right now (in whatever X stock or whatever)?

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I don't lie because I do have money tied up in the market. However, it's hard to say no and say I'm all tied up when they know I'm multi-tabling online games.

FWIW, fear of friends and relatives borrowing from me is the number 1 reason why I like to be hush hush about my financial situation. Unfortunately, I play online poker and they know my screenname because I tried teaching them how to play and they can just log on and see how am I doing.

[Boris]

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