5 Reasons You Should Not Loan Friends Money

Would you lend a friend $5,000?  How about $3,000? Frankly, I don’t think it’s wise to lend family or friends money. I’ve done it twice in the pass and I was repaid, but it wasn’t thousands of dollars like this request. I once helped a friend out of a bad marriage and another time to help a friend get back on her feet after she put her mother in a nursing home.  The second friend tried to make it a habit, I ended that.     

Why am I leery this time? Could it be because it’s a male or the size of the request? To be honest, I have a hard time with a man asking me for money. Especially large sums of money. So maybe it’s both. When he asked me to lend him the money, I really wanted to ask if he saw a sign that stated The Bank of Rhonda in my front yard. What irritates me is this person lives in a 4,000 square foot house, drives a luxury vehicle but is unable to pay their bills. Did I mention they took a vacation overseas? 


Do you know the quote: “I don’t loan money because it causes amnesia.”  – Unknown  Yes, I love it and here’s a few other reasons why I don’t believe it’s a good idea to loan family or friends money:



1.  It’s rare that family or friends will repay the money –  Friends and relatives believe that they really don’t have to pay you back because of the friendship or the fact that you’re family.  


2.  Help people don’t enable them – Offer to help the person with their finances rather than loaning them money. It may be want they want, but it could be what they need.  


3.  Loaning money can jeopardize your relationship – Many friendships/relationships end because money is not repaid. Assess whether your relationship is more important than the money.  


4.  If the priorities are wrong, it won’t be a priority to repay you –  If a person is not paying bills timely or being financially responsibility, you won’t be a priority either. 


5. Your finances could be harmed –  If the money you loan is not paid back, it could potentially harm you financially. You could use that money for emergencies or to have a saving for future hardships. 


Most people can’t afford to loose money, so assess your relationship and decide whether money is worth ending your relationship over. Nearly 57% percent of friendships or relationships end because money is not repaid.