"Lend It Like You Lost It: Why Expecting Repayment from Friends and Family is a Fool’s Errand"
"Because nothing strains a relationship quite like a $50 IOU that mysteriously vanishes."
The Eternal Dilemma: To Lend or Not to Lend?
At some point in life, you’ll hear those fateful words from a friend or family member: “Hey, can I borrow some money?” Maybe it’s a sibling with a hard-luck story, a cousin with a “surefire” business idea, or a friend just short on rent. And because you have a heart (and possibly a decent credit score), you say yes.
But here’s the kicker, should you actually expect to see that money again? If you want to maintain peace and harmony, the answer might be a firm no.
The Unwritten Rule of Lending to Loved Ones
There’s an old saying: “Never lend money you can’t afford to lose.” That’s never been truer than when dealing with friends and family. Loaning money in personal relationships isn’t just a financial transaction, it’s an emotional investment. If you go into it expecting repayment, you might be setting yourself up for disappointment, resentment, or an awkward Thanksgiving dinner.
It’s not that people necessarily intend to stiff you. Life happens. Bills pile up. That surprise car repair eats up their budget. And let’s be real, repaying a friend isn’t as urgent as, say, keeping the lights on. The reality is, when money exchanges hands within personal relationships, it often disappears into a black hole of forgotten promises and unexpected expenses.
Why It’s Best to Treat Loans Like Gifts
If you shift your mindset and think of money lent to friends and family as a gift rather than a loan, life gets a whole lot simpler. Here’s why:
Eliminates Tension: If you expect repayment and don’t get it, you’ll inevitably feel resentment. If you don’t expect it, you’ll feel like a generous soul rather than a creditor chasing down an overdue balance.
Maintains Relationships: Nothing sours a friendship faster than money disputes. By treating a loan as a gift, you sidestep potential conflicts and avoid awkward encounters where you’re wondering, Should I bring up the money? (Spoiler: You probably shouldn’t.)
Reduces Stress: There’s nothing worse than feeling like a collections agent, subtly (or not-so-subtly) reminding your loved one of their outstanding debt. Removing the expectation of repayment takes that stress off your plate.
Encourages Smarter Lending Decisions: If you tell yourself the money is a gift, you’re more likely to lend an amount you can afford to part with, rather than overextending yourself on a shaky promise.
But What If You Really Need It Back?
f you’re in a situation where you truly can’t afford to part with the money, lending might not be the best idea in the first place. Instead, consider these options:
Offer a smaller amount: If they ask for $500 and you can only comfortably part with $100, offer that instead.
Set clear terms upfront: If you must lend, put everything in writing, even if it’s informal. A quick text or email stating the amount, repayment date, and any conditions can serve as a reminder without feeling like a legal contract.
Say no (nicely): It’s okay to decline if lending would put you in financial distress. A simple “I wish I could, but I’m not in a position to lend right now” goes a long way.
The Exception: Business and Large Loans
While treating money as a gift works well for smaller amounts, larger sums, like co-signing a loan or funding a business venture, require a different approach. In these cases:
Get it in writing: A formal agreement protects both parties.
Discuss expectations clearly: Will you be a silent investor? Do you expect interest? Will there be a repayment schedule?
Be prepared for the relationship to change: Money alters dynamics, and larger sums can lead to serious disputes. Proceed with caution.
The Takeaway: Money Can’t Buy Love (or Friendship)
At the end of the day, lending money to friends and family is a gamble. If you can afford to part with it and frame it as a gesture of kindness rather than a financial obligation, you’ll save yourself a lot of headaches, and possibly a few friendships.
So the next time someone asks to “borrow” money, take a deep breath, assess your finances, and remember: Lend it like you lost it.