Our parents always told us to be “neither a borrower nor a lender be,” and unfortunately like most things, our parents were right. It is inevitable that at some point during your post-secondary education one of your friends will ask you to borrow money. It is hard to say no to a friend in need of money for important things like food, bills, or rent, but this is why sometimes you just have to say no.
- The Return Date
There usually isn’t a timeline established between the borrower and the lender as to when the money will be repaid. This can cause stress on both ends as you don’t know when you are getting your money back and your friend doesn’t know when he or she has to pay it back by. If you have no other choice but to lend your friend money make sure you set up a time frame to be paid back by. You could ask for a certain amount back per week or all of it back by a certain date.
2. Lack of Urgency
You are not a bank, which means you are likely not collecting interest on your friends’ debt to you. This means it will not be their number one priority. In fact, it will likely become their last priority because they face no consequences by not paying you back as soon as they can. Again, if you must lend money have a conversation with your friend about how they need to make it a priority and pay you back as soon as possible.
3. Tension in Friendship
It can be awkward to ask for your money back from your friend, but the longer it takes for your friend to pay back your money the more tension builds between you. It is no secret that lending money can create strain in a relationship and it can even put an end to a friendship if both parties are not careful. If you have to lend money make sure you come up with a plan with your friend to avoid this kind of strain on your friendship.
4. You May Need the Money
You may think it is fine to lend to your friend money at the beginning of the month when you have more money in your bank and it doesn’t seem like a big deal for now. However, that is not always the case if your friend doesn’t repay you back soon enough. This can leave you needing money for important things like bills or food. A good way to avoid this problem if you have to lend money is to let your friend know in advance that you will need the money back by a certain date in order to pay for your own things.
5. They May Start to Rely on You
If your friend knows you are willing to lend them money and you don’t confront them about it, they may ask for money again. Even worse, they may choose to be irresponsible with their own money because they know they can ask you for money to pay off important things. If you choose to lend to your friend make it clear this is a one-time deal and you can’t bail them out the next time.
Overall, lending money to your friends is a dangerous game and it has the potential to ruin any friendship. As hard as it is to say no to a friend in need, it is sometimes necessary. An uncomfortable moment with a friend it much better than weeks and months of being uncomfortable while you wait for them to pay you back. If you choose to lend your money anyways make sure you have a conversation with your friend and come up with a plan of how they are going to pay it back – because let’s be honest, if mom and dad aren’t helping out, we are all broke students.
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