Lending money

[HopenHappiness]

1. Well first off, if you can afford to lose $10,000.00 and want to lose a friendship, then by all means give it to her. Because chances are you will never see it again, and you will stew when you see her blowing money and not paying you back.
2. Secondly, if she lied to her husband, she could be lying to you about why she needs the money. I can say I gave money to my parents and just go out and spent it somewhere else.
3. I like the answer that I asked my husband and he said no. I then would also suggest that she comes clean before he finds out on his own.

 

[90Domer]

You gave me points I didn’t even think about. Thank you! Sadly, I tend to try to save people because of low self esteem. However, many that said you really don’t have that money is dead on. The reason I am a SAHM mom is that I wanted to give my autism spectrum son the best like possible. He is no even a shadow of the child he is today. He’s a little quickly, very smart and is very, very holy. With continued therapy, I think the seminary would accept him, as he is not concerned about things of this world like other kiddos his age (he is 11).

Personally, you all are great. Thank you truly for your time. I see CAF is running a campaign. I think there is where I will make a donation to help out.

 

[Xantippe]

90Domer said;

“I see CAF is running a campaign. I think there is where I will make a donation to help out.”

What an excellent idea!

If you did have $10k lying around, you wouldn’t give it to “Rich Ladies With No Common Sense,” as your charity of choice. Imagine the voiceover on that ad: “Your gift of $10k will help this sweet woman (here insert video of middle-aged lady with $100 hairdo) continue to deceive her husband about their financial situation. You CAN make a difference!”

 

[MainBrain]

As far as I am concerned having a friend ask you for money is like them asking to steal your money because they have no intension on every paying it back again. Time to find a new friend.

 

[90Domer]

As far as I am concerned having a friend ask you for money is like them asking to steal your money because they have no intension on every paying it back again. Time to find a new friend.

Purely my curiosity…do most people that borrow money not pay it back? I have never borrowed money because I would not want the guilt hanging over my head.

We got lucky in that my husband got a lay off severance and then was hired by another company. However, that was the only offer he received and who knows how long he would go without another offer if he did not get this one.

I’m now kicking myself for even considering it given the needs of my son. Because he is quirky, he needs a lot of social skills guidance by skilled professionals. And he has outright learning disabilities. We cannot take for granted that increased therapy may be in his future (sorry for the typos in the my last post), which my husband gently reminded me we need to be financially prepared.

One thing I have tried not to do is say that we cannot afford something. My in-laws used this phrase often to justify not giving us gifts on occasions, and then they would turn around and go to Florida for two months. So, I don’t want to come off as a hypocrite. I think my husband saying no, that we need the funds for our son is best.

Thank you again and God bless.

 

[HouseArrest]

If you say “my husband says no” or “we can’t afford it”, she has something to come back with to try to convince you. She could say “I will pay you back soon” or “can I talk to your husband”.

I would rephrase it a bit. I would say “we are not in a position to lend money” which ends it. She can’t argue with it. And my guess is if she had the guts to ask you, she has the guts to argue.

 

[Xantippe]

90Domer wrote:

“Purely my curiosity…do most people that borrow money not pay it back? I have never borrowed money because I would not want the guilt hanging over my head.”

Well, in our social circumstances, there are many forms of consumer credit available–signature loans, credit card advances, payday loans (!!!), etc. In our culture, if somebody is asking for a personal loan, it means that they have exhausted all of their other credit and nobody else is willing to lend to them. In other words, it’s a terrible idea to privately loan money in the modern US.

I’ve lived abroad in a country where it was normal for people to lend money back and forth to friends, but at the time, there was no normal consumer credit available there to average people. My good friend and I did it and it was fine. However, another acquaintance borrowed a small sum and I had a terrible time getting it out of her. The situation there was complicated by the fact that the government was 6 months behind on salaries for government workers, so these small loans were a matter of survival for a lot of people, and the people lending knew that they would eventually have money available.

In your friend’s case, it sounds like her marriage is going down the tubes, so it’s very likely that she’d have a hard time repaying you.

“We cannot take for granted that increased therapy may be in his future (sorry for the typos in the my last post), which my husband gently reminded me we need to be financially prepared.”

Yes!

“One thing I have tried not to do is say that we cannot afford something. My in-laws used this phrase often to justify not giving us gifts on occasions, and then they would turn around and go to Florida for two months.”

I understand your concern, but you’re not going to Florida for two months, are you? Nothing you’ve said so far suggests that you are living the high life.

“So, I don’t want to come off as a hypocrite. I think my husband saying no, that we need the funds for our son is best.”

Whatever you feel you can say most convincingly and graciously.

One of the advantages of putting the phrase “my husband” in your answer is that there’s an implicit reminder there that it’s best to involve our husbands in major financial decision-making.

Best wishes!

 

[Lorelei12]

If you say “my husband says no” or “we can’t afford it”, she has something to come back with to try to convince you. She could say “I will pay you back soon” or “can I talk to your husband”.

I would rephrase it a bit. I would say “we are not in a position to lend money” which ends it. She can’t argue with it. And my guess is if she had the guts to ask you, she has the guts to argue.

I agree with this. Saying that your husband doesn’t want you to lend the money is basically telling her that if it were up to you, you would. That leaves the door open.

Saying that you, as a family, are not in a position to lend money both leaves it vague as to your financial situation (which isn’t anyone’s business) and also makes it final.

Generally (and maybe there are some exceptions to this, but I haven’t come across any yet) I think it’s preferable, when you have to give someone an explanation about a decision, to say “we” instead of “my husband” or “my wife” wants to do this or that. It doesn’t matter whose decision it is, who wants it more, who had more (name removed by moderator)ut, whatever. The point is that even decisions one of you makes are joint decisions if the other is complicit. It shows people that you are one.

 

[Galbin]

I agree with the others. Just say you can’t afford it. Lending to friends is always risky, less alone this much!
.

 

[on_the_hill]

Speaking of conflict of interest, if she’s a client and you lend her money, it’s “dollars to donuts” that you’d get into official trouble for it.

The only situations I’m familiar with where a person lent money like this ended up with the lender never getting her money back. My mom lent my sister and her hubby money, and they’ve never been able to pay it back. Our former nanny co-signed and lent money to her daughter and husband when they were in debt up to their ears. Not only did she never get any $ back, but her son-in-law ran up more debt and ruined our nanny’s credit rating.

DON’T. DO. IT.

 

[MainBrain]

Purely my curiosity…do most people that borrow money not pay it back? I have never borrowed money because I would not want the guilt hanging over my head.

We got lucky in that my husband got a lay off severance and then was hired by another company. However, that was the only offer he received and who knows how long he would go without another offer if he did not get this one.

I’m now kicking myself for even considering it given the needs of my son. Because he is quirky, he needs a lot of social skills guidance by skilled professionals. And he has outright learning disabilities. We cannot take for granted that increased therapy may be in his future (sorry for the typos in the my last post), which my husband gently reminded me we need to be financially prepared.

One thing I have tried not to do is say that we cannot afford something. My in-laws used this phrase often to justify not giving us gifts on occasions, and then they would turn around and go to Florida for two months. So, I don’t want to come off as a hypocrite. I think my husband saying no, that we need the funds for our son is best.

Thank you again and God bless.

When you’re talking about lending money you are talking about trouble. My mother lent some relatives money. She never got it back.

 

[Xantippe]

Lorelei12 said:

“Generally (and maybe there are some exceptions to this, but I haven’t come across any yet) I think it’s preferable, when you have to give someone an explanation about a decision, to say “we” instead of “my husband” or “my wife” wants to do this or that. It doesn’t matter whose decision it is, who wants it more, who had more (name removed by moderator)ut, whatever. The point is that even decisions one of you makes are joint decisions if the other is complicit. It shows people that you are one.”

I think it’s perfectly kosher to use the spouse that isn’t there as the bad cop.

I do this with tradesmen, actually. They’ll quote me some figure and then I’ll say, I need to talk to my husband about this. It buys us a little time to discuss and research whatever it is.

Now, I agree that it’s a bad idea to do that with your own family, as it would tend to make them think of your husband as some sort of oppressive, controlling ogre, but I think it’s a reasonable tactic when dealing with people who are pressing you for money.

 

[HopenHappiness]

Hi,

Purely my curiosity…do most people that borrow money not pay it back? .

Like I said before, never lend out money you can’t afford to get back. I have lent out money 5 times. Once to a friend, it was a quick $250.00 loan, paid back in two weeks even though it was suppose to be a month.

Then my son - He paid it ahead of schedule, we were going to say forget it, but then we decided he was in the pickle because of his irresponsible spending, and that he should be accountable for it.

Another was my sister which wasn’t really borrowed, but I was giving her because she had been gravely ill and could afford to give it to her. Well 18 months later she is just about paid it all back, she wouldn’t hear of not paying it back.

Then my BIL we covered his share of his mothers funeral, well still chasing him for the money, soon to go to small claims court to recover it.

Then my SIL we also covered her share of her mothers funeral, she eventually paid us back, but that took 3 years of chasing.

But all money lent was extra money from savings. And none over $2000.00, we have been approached from others to lend them money and I just go with my gut and say, sorry we are coming up on retirement and all our money is tied up for most of them.

 

[Xantippe]

Hopenhappiness said:

“Then my BIL we covered his share of his mothers funeral, well still chasing him for the money, soon to go to small claims court to recover it.”

Dave Ramsey has a line, “If you lend your brother-in-law $50 and he never speaks to you again, was it worth it?”

 

[signit]

At their income level and lifestyle, they can probably just sell a car and fix this. Worst case scenario, they can set up some sort of payment plan with the IRS and be out of this in less than a year.

This is true.

$10,000 hardly seems like a crisis for someone on that income level. If it is they should simply cut back on something else.

You are a much more charitable person than me. If I was a SAHM and someone whose income was $200,000/year asked to borrow and enormous sum such as $10,000, my response would be ‘I am offended you even asked’

In face, it’s almost ludicrous.

A $200,000/year income is still in the top percentiles of American families. It’s almost inconceivable to me how someone on that level could “need” to borrow $10,000, when most American families manage to survive on a fraction of that.

My answer is a definite no.

Good luck.

 

[HouseArrest]

Lorelei12 said:

“Generally (and maybe there are some exceptions to this, but I haven’t come across any yet) I think it’s preferable, when you have to give someone an explanation about a decision, to say “we” instead of “my husband” or “my wife” wants to do this or that. It doesn’t matter whose decision it is, who wants it more, who had more (name removed by moderator)ut, whatever. The point is that even decisions one of you makes are joint decisions if the other is complicit. It shows people that you are one.”

I think it’s perfectly kosher to use the spouse that isn’t there as the bad cop.

I do this with tradesmen, actually. They’ll quote me some figure and then I’ll say, I need to talk to my husband about this. It buys us a little time to discuss and research whatever it is.

Now, I agree that it’s a bad idea to do that with your own family, as it would tend to make them think of your husband as some sort of oppressive, controlling ogre, but I think it’s a reasonable tactic when dealing with people who are pressing you for money.

Oh I agree that you can put someone off by telling them you have to discuss with your spouse. But that is under different circumstances. If you are discussing quotes for work you want done, you are maintaining a professional relationship with the tradesman. You are negotiating with the same understanding, that you need work done and he may or may not be the person you hire. You either contacted him, or are entertaining a discussion with him because you may need his services. That is the way that industry operates. Even if you don’t need him now, you may in the future, and the information is useful to you.

In this case, the woman who asked to borrow the money does not need or deserve a reason why she won’t be lent the money. You not only don’t want to lend the money, you don’t want to say anything that indicates that you ever want to lend the money. “My husband says no” and “We don’t have the money” could both be reasons that would change. But the reason the money isn’t being lent actually has nothing to do with either of those issues. Even if OP’s husband said yes and she had the money, she still shouldn’t lend it. She should also make it perfectly known to the woman that the conversation is over. There will be no more discussion. She is leaving the woman with nothing to say or argue against.

 

[PaulGH]

Hi Everyone,

I am sure I know the answer to this, but I would still love some feedback.

I have a friend/tax client that raided her retirement account to help her parents out of debt. She did not tell her husband, as she thought it would affect her marriage. Her extra tax on this transaction was $10K. She does not have the $ personally.

She did ask to borrow from me, as she is worried about her husband’s health and the future of her marriage. Even though we have the money to lend her, my husband is coming off a six month layoff. My husband and I have been savers. What concerns me is that this couple makes $200,000 a year and it sounds like they have no savings.

I am a SAHM, so we live on DH’s salary. It was a shock when he got let go, but the company was slowly dying. He has a new and better job, but it is in a dying industry (pharmaceuticals). We have a son with special needs who, thankfully, responded well over the years to therapy and is in Catholic school.

I spoke to my husband. He immediately said he did not want to be complicit in this mess because the husband does not know of this. I agree totally but have a hard time saying no.

Does anyone have any tactful answers?

Thank you.

I’m not sure I can help with a tactful answer, but I do think you should say no.

What really jumps out at me is this quote:

“She did not tell her husband, as she thought it would affect her marriage.”

Did it occur to your friend that dishonesty, and making bad financial decisions without consulting her husband, might also have a bad effect on their marriage? Yikes!

And while this in not really the point of your post, I was surprised to see you describe pharmaceuticals as a dying industry. From everything I have heard, the prospects for the pharmaceutical industry are looking pretty good right now. But maybe there is more that I don’t know, or maybe it is one specific part of the industry that is hurting.

 

[90Domer]

I’m not sure I can help with a tactful answer, but I do think you should say no.

What really jumps out at me is this quote:

“She did not tell her husband, as she thought it would affect her marriage.”

Did it occur to your friend that dishonesty, and making bad financial decisions without consulting her husband, might also have a bad effect on their marriage? Yikes!

And while this in not really the point of your post, I was surprised to see you describe pharmaceuticals as a dying industry. From everything I have heard, the prospects for the pharmaceutical industry are looking pretty good right now. But maybe there is more that I don’t know, or maybe it is one specific part of the industry that is hurting.

Not to derail the thread, but brand pharma is dying. Insurance companies do not want to pay for brand drugs.