Friends and Family Asking for Money

Keep saying no and eventually they will stop asking. People can be so bold, it amazes me as well that people ask so easily.

I've been on the giving and recieving end. We have had to borrow minute sums of money from time to time ($100/$200) but try to pay it back or work it off quickly. When we came into a few months where we had it lend/spend, we gave my sister a loan that ended up telling her not repay because we were better off that month than her...
So I guess it depends on why and how they need the money and whether or not I can afford it. I would never lend anything that I expected back. Especially with family or close friends.

You are completely right!
Just say that it's your policy NOT to lend money to friends or family (maybe with the exception of a dire emergency).
You wouldn't offer a drunk a drink, so why give money to those who are irresponsible with it?

Oh, do I feel your pain. My husband and I have lived for nearly 30 years on a combined income that's considerably less than one average schoolteacher earns, so that we can do educational work that feels like a positive contribution to society. We budget carefully, are extremely frugal, buy many of our clothes and housewares at second-hand stores, seldom have a meal or movie out. Old cars, no TV, no dishwasher. Pretty much bare-bones living.

But we owe nothing, and paid for our house one load of lumber at a time as we built over several years. We tithe at least 10% of our income to worthy causes. So, we're in pretty good shape, if you don't count the impossibly expensive, high deductible health insurance that pays not a penny of our actual medical care. I've had to put off needed surgery virtually forever – I hope I'll qualify for that llfe-changing repair if I make it to Medicare.

Family members KNOW how close to the bone we live. And yet when some really urgent need or want comes up, they will ask us, the people who live poor while they party, because somehow they have noticed we actually manage to save toward larger expenses. We fell for the sob stories a couple of times, and really have lost hope of getting the thousands back that we loaned, even though those family members are still enjoying luxuries that we can't begin to afford. They always have a compelling reason to put off making any repayment effort until next month or next year.

So, when I realized I needed to learn to say NO!, I found a system that really works well for me (though my husband is a soft touch and just loaned a nephew a few thousand more – grrrr!). But my system is this:

Repeat the request and acknowledge how important it feels to the asker. Use the magic connector "and." Then finish with something like "no, that does not work for me." All in a calm and friendly voice, as if their request and my refusal are the most natural things in the world. I'm careful to add not a hint of regret, excuse or explanation – those would only weaken the resolve of your refusal.

So, it might come out like this, with a kind smile:

"So, sis, I hear that you're afraid you'll lose your house if you can't borrow $6000 to meet your payments. I can sure see that this is a big worry for you. AND, no, that does not work for me."

Repeat as necessary. Best!

(By the way, Sis did not lose her house. Either she found alternate ways to meet that expense, or it was an overblown story to begin with.)

My jaw is on the floor after reading this - This is literally my life. We are a cash only family, good with our money, we have a downpayment for a new home, and we have people (family and friends) who call and ask to borrow. They assume, just as your friends, that we have money to just throw around because we don't have insurmountable credit card debt and we do have professional careers that tend to pay well.

We have worked our butts off to get here. They have not. The best advice I can give you is that if someone really needs the money (ie someone works really hard and saves but then gets knocked down and needs help back up) then loan it to them - but don't expect to get paid back. But I am with you - most of the people asking are terrible with money and have made choices that have gotten themselves where they currently are. Continue to do what you are doing - telling them no in a loving way. They will eventually get that you won't bail them out.

Next time someone asks to borrow money, buy them tickets to see Dave Ramsey's next Financial Peace show.

Give them the tools necessary so they don't have to ask you for money help ever again

Hi,

I totally understand! We have some people who do this as well. The only thing that works is be consistent. Do not give in just because they put more pressure or they increase the sob story. You are being smart with your money and doing what you have to to have a good financial status. All I can say is when they ask----say, we have worked so hard for the money we have--we don't have money to lend or throw around. I am sorry you are in a tight spot, but I can't help you with a loan or I can't help you with paying your bills. Keep repeating until they stop asking...GL!

M

I never lend money, anymore, I expect to be paid back. I have been disappointed with the amnesia borrowers tend to have on the loans I have made in the past.

Now, all my "loans" are made to family in need. With the loans I have made recently has come an offer to assist them in learning how to live within their income. Its "amazing" how many borrowers don't want to borrow if they think they will have to change their lifestyle and begin living within their income to get the "loan". (It really frosts me when someone wants to borrow money for a party, go out to eat, or go on a lavish vacation.)

My mom was brought up during the depression by my widowed grandmother. They learned frugality out of necessity. My mom could pinch a penny until Lincoln begged for mercy. She taught me. I raised 8 kids and paid off two cars, paid off a home and saved for retirement on wages that were within $50 per month of qualifying for public assistance (welfare). Even when I was eligible, I never even considered applying for welfare.

I watch the sales, shop wisely, buy dented cans, discounted meat, and dented/discounted boxes of food. All the lights in my home are energy savers. I've added insulation and installed double pane windows which has cut my electric bill in half and more. I've taught my kids to do so also. Some of them have learned and practice what they have learned and others have not. But they do what they do because they want to, not because they haven't been taught or have enough self control.

Offer to teach the "Big Spenders" how to live within their means so they won't have to borrow. It goes with the old saying, "Give a man a fish and you feed him today. Teach a man to fish and you feed him forever."

Good luck to you and yours.

Yes, and I just say no unless it is something like funeral expenses or if they need food. You may just tell them to stop asking and that your belief is to be neither a borrower or a lender.

Yuck, that's really uncomfortable. We've never had friends ask to borrow money, and we would never ever ask our friends for money. We once loaned my brother 10K for a down payment for his first house, but that was because we knew that he would definitely pay it back. We all even drew up a rudimentary loan doc paper and signed it. He paid it on time and all was well.

My parents once loaned their longtime (40 plus years of friendship) friends 20k because they needed help w/ cash flow w/ their business. Guess what? They defaulted on the payback terms and my parents finally had to initiate suing them after several missed deadlines. Luckily, they had also put together a loan doc w/ the couple and had legal recourse. They finally got their money back, but it took the threat of a lawsuit to get it. I don't know how their friendship was able to survive, and it was very, very strained for a few years, but they are still friends. I personally would NOT loan any money to friends and very, very selectively to family if I did have the money.

Can I have a dollar? ;)

Honestly, I'd be a bit flattered that your friends and family are comfortable enough with you to even ask. It takes a lot to swallow pride and ask for money. I'd continue saying 'no' to lending the $, and continue giving other financial options instead. You've handled it really well thus far. Do this long enough, and they'll start to understand that the 'Bank of Galwaygirl' is closed for good ;)

BTW, I don't have this problem, no one asks me because I'm BROKE ;)

.

If you can say no and sleep at night, do it. My husband is the one of five kids in his family who has a professional job, no credit card debt, money in the bank, etc. We're paying the taxes, upkeep, etc., on his mother's house. We paid for a sister-in-law's funeral (dad-in-law is ill and, unfortunately, we're expecting to be asked to pay for that funeral as well). So far, we're owed over $10K with no hopes of seeing the money until my mom-in-law sells her house. Bro-in-law also fell on hard times and after asking everyone else in his family (and his wife's) for money (apparently they all gave them something), he asked us for $1,000 about a year ago. Promised to repay. So far we've seen $200 back. We don't expect to ever see the rest. We try not to talk about our finances because we don't want the family to know how much money we actually have. We're smart shoppers and savers and don't live beyond our means.

God I am glad I am old...er. :p My generation doesn't do such things. Very rude.

I think I would start pan handling before I asked anyone other than a bank for money. I changed that from stripping to pan handling cause, well, I am old, who wants to pay to see that! :-/

Maybe you should suggest she go visit a financial counselor?
Or offer to help her set up a budget system for herself.

I've had lots of friends ask me for monetary help over the last few years- which is obnoxious because I'm a SAHM doing in-home daycare to help pay my families bills. Usually the friends who are asking for help are from dual income, non-child rearing households.

Sometimes it's ok to be "gentle" in your honesty. I don't think offering to help your friend or anyone asking for money find other solutions, or learn how to budget is offensive. Not many people are raised to be financially savvy these days.

best wishes!

I'm literally waiting for this to happen. We are saving money for a down payment as well and family knows this. A lot of my husbands family struggles financially. We try to help out his brother when we can, but we make him work for it! We knew that his car registration had lapsed on his birthday and he needed about $100. We are selling our house and at the time we were in the process of getting it ready to put on the market. We had him do all sorts of odd jobs - paint the porch, fix some facia on the roof etc. He would never ask for money for nothing though.
I would not only tell them no, but also offer a brief explanation that the money you have saved is already "spent". It's already planned for your new home - otherwise you'd be in Hawaii!!!! Idiots!

If you have the time, I would suggest helping her get organized and learn to live within her means. My brother is very good with money and has helped several people get out of debt just by going over their bills and income. Your friends could call or write to each creditor and explain their situation. As long as they are trying to send something and keeping their rent/mortgage, insurance, car registration up to date, the rest can wait or be reduced. In California, PG&E will help by assessing your bill and make each monthly payment the same. The phone company has "hardship" rates and their are food banks. Your friends and relatives just have to explore all avenues.

Having said that, I guess I will never be rich in a monetary sense because if I have relatives or friends in need and I can help I do. By this I don't mean I going to help them with their BMW payment, I mean I will give money (not over and over), but I give it to them and if they pay it back, that's great. I don't give so much that I can't pay my bills, it's just some people are better with $$ then others.

If people are making you crazy, you need to lay it on the line and make the "I LOVE YOU BUT" speech. If they are true friends (relatives or not), they will stay true.

Blessings....

You'll have to be firm with these people. I took the Dave Ramsey class - it was excellent. Perhaps you could recommend that to them. You are doing GREAT with money! Kudos to you!

Don't lend the money, and it might be wise to tell her how you feel. If you think you might lose a good friend by doing so, then just say you don't have the money and explain to her how you are on a cash basis only. Hey, cry poor also. I do nowadays, because I don't want people to think that we're o.k with our finances. It doesn't pay especially in this economy.

OH my gosh, my husband is hit with this all the time and he is always coming up with money for people. Part of me feels like a tyrant when I get upset about it, but I have denied myself many things over the years to be able to have my home and that means while i watch others go to restaurants, too and get new clothes all the time, I wear some of my same old \same olds, etc. There must be someone every other week who is related to my husband who is sick, in the hospital, or just needs money that he sends them. And while not in the thousands, these people nickel and dime us to death (or in this case twenty to thirties to death). I do not have lots of empathy for people who cannot pay bills but are at expensive outings all the time, or on trips, or concerts and hit us up when they realize oops, they cannot pay their gas bill. OUCH. So answer to this, yes. But there really are a lot of people who are bad with money, so just tell them sorry you can't. I am almost there with my husband on that one. In the meantime I definitely help those really in need, you can see who is who are not, but I am afraid the others can learn to do without.

Only loan money you can afford to lose.

it's great that people think they can come to you in their time of need...however, there's a difference between "need" and "want"....while I'm sorry that your brother's fiance is having expensive dental work done - I agree with you on the payment plan....

Your GF that wants money for a party?! HOLY SMOKES BATMAN!!! That's some skewed thinking...she's got her priorities all messed up and she will continually find herself in the shallow end until she pulls her head out of her a$$..

As to you not shopping this week? If you have the money, do NOT hold it for a down payment - you NEED to live. If you have the staples in your home and you can get funky with the menu - go ahead...but I guarantee you that spending money on groceries will NOT take away from your down payment or ability to buy a home. GOOD LUCK ON THAT!!!! I hope it's your dream home and you make many happy memories there!!!

About friends and family asking for money? When the subject comes up? Change it. When donations/loans are asked for - present them with the Dave Ramsey book about financial freedom and tell them to read it.....

GOOD LUCK!!

I have family members that will do this also. Stick to your guns and keep telling them no. They need to learn that you are not the bank. Good Luck!

I like the idea of lending them a Dave Ramsey book or some other book about finances. I know I have a couple books on my shelf that I wouldn't mind lending out or giving away. Or spending some of your time helping work out a budget.

I've never had friends ask to borrow money. I've loaned money to my siblings ever since I was 12 and started baby sitting. But nothing more than $100, except for one time I loaned a couple thousand to my brother so he could buy a used car that would fit his growing family. He drew up documents and a payment plan. He also borrowed some from my parents and other siblings, so that made it easier, not such a huge chunk of money for just one of us to loan. He got a better loan rate by not going through a bank and we got better interest than if we'd left the money in our savings account.

ok, I can see lending say 20-40 buck when they actually have a need....like food or diapers for the kids, with a promise of repayment in a certain amount of time. other than that. no. thousands of dollars? who is even freaking brave enough to ask a friend for that amount of money?!
as for your friends who has to have a party this weekend...she's got money for it but not her bills? please. she needs to learn to seperate luxury wants from acutal needs and learn to live on a budget.
you and your family have made any number of sacrifices to get a down payment for your own home so don't you dare feel guilty or anything else for not helping them with their financial struggles. congrats on the house!