(I posted about this on the Down To Earth Forums for advice)

My husband asked me if he could loan a friend,money with a hunting firearm as “collateral”. I was reluctant, because I didn’t want it to be about DH spending $300 for yet another hunting implement. DH said that the intent was for the friend to buy the gun back as soon as he got the money. He and his wife are in a tight spot because they have three children, and he lost his more lucrative job in construction, having to take a job that paid considerably less.

I don’t mind helping, but his wife,told me that they were planning to go to a bar/restaurant tonight and invited me to go. I said that I appreciated the invitation, but I didn’t have the money to go. She replied that she wouldn’t say they had the money, but they were going to go anyway. I feel so angry that they would continue to mismanage money, even though they owe us $300 and know that I work a full time as a high school teacher and part time as a teacher in an adult high school on two nights a week. I feel guilty that I am angry at them.

I have learned a few things from this situation. 

1. Make sure you have clear terms. I should have come up with a repayment plan instead of a “when you have extra.” With their spending habits, they are probably never going to have “extra.”  If I had given terms of repayment, perhaps that would have given them more motivation.

2. Think about it for a lot longer that four minutes. I wish I had really considered the situation and their money habits. I have had  long conversations with the wife about their spending and budget woes. Had I spent time really considering it, I would have either said “no” or resigned myself to the possibility of never being repaid.

3. Consider if you could afford it if it didn’t come back. I should have determined whether our budget could afford the dent put into by giving someone else a “loan.” If I had done the math, I would have realized that it was one third of our savings at the moment, considering that we have had a few actual emergencies lately, which constituted dipping into our emergency savings.

4. Try to remove emotion from the equation. I was manipulated, and that is too strong a word, by their situation, having three young children to care for.  Motivated by emotions and the desire to help others, I may have put us in a worse situation.

I am not saying that loaning money to people who need it is a bad thing all the time.  I just think I should have been more wary about the whole endeavor. I wish I could shake this feeling of bitterness, but I am having a hard time. Does anyone have any suggestions as to how to deal with this situation?

2 Responses to “Lending Money to friends”

1. Laura says:

   January 22, 2010 at 4:08 pm

   You have made so many valid points. My biggest concern is the hard feelings situations like this leave behind. I know it’s not good to harbor ill-will, but it’s so hard to let it go.

   The only good that may come of this particular situation is being able to use it to say “NO” the next time.

   If you can get to a place in your mind where you can think of the hunting firearm as “yours” and the $300 a charitable contribution, you will be able to escape the bitterness.
2. Penny says:

   January 22, 2010 at 4:34 pm

   It’s hard to get to that point, especially since I screwed up this week with transfering money, and now we have considerably less in savings. Sigh.