I’ve Loaned Money to My Friend and It Is Eating Me Up

I received two emails and comments in the last two days telling basically the same exact story: person lends friend money, friend doesn’t bother ever paying any of it back, person is bothered by this event. Here’s one of the stories:

About three months ago, I loaned one of my best friends a month worth of rent. She didn’t ask me for it but I loaned it to her anyway because she really needed it and I had the money. Since then I have asked her a couple of times about the money and she just says she will pay me back later, but last week we went to the mall and she spent $200 on clothes and didn’t even mention the money she owes me. How do I get it back?

In the past, I’ve suggested that loaning money to family or friends is a bad idea, and this is a perfect example why: it injects some intense feelings into a relationship that may not be able to handle them. Instead of having a relationship of equal friends, you’re introducing an aspect of inequality – lender and borrower. No matter what the terms of the loan, this inequality exists, and that inequality is quite often like sand in your shoes – it slowly irritates over time and leaves you raw.

Here’s my advice for dealing with this situation.

Ask yourself honestly if the money is more important to you than the friendship. Be completely honest about this question – many people will blow it off and believe that obviously friendship is more important. However, this may not actually be the case. Spend some time without that friend’s presence and really think about the state of your friendship right now. Is the borrowed money changing your perspective on that person as a whole? This is an answer that you need to find for yourself – no one can tell you which answer is correct.

If you do decide that the friendship is more important, forget about the money. Just let it be and don’t think about it again – imagine that you gave the money to the friend as a gift. If at some point the friend does pay you back, accept it gladly, but don’t make a big deal out of it. Continually focusing on the loan and raising it as an issue will do nothing but stir things up and won’t be healthy for either one of you, so just drop it and walk away.

If you decide that the friendship is falling apart anyway, be extremely straightforward about wanting your money back. Situations like this are not the time for being coy or telling yourself that there will be another time to bring this up. It’s obviously stressing you out because you’ve reached this point, so just flat-out say that you want your money back. Be reasonable about it, of course, but be persistent. If there is genuine friendship still left after the mistake of loaning money, it will survive this – you need to get the lender-borrower aspect out of the picture as soon as possible.

In either case, don’t loan money to friends ever again. If you feel a need to help out a friend in a financial situation, give that person a one-time gift, make it clear that it’s a one-time thing to help through the pinch, and then just forget about it. You can also help out in non-financial ways – the ways a good friend would help another, like offering a place to sleep and so on.