Lending-Money-to-a-Friend

Helping a Friend Financially Without Risking Your Friendship

I was intrigued by the recent post by Adam showing how many of us have lost friends over money issues.

It is a very delicate situation to handle when a friend has financial problems. It is easy to get it completely wrong even when you have the best intentions in the world. This got me thinking about whether or not it is possible to help a friend financially without putting the friendship at risk. So what are the best ideas for doing this?

Let Them Live With You for Free

When someone is going through a hard time financially the cost of running their home can be the biggest strain. Finding the rental amount or the mortgage every single month can be a huge problem. Once we add in the costs of heating and everything else that goes with a home then it is clearly a lot of money to pay out each month. Would asking your friend if they want to stay with you help them out? Of course, not every friendship can stand the strain of you living together so you need to think carefully about how you would both cope. I was in this situation a few years back, when a friend gave me a helping hand by letting me stay with him. It worked out really well for a few reasons. First of all, we didn’t live in each other’s pockets, as we worked different shifts and I stayed out as long as possible most days. Another factor was that right from the start we agreed that it would be for a set period. I used this time to save up frantically and plan for the future. The final point was that we agreed at the start that I would do most of the chores around the place and buy in the basic groceries every week. I saved a lot of money thanks to my friend and will be eternally grateful to him for letting me stay with him.

Gift Money Instead of Lending It

I must confess that I hate it when a friend asks me to lend them money. We all know that this is a recipe for disaster in many friendships. So, if it’s an amount you can afford why not just gift it to them. You will feel great about doing this and your friend will be very happy too. It might be that they repay you in the future when they are in a better situation but why not just give them the money and forget about it? Just think about what you spend each month on non-essential things and consider for a second whether you could go without something from this list in order to help out a friend. There are relatively few times in life when you can use money to do something as useful as helping out a friend in genuine need.

Make a Deal with Them

Another idea is to come to an agreement over some sort of deal with your friend to buy something off them. I’m not suggesting that you take advantage of their poor finances to clean out their possessions at a bargain price. Instead, I mean that you could come to a mutually rewarding agreement. Let’s say that they ask you for $100. If you can afford the money but they don’t want to make it a gift then you could ask if there is something they want to sell. Maybe they have an old phone or DVDs they no longer want. Paying money to get something in exchange means that you can help them out without them feeling that their pride has been dented.

What other ideas do you have for helping out a friend in financial need?

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4 Responses to Helping a Friend Financially Without Risking Your Friendship

  1. This has just recently happened to me. I have a close friend for almost 7 years now, she lent me some money last 3 years ago because she badly needed it, but when I asked her if she can pay it already she refused to pay me and the worst thing was she didn’t contacted me anymore.
    Clarisse @ Make Money Your Way recently posted…Money making idea: scrap your old carMy Profile

  2. Myles Money says:

    It’s always a difficult problem, but basically it comes down to whether you can trust them or not. Unfortunately it can mean the end of a friendship if you discover that you can’t.
    Myles Money recently posted…To Hell With Credit Card Debt… Take The #PayCash Challenge!My Profile

  3. This has happened to me too. I made several phone calls to ask for a repayment but I was not successful. I had to Imagine that that’s a lost cash after it stayed for longer than a year.
    Amos @ Modest Money recently posted…How Owning Your Home Will Change Your LifeMy Profile

  4. I’d rather just gift the money than lend it, or lend it without the expectation it will be repaid. There are just too many things that can (and do) go wrong when lending money to friends.
    Jon @ Money Smart Guides recently posted…How To Live On $1,000 A MonthMy Profile

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