Comments on: If You Lend Somebody Money, Should You Put Expectations On What They Will Spend it on?

By: Updates: July 14 – 20 | The Outlier Model

Updates: July 14 – 20 | The Outlier Model — Fri, 17 Jan 2014 19:15:48 +0000

[…] Vodka writes about lending someone money. Should you place expectations on what they should spend it on? We’ve got our own take on a […]

By: Crystal @ Prairie Ecothrifter

Crystal @ Prairie Ecothrifter — Tue, 23 Jul 2013 21:19:21 +0000

I normally wouldn’t ask why they need the loan. But if they volunteered the info and then spent it on something unnecessary, I would be ticked off. No matter what, the times that I have lended out more than $50, I did let the borrower know when I expected to be repaid. I simply said I had a bill due in 2-3 weeks that I would need it for and made sure that they agreed to pay it back by then. I didn’t have to ask again either time thankfully and was paid back in full in a week or two. But I also have only lent out “real” money twice (like $200 once and $600 once) to two very trustworthy friends. I have turned down a few requests from friends in the past since I knew they sucked with money and I’d never see it again. It’s hard to say no, but I reminded myself of how angry I would be when they never paid me back and how that would actually hurt the friendship more than politely saying no.

By: Martilyo

Martilyo — Sun, 21 Jul 2013 17:07:49 +0000

I never loan money to family or friends. If I have the money, I just give it to them. If you loan friends and family money, it changes the dynamic of the relationship.

By: Michelle

Michelle — Sat, 20 Jul 2013 21:17:21 +0000

I don’t lend money to people. I do GIVE money only if it won’t create a problem for me. I don’t ask what the person is planning on using the money on as I’m not interested. As it’s a gift I usually will forget about it. The great thing about this process is I end up getting repaid pretty quickly and I’m always surprised because I’ve forgotten about the gift. It’s a great system. I get asked for money pretty rarely so it’s not a big deal.

By: Ree Klein

Ree Klein — Sat, 20 Jul 2013 19:09:31 +0000

Interesting debate… I have loaned money in the past but I don’t like to do it. I feel it puts a strain on the relationship. When I do loan money,I’m clear that it’s a loan and there’s a stated date that the loan will be repaid. If it’s a larger amount, I have a written agreement and ask the person to sign.

For the most part, the person asking for the loan is a crappy money manager. I can say that because that described me in my youth. I borrowed money from my family several times when it would have been unnecessary had I been a better steward of the money I earned. Things are different now…

By: femmefrugality

femmefrugality — Sat, 20 Jul 2013 19:05:06 +0000

Think you hit this one on the nose. This was actually an episode of Frasier: https://www.youtube.com/watch?feature=player_embedded&v=kloFaHSBBJA The confrontation between Frasier and Roz is a real lesson for all the lenders out there. If you’re not prepared for the person to use the money irresponsibly, you shouldn’t lend. If you’re not prepared to not get your money back for a long time or not at all, there’s a million excuses to say “no” up front that are less damaging to a friendship than an unreturned loan.

By: Tammy R

Tammy R — Sat, 20 Jul 2013 14:43:09 +0000

It’s something we have discussed as a couple at length, and I would not lend the money. Unless someone was starving or in need of a life-threating surgery, I cannot imagine asking someone else for money.

If I am foolish enough to lend the money, I suppose I would be upset if they spent it on something else (or I perceived that they did – your points above are really stellar, Daisy). I would probably have trouble dealing with that, so best not lend it in the first place.

By: Bridget

Bridget — Sat, 20 Jul 2013 14:41:42 +0000

Nope! I think once the money leaves your hands you have no control of what someone else does with it. I’d say set your expectations low and prepare to be disappointed lol

By: Mrs. Pop @ Planting Our Pennies

Mrs. Pop @ Planting Our Pennies — Fri, 19 Jul 2013 22:08:51 +0000

I guess I have a different perspective on it since we’re paying back Mr. PoP’s parents this week – a $50K loan that they lent to us 3 years ago to buy property. I can’t have imagined buying something frivolous with the money they gave us (or another random $50K we might have had laying around, yeah right!) when part of why they were so confident that we’d be able to pay them back was because of WHAT we planned to do with the money, ie a real estate investment.

So if we had gone out and bought a boat instead of a duplex, I’m pretty sure they would have had every reason to be ticked at us for putting their capital at greater risk.

By: SavvyFinancialLatina

SavvyFinancialLatina — Fri, 19 Jul 2013 20:33:18 +0000

We don’t lend money to friends for these reasons. I have lent money to friends before, and then watched them spend it on unnecessary items like a video game. There I was lending someone $50 that meant a lot to me. It probably meant a week’s worth of groceries! TO avoid this feeling, I don’t lend money.