Mindset,  Money

Why You Should Never Loan Your Friends Money and 7 Reasons Why It Does More Harm Than Good

Reading Time: 5 minutes

Several years ago, I was at work when a “friend”, Suzie rung me crying saying the bailiffs were coming round as she was in a lot of debt. She continued to inform me that they were going to take her baby boys bed away and laid it on pretty thick knowing that vital info would pull on my heart strings, which of course it did. I loved her son so much and was quite involved in his life. Then she asked to borrow £2,000 from me. After hearing everything she just said, how could I refuse? So I asked her for her bank details and sent her the money and agreed on a 2 year payment plan. She didn’t say anything about paying any interest and stupidly neither did I.


Then the following week Suzie, her boyfriend and their son went on holiday to Blackpool and then announced that they had booked a date for their wedding. (28 Aug 2010) – This all happened in a matter of a few weeks/months.


I felt like an absolute fool. I was asked to be a bridesmaid BUT I’d have to buy my own dress. Then I was told I couldn’t be a bridesmaid because the best man was going to be my ex boyfriend …. despite the relationship between the bride, groom and best man being a distant one … which was awfully strange. As you can imagine I was so hurt, confused and angry. I felt like I had been played.  


In January 2012 I bought my first property, which came along with several problems. Three months later I went on holiday to Vegas and whilst I was away Suzies then husband, messaged me asking for more money. I was totally shocked. They were aware that I had just bought a property and the problems I was encountering and they still had the audacity to ask for money.

After considering it for maybe 2 seconds, I messaged back saying I wouldn’t lend them any more money and it was time they both took responsibility for their own finances. I recommended 2 books that I felt would be really helpful that would help them build a future for themselves long term (The Parable Of the Pipeline and Think and Grow Rich) However they didn’t pay attention to the recommendation and asked someone else for the money.


Two years later, they divorced and are both in worse financial situations than they were 7 years ago. It’s so sad.


It occurred to me that they would sooner take it from someone else than come off their benefits that they believed they were entitled to, but that’s the mindset of a long term benefit claimer.



Six years ago I began reflecting over the past 20 years of “friendship” with Suzie and I began distancing myself from her and her family. We want completely different things out of life and we had grown apart since our school days. Our world views had changed and we were going in completely opposite directions. Why was I trying to maintain a friendship with someone who clearly didn’t pay any interest in my life until it could benefit her in someway. She clearly didn’t respect me or what I was trying to achieve in life.



Crabs In A Bucket  

The metaphor of the crabs in a bucket describes this perfectly. When one crab attempts to crawl its way out of the bucket, the other crabs try to drag the crab back into the bucket. It’s like “if I can’t have it, neither can you” or “stay in this bucket and be the same” or “make me feel better about my life by never changing”


Sometimes you have to let these so called friends go and walk this path alone .. or at least until you meet more like-minded individuals that support and empower you.


If anyone was to ask me if lending or borrowing money from friends or family was a good idea, I would say HELL NO. It’s not worth the damage it could do, but if you do – no matter who it is, put a written agreement in place with monthly payments and interest rates included. Then if a payment is missed or if the money is being asked to be paid back quicker than agreed, you can both refer back to the agreement to dissolve and resolve any unnecessary complications.


After reading my story you can understand why I am against loaning money to friends. I am not the only person to have had a friendship end due to money. Of course, make your own mind up, however, please be aware that it WILL cause complications of some sort. Just go into the agreement with your eyes wide open and accept that you may never get your money back and if you do, that’s just a bonus.


So to recap, please see the short list of reason below as to why you shouldn’t lend money to friends:


7 Reasons Why You Shouldn’t Lend Money To Friends:

  1. Loans between friends aren’t seen as a priority
  2. It’s difficult to ask for the money back
  3. You might need the money
  4. The borrower comes a servant to the lender
  5. The borrow may ask for more
  6. Usually the loans are interest free
  7. You could lose your money AND your friendship

Here is a link to an official free loan agreement from the Law Depot. Hopefully this will help you avoid any of the mistakes I made when lending a friend money and help you to sleep at night.


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