If you’re reading this, you’re probably a pretty decent person; caring, willing to help others, and unselfish. Maybe you loaned money to a family member, a friend going through a crisis, or bless your heart, someone you barely knew? Well, you aren’t alone! These are four mistakes I will not be making again when it comes to loaning money to others.
The Perpetual Screw-up;
We all know the perpetual screw up. It’s a friend you went to college with, a family member who can’t seem to keep a job, or even a grown child who looks to you for constant financial bailout. I loaned $2,500 dollars to an old friend when she was having money problems. I love her, I knew she really needed it, and she promised to pay it back within a year. She moved from job to job, apartment to apartment, and was sometimes hard to reach, but I never expected her to never pay me back. I will never again loan money to someone who isn’t showing a true effort to take control of their financial life. I found out later that she made twice as much money as I did. She just spent it on expensive clothes, going out, and shopping. Lesson learned!
The Drug Addict:
I hate tough love! I like the warm snuggly kind of love. Unfortunately, most of us know someone addicted to drugs(meth, heroin). It can be really hard to watch them struggle and not have money for basics like food and shelter. I loaned $800 dollars to a person I had known for 5 years. He said he was ‘getting clean’ and just wanted to start over. The money was for an apartment. He spent the money on drugs. He has paid me back, now that he is clean and sober but it took 3 years. I won’t loan money to a drug addict unless I see proof they are clean and sober. If someone overdosed because they bought drugs with the money I gave them; I would have a hard time with that.
I don’t know what I was thinking when I did this. One of my girlfriends was a really responsible person and I completely trusted her. We had known each other for 15 years. When she went through a divorce I helped her out financially to the tune of $5,000 dollars. A warning light should have gone off when she sat on my sofa night after night whining about her situation but doing nothing to change it. She basically lived off of the money, took her sweet time finding a job, and by the time she ‘grew up’ a little bit, our friendship was in ruins. I was so exasperated with her that I told her to keep the money. I just wanted to be away from her negativity.
I know; this is a no brainer. Why did I loan money to someone with bad credit? I’ve gone through financial hardships before, but I always pay my debt. I guess I assumed that this person would too. Bad credit can be from hospital bills or a lot of unforeseen circumstances. I loaned a person in my family $7,200 dollars for a car. We set up a repayment plan, signed documents, the whole nine yards; to this day, I’ve seen $460 dollars. Surprise, surprise. I can’t morally ‘go after’ this person. People mean more to me than any amount of money, but I did learn my lesson. People have bad credit for a reason.
Live and learn, right? I have a very kind nature and want to help others, but I had to learn that I have to put my family first. Sometimes, people need to go through tough financial times and not have a handout; then they will find a way to earn money themselves.