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How to decide whether to lend a friend money?

Does your neighbor bore you? Lend him some money.

Italian Proverb


I love the simplicity and wry humor of this quote.


In this blog, I would like to offer, what I consider a practical and clear-headed approach to discussing any kind of a loan of money to a friend.


People have asked my advice many times over the years as a Psychic, about lending money to a friend ... so here is a quick ...outline of the minimum I would need to have answered to be comfortable discussing any loan with a friend.


  1. Has the friend come with a clear explanation for what the money is needed for? Elaborate details are not necessary, but I would need to hear something like.... I need money to cover my expenses for next 3 months...


  1. Does the friend come with a clear dollar amount plus a reasonable idea and timeline around repayment?


  1. Is the friend willing to sign a promissory note... just in case something was to happen... to either of you? Or if some issue arose around repayment?


  1. Can you honesty afford to lend the amount of money being requested?


  1. If for whatever reason the repayment plan failed what do you think the impact would be on you? And on the friendship?


  1. Would you consider just gifting the friend the amount requested?


  1. Has this friend asked for a loan previously? What was the experience like for you?


  1. What bottom line is your comfort level with the idea of loaning money to a friend?


If a friend came with uncertainty about amount needed... repayment outline or commitment to signing a promissory note... my answer would be a clear ... No.


Even if the friend were emotional, distraught, or suggesting they were feeling embarrassed to discuss things in detail... I would insist on putting off such an important discussion to a calmer time.


At the expense of sounding harsh... witnessing a friend upset is sad... but a true friend would be thinking of you as much as themselves.


An impassioned... “Can you lend me money... I am desperate” is not in my opinion a fair approach to take in asking someone you call a friend for help.


A reasonable... “This is extremely difficult for me, but I need to ask if I can borrow money to... take care of ...

I expect to be in a position by...

to start paying about... dollar

amount every two weeks starting...


The above I would consider a reasonable, thoughtful, and appropriate approach that would likely get my support.


This kind of clear-headed approach ultimately cuts back issues of awkwardness, not hesitating to put things in

“writing” via a promissory note, in my opinion makes it a clear transaction... you both know where you stand... no guesswork!


At the end of the day ... yes, they are a friend but also an adult, and an adult is expected to handle their affairs including their finances with reason and maturity.


Are there any exceptions, that I would take into consideration if approached by a friend to lend money?


If I knew a friend was ...


Organizing to leave a domestic violence situation or facing significant health crisis, I would likely give money not as a loan but as a gift... approximating what their need for next 3 months expenses...

If I could not afford to help with this amount, I would be offering scheduled childcare assistance, grocery shopping, meal prep, drives to ...appointments... regular calls of support and encouragement.


Struggling with addictions... I personally would not feel comfortable giving monetary support. I had a situation arise where a friend with a drinking problem asked me for money.

I responded that I had thought about it and what I felt I could manage would be paying her cell phone bill for next 12months... she was initially not pleased with my response ... but in the end accepted my offer. Over next few months I started (by her choice) to see less and less of her.


About 8 months after our talk regarding a loan she successfully entered rehab. And last I heard she was back to work and healthy. I am still however convinced that my decision to be of help by paying for a phone and not providing cash... was the right one for me... and most probably my friend... either way this friendship took the course it was supposed to.


Mental health, with my personality I will not “sit still” if I have suspicious or concerns about friend’s mental health...


I would be actively seeking to determine if my friend’s mental health was leading them into any kind of danger... like thoughts of self-harm... once I was secure in understanding the true state of their mental health... my response regarding a loan would be same as supporting a friend fleeing domestic violence.


Collectively, discussions about lending money to a friend are complicated ones... but ultimately your response needs to be governed by your mind and then your heart. Trusting this blog has provided some food for thought. Till next time.





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