I was listening to a podcast where a guest who recently came into money was asked how she deals with mooching family members or friends. It got me thinking about this a lot! As you've gotten your finances in order, have you personally experienced this?

Whether it's the friend who only reaches out when they need an extra buck or the family member who can't seem to get it together, I was curious to know how you all deal with friends or family who mooch off of you. 

Does anyone have any special rules when it comes to lending money to family or friends? Do you establish formal guidelines or contracts with people you lend money to? Any positive (or horror!) stories? Has anyone ever had to confront a friend or family member for doing this? 

Original Post

Lending money to family and friends is the best way to loose them. If you can afford to let that amount of money go and not get it back, then ok, it's gone. If you want it back and they refuse to send it your way, then you become the bad guy.

If you loan/lend it to them, get the terms of repayment in writing (including when it is to be repaid by, interest or not, be careful to not go into usury (a radically high % interest rate) and signed by both parties. That way there is clear communication of what is expected and when. If they choose to not honor the contract they signed, then you have a potential court case. Keep the lines of communication open and documented through email, texts, something in writing. No doubt you will be interpreted as the bad guy for wanting your money back. So, do not loan or let money be borrowed by family or friends in any significant amount. A few dollars here and there is minor, I am talking about bigger amounts, which needs to be determined by the people involved.

They may not initially like the fact you refused to help them, but it is better in the long run if you plan to stay on good terms.

Agreed. If you can't afford it, don't lend it. If you can afford it, treat it like a gift, because most likely, you won't get it back.

Also, if you do decide to lend, a contract would be good. I once borrowed money from my late mother. Because I knew how she respected money and infrequently got her money back from relatives, I drew up a contract to pay her off in 6 months and then I added 10% at the contract end just to show her I appreciated her doing this for me. It's about respecting others' money.

Lately I have been wizened up on a way people can make you feel if you do not give/lend money to them, it is called "dry begging". And can proudly say after multiple, yes, multiple failings for it, I smartened up. It is when people mention problems but do not directly ask for help. It is an indirect way of being needy and getting what they want.

Example: I need to get to work but my car is out of gas-they won't come out and ask for a ride or for money, or on that hamburger smells so good but I only have $10 until payday-they want you to foot the bill. The situations go on and on.

Has anybody else experienced this?

Yep, I've experienced the dry begging. I ignore it unless it's a close family member. Anybody else, forget it. Frequently, people made me feel guilty for asking for my money back; that's why I stopped. I wouldn't even lend money to my sister about 6-7 months ago because (a) she never pays you back or (b) reminds you of some gift she once gave you, and (c) everything is an emergency with her. So, last time she had an emergency, I didn't make it "my emergency" and just said I couldn't spare it. No other explanations.

I think it's up to the person lending the money.  We know our friends and family well enough to also know what to expect when it comes time to repay any loans.

Keep in mind that even tho you might write up a contract, the procedure to pursue enforcement if the contract is breached is usually not worth the time and effort to do so, and it almost always ends up badly between family or friends and you.

We have a few rules in place for lending circumstances:

1. Mentally, we kiss that money goodbye before we loan it. That helps with some of the emotions if we are let down.

2. The only way we will do business with friends and family is if we expect no discounts or benefits, and we make it clear if the service provided falls short we expect them to make it right.........just like any other company we would hire or purchase from.

Typically I would recommend not lending money to anyone, but we have managed to find a way that meets our expectations.



Last edited by mintjulep

I don't lend money to anyone but my children. They are married and can both afford to pay it back and will without being reminded. If I had to remind them as long as it wasn't a large amount, I would just forget it. But it hasn't happened. 

Now I don't LEND money to a dear family member because she doesn't pay back, but she is a single woman working two jobs and struggles. She has done some dry begging (love that term) and if I can afford it at the time and it is a true need, I will GIVE it to her. I let her know it is a gift. 

Thought I would post this after reading in one of my AARP eletters this morning. I think a good many of us have dealt with friends and family asking for loans, so this hit home even though the story (daughter to parents) might not be the exact circumstance. But it is a good example of how a good deed can steamroll into a true problem, along with some of the emotions that rise.  Hit home with me!


Last edited by mintjulep

Hi Mint Julep,

Many thanks for the link to an informative article, lots of good information I would never have thought of. Sometimes we make the worst decisions of our lives based on the request of others-meaning family, friends, and others. Seniors can be very gullible especially when it comes to family and deals that sound too good to be true, with dreams of repayment.

A good source of information is available at senior centers, they have presentations on how scammers work and how to protect yourself. AARP is also a good reference.

redcatcec, yes....seniors are victims by scammers and very vulnerable. I could share a story, but it's not really mine to share, about a family member targeted by scammers and luckily we accidentally found out about it before they lost too much money.

In our case we were dealing with a family member just starting to slip into mild dementia and any warnings and guidance we gave were forgotten immediately so the scammers kept hitting. We finally had to get involved on a level we preferred not to, but it was imperative.

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