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For Love & Money is a biweekly column from Insider answering your relationship and money questions.
This week, a reader who loaned a friend their savings asks what to do to get the money back.
Our columnist recommends either letting the money be a gift or confronting it head-on.
Got a question for our columnist? Write to For Love & Money using this Google form.
Dear For Love & Money,
I have a good friend who was going through a financial hardship, and she asked me for a loan. She assured me she would pay me back quickly. I’m young and don’t have a lot of savings, so giving her $2,500 was most of my buffer. It’s been months, and she puts me off or changes the subject every time I bring it up. I don’t want to lose my friendship! What should I do?
Sincerely,
Not a Loan Shark
Dear Not a Loan Shark,
I’m sure you’ve learned your lesson, so I won’t beat you over the head with it, but for the rest of my readers, I feel like I should put the moral of this story into words: This is why we don’t loan our friends money. If your friend is in dire need of financial support and you can afford to help them, give them the money as a gift. Never loan it.
The reason for this universal advice is summed up in your predicament, Not a Loan Shark. Healthy relationships have clear boundaries.
Why boundaries are so essential
I learned this lesson as a college freshman who ignored another bit of universal advice when I chose to be roommates with my best friend. After years of friendship, this new proximity eliminated all of the boundaries between us. In this “what’s mine is yours” free-for-all, our different approaches to cleanliness, socializing, and studying became points of conflict that nearly ended our friendship.
For my sophomore year, I decided to try my luck with the dormitory lottery. My roommate turned out to be an only child in every sense of the word. She labeled everything. She ran a line of tape down the center of our room, and on one occasion, she casually mentioned that she counted her refrigerated beverages.
I found her whole attitude off-putting. I had no interest in drinking her Gold Peak Iced Tea, and I thought it was presumptuous of her to assume I did. And I thought the line of tape down the middle of the room was bizarre, to say the least.
And yet, while we never became best friends, she turned out to be an incredible roommate. If only because she taught me that while boundaries are awkward, hard to set, and often feel antithetical to true friendship, in reality, they’re a necessary form of emotional organization that protect true friendship.
No matter how tight your friend’s predicament is — even if they are playing your heartstrings like a violin, even if you know they genuinely may not make it without your financial assistance — you cannot give them money with the expectation that they will pay you back. Setting this boundary might feel gross and unkind, but in reality, you’re protecting something important to you: your relationship with this person.
You have 2 options
That said, while I’m sure you would make a different choice now, I recognize that it’s too late for this lecture. So, allow me to give you some ideas moving forward.
You have two choices:
One, you can accept the money is gone. If you can reframe your perspective of the money as a “gift” rather than a “loan,” this may be your best bet for salvaging your relationship. But that is a big “if.”
There’s likely a piece of you that feels betrayed by your friend, and justifiably so. $2,500 is not a small sum. But if you can tap into the sympathy you felt for your friend when you first agreed to lend her the money, perhaps you can accept that her struggles are ongoing, and by giving her $2,500 you were an amazing friend who helped her when she needed it most.
But you also mentioned that you’re young and that $2,500 was your emergency fund. Not getting the money back may put you in your own financial jam. If this is the case, it’s time for option two: put your friendship on the line and get real with your friend.
Set up a coffee date and make it clear from the moment she sits down that you’re there to discuss one thing. Be direct, remind her it was a loan, not a gift, and push her to come up with a plan to pay you back. You can’t force her to open her wallet, but you can relentlessly redirect her if she tries to change the subject.
This conversation may be awkward and unpleasant. It might end your relationship — either in the bang of a fight or the whimper of things between you becoming too weird for either of you to bear.
I hate this situation for you because if you go with option two, there’s a chance that you’ll lose your friend, and she won’t pay you back either. But if you can’t get past your friend’s betrayal, you won’t have much choice.
How to decide which route to choose
Before you make this decision, I would encourage you to evaluate your friendship. On the one hand, your friend might still be in a financial bind. Maybe she changes the subject every time you bring up the loan because she still doesn’t have the money, and she’s embarrassed and stressed about it. She’s still the friend you love and trust, but she’s struggling, and having already burdened you with her struggle, she may be hesitant to keep you informed of her ongoing problems.
On the other hand, your friend may have some entitlement issues. Maybe she has no intention of paying you back and the reason she changes the subject every time you bring up the loan is that she believes if enough time goes by, you’ll eventually drop the issue.
After reading both of those descriptions, which one feels more true?
What you choose to do is contingent on how important saving this friendship is to you, and to make that determination, you must ask yourself if it’s a friendship worth saving.
Rooting for you,
For Love & Money