How To Lend Money To Someone You Don’t Trust At All

This week, Ask Chelsea Anything is taking on a very sticky question that most of us have been involved with at some point, on one side or the other of the equation: lending money between friends. In the best of circumstances, when both parties are responsible and trustworthy and have a great track record with money, it can feel awkward and sticky. In the worst cases, when the person asking for the money has reason not to be trusted, or the person lending it isn’t in a great position financially, it can be the stuff of ruined friendships. Money is one of those things that can trigger so much more, especially between friends: power, control, envy, resentment, suspicion. Money, no matter how cut-and-dry we attempt to make the transaction, injects everything with emotion and messiness, and can amplify whatever other sentiments we happen to have towards the other person. It’s not always reasonable, but it’s human.

So let’s get into this week’s question, and in the meantime, don’t forget to send all of your most pressing questions to askchelseaanything@thefinancialdiet.com

Dear Chelsea,

One of my best friends back home contacted me asking me to lend her some money. We know each other since pre school, and is one of the few friends that I still have back home (I left to live overseas some years ago).  She is going through a rough phase: she just gave birth to her baby 6 weeks ago. Having finished med school relatively recently, she is going back to her entry-level job in 2 weeks, and she needs around $250 to make ends meet this month after all the hospital and baby-related expenses. Although I am myself also in an entry-level job, this amount would still be affordable. So I am compelled with all my heart to help her, but there is one thing that makes me anxious: her partner is an asshole and a financial disaster.

Long-story-short, the father of her baby is 6 years her junior and a college drop-out. After leaving college, he hasn’t been able to maintain a job; a year ago, she was helping to finance his living expenses in another city (where he went looking for work). And while she was struggling to meet his and her expenses combined, he cheated on her. When he came back, he cheated -again- on her, this time with a 16-year old girl. Of course she forgave him for all, and when she got pregnant, he claimed that the baby was not his and left her (again!) for the underaged girl. We all begged her to get over this jerk, but still, she is now living together with him and the baby in the house that HER parents are now paying for. You would think after having a baby, the guy would grow a pair an be a financial support for her family while she was recovering from her emergency C-section. But nope. She is still basically the only breadwinner.

So I find myself in a dilemma, because given all this background I am 99.9% sure that 1) I will not see that money back, 2) she will come back asking for more, 3) that money is going to be indirectly a fuel to keep up with that toxic relationship. But then again, my heart breaks when I think of her and her baby. What are friends for, if not for being there also in the bad times? So I am thinking about lending her this money as a “one time only” thing, because I know I will feel like a terrible person if I don’t. Do you have any advice? how can I help her, and yet avoid falling into a slippery slope?

-I.G.

Hey, so, this is a tough question. Because despite the fact that your friend, individually, is someone you love and trust, her decision to be with this guy (and have a kid with him!), means that she is now linked to him inextricably, particularly when it comes to all things financial. It’s important that you not feel badly about being wary, because you’re not just talking about your beloved friend — you’re talking about her household, which is where that money is going, and which is just as much about that awful dude as it is about her. She knew the implications of permanently attaching herself to a guy like this, and it’s not your fault that she made those choices. If her friends now have to be wary of her for their own self-preservation, that’s just a byproduct of letting an emotional typhoon into her life in such a big way.

So if you have to be direct with her when giving her this money, and very particular about the conditions of giving it, that’s not something you have to feel guilty about. If she gets angry with you for being less than blindly generous, or for having something negative to say, that’s also not your fault. Look at it this way: a friend getting with a partner like this almost always leads to a certain amount of alienation from friends and family, this just happened to be your way of getting to that tension. In some ways, money is a more cut-and-dry thing to take issue over than, say, a general feeling of “I can’t be close to you because this guy is so toxic,” which I’m certain many of her friends and family who live near her are currently experiencing.

So for the money, I would suggest one of two paths, but both with the same mentality on your end: This money, for your own sanity, should be thought of us as a gift, and not a loan. A parting gift, even, but not a loan. The chances that you are going to get this money back at all, let alone in a timely and respectful manner, are slim. And if you go into this expecting your friend (and that toxic barnacle hanging onto her) to handle this in the right way, you’re only going to drive yourself crazy. So you should think of it that way, expecting the worst and being open to the best, no matter how much you tell her it’s a loan.

Then, you can go one of two ways: you can either agree to buy her the things she needs (on Amazon or something) and have it sent to her, so that the money can only go to necessities, if you don’t want any risk that it get used for nefarious purposes by either party. Or you can just give it to her, and explain that this is a one-time deal, because of the reasons you mentioned. Explain that you very much expect to be paid back, but at this point can’t trust that you will be, for the same reasons. Whether you have to buy her things or lend her the money with a heavy disclaimer, you are going to run into some awkwardness. She is going to feel judged, and insulted, and frustrated.

But it’s important that you stick to your guns and explain to her why you are handling things the way you have to handle them, because her poor relationship choices are not your problem. You have to protect yourself and your money, and not get sucked into the trap of enabling her/him, even if that means having a tough conversation. You should help your friend in this one instance because you love her, and because it’s also not her poor baby’s fault that her parents self-sabotage. But you are not here to be the benevolent third party who keeps this messy ship afloat. Help her out, but be clear with her about the terms, and don’t feel guilty about being honest.