Should You EVER Lend Money to Your Partner?

The golden rule of lending money to friends, family or a partner and how to navigate the awkward those money conversations.

 

At 25 years old, Martin Dasko had his financial life in order – until his love life got in the way.

“I was dating a girl who was a student. She didn’t have enough money to cover rent and living expenses because she lost her job. “

After sending her cash online, they agreed she would pay back the loan when she got a new job. No additional terms or conditions specified.

“It was a huge mistake. I just felt bad for her and was uncomfortable because I had to pressure her to find a job rather quickly.”

That pressure wasn’t good for him, her or the relationship.

“It took me a long time to get paid back.”

 

But the real takeaway?

Money changes everything in a relationship. It’s a confusing topic that I’ve yet to master. Maybe one day…”

In the meantime, Dasko won’t be lending money to a significant other any time soon.

 

But should you?

Is lending money to your boyfriend or girlfriend ever a good idea?

 

And conversely, if the person you love is asking you to help them out in a time of need, is saying no smart, or selfish?

 

Here’s the answer: Yes. And no. To both.

 

Are you okay if you lose the money?

 

Any time I consider lending money to anyone, this is the first thing I consider.

 

Never lend someone more money than you’re prepared to lose.Click To Tweet

 

“But my situation is different. I’m 150% sure they’ll pay me back! They’re just waiting on their inheritance / new job / tax return / lottery ticket.”

I know, sometimes the situation looks ironclad.

You’re madly in love, your significant other is an honest and trustworthy person, and the circumstances of the loan are such that you are confident you’re going to get paid back ASAP.

Even so, the rule applies.

Bad things happen. Zombie apocalypse. Spontaneous combustion. People end up being different than we thought.

Before you sign the check or fire up Venmo, ask yourself: If I lose this money, will I be okay?

 

Get a plan and get it in writing.

 

The key to loaning (or borrowing) money is to have a clear understanding of how much money is being lent, for what purposes, and when it will be repaid.

I don’t just mean you should have a clear understanding, I mean both parties need to be clear on all of the above.

Too often, we avoid having open discussions about money because we assume that we’re on the same page as the other person. But we’re not. And by the time we figure that out, it’s too late.

So make a plan that both parties understand and agree to – then get it in writing.

Here’s a detailed guide on writing a promissory note.

If you don’t want to make it so official, a simple exchange of emails laying out your plan is sufficient – just don’t go purging your inbox until you’ve been repaid in full!

 

Be prepared for bad feelings.

 

Have you ever had to ask for money? I have. It feels horrible.

It’s embarrassing and awkward and the worst part is that the person being asked is probably having the same feelings.

Having to borrow money makes people feel ashamed. And defensive. And resentful. And helpless. And like they totally suck at money.

And having to lend money makes people feel awkward. And resentful. And defensive. And uncomfortable.

There is absolutely no way around these feelings (including alcohol, though it definitely helps…) so prepare yourself and prepare your partner. The more open and honest you can keep the conversation, the better off you’ll both be.

 

Ps. This goes for ALL your money convos! According to a recent study, 78% of couples who talk about money at least once a week report higher levels of happiness in their relationship.

Financial discussions are a vehicle for getting on the same page. They help build the foundation for a happy relationship long-term.

 

Do it for the right reasons.

 

A few months ago, I lent a friend money. It was about $300. She didn’t ask – I offered. She was in a really bad situation and really needed the money.

After I had given it to her, I checked to see if I was having any bad feelings.

Anxiety about getting paid back. Awkwardness. There was nothing. I was so happy that I could help her, nothing else mattered.

The ability to loan a loved one money out of true generosity is a wonderful thing.

But too often I see people loaning money for the wrong reasons.

 

  • To have a say in the borrower’s life decisions.
  • Because they feel like they can’t say no.
  • So that the borrower owes them a favor.
  • To “buy” gratitude.

 

If you’re considering lending money to your boyfriend or girlfriend so that you can get the appreciation, devotion or gratitude you think you deserve, DON’T.

 

When you loan money, don’t expect gratitude. Expect your money back!Click To Tweet

 

 

Love your partner. But don’t make THEM your money plan. Take ownership of your $$$ this New Year by joining the FREE 7-day Cash Confidence Challenge – and learn to afford your life on YOUR terms.

 

10 responses to “Should You EVER Lend Money to Your Partner?

  1. So much insight here. Lending money can be a touchy subject, but I think you hit the nail on the head that no matter who you are lending money to, you need to agree to terms.

    I have lent money to a boyfriend, but we openly discussed money so I had no awkwardness or hesitation in asking for money back. If you don’t regularly talk about money or feel uncomfortable even bringing it up, I personally wouldn’t recommend giving someone a loan.

    Great article!

    1. So glad you have a success story to share. Often, those lending experiences turn into nightmares, but good to recognize how much of a difference transparency and openness in the financial dialogue can make!

  2. The first rule, never lending more than your willing to lose, is fantastic advice. Advice than can be applied towards entertainment like gambling and even risky investments! Be prepared to lose money to gain something potentially much better (in this case, helping a friend).

    1. “Gift it or nothing” is definitely a solid policy. And helps you avoid a lot of the potentially awkward and relationship damaging situations.

    1. I like the idea of paying for the item directly. That way you can make sure funds are getting directed appropriately, though there could be some push back/awkwardness if it’s something like rent.

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