Is it a Loan or a Gift? // Lending Money to Friends and Family

“If you can’t trust me and the relationships I choose, we can’t be friends!” click. After a long night of phone calls with my friend, Nina, as she tried to protect herself from her fiance and as she worked her way through calling the police and filing a domestic violence report, I was left with that one line after one final phone call. Two hours before she had been in the middle of filing the report at 2 am and I was waiting up, just in case she needed consoling.

I was still living at home, had just started a new job and community college. She was in the middle of a series of messes – trying to get out of her abusive parent’s household, fighting to keep her service dog, and now this. After filing her report, I got that fateful phone call. She felt bad that her fiance was now overnighting at the station and she wanted to visit him – immediately – and apologize. I recommended she sleep on it and promised I would talk to her the next day and we would figure out her best options. To which she said what she did and promptly hung up on me.

There’s a plethora of reasons I didn’t continue to reach out to her or salvage our friendship – none of them are particularly important to this story and so I’d rather not get into them.

The thing is, though, that at that point in time, Nina owed me about $400. I had loaned her $200 cash to help get her out of her parent’s house and then another $200 via my credit card for similar reasons. I did get $200 back eventually, but she argued that I had never given her the other $200 in cash.

I know this is an extreme example, but there’s a lesson here – one I thought I knew before and definitely understood after. It’s a two-parter:

  1. Don’t part with money you can’t afford to lose and
  2. Loans to friends (and family) should be treated as a gift.

Nina was my friend and so I gifted her $400. I was lucky enough to get some of that back but the rest… well it was a gift and it’s best to keep looking at it as such. It was a testament to what I thought our friendship was at the time.

Have you ever had a “loan”  never be repaid?

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