Dave Says: Help Friends And Relatives With Gifts, Not Loans

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Posted: Sep 20, 2018 11:54 AM
Dave Says: Help Friends And Relatives With Gifts, Not Loans

Dear Dave,

Recently, I loaned some money to a good friend. He’s going to help me with a big home project over the next few weekends, so do you think I should pay him for the work or forgive the debt?

Marvin

Dear Marvin,

First, I don’t recommend loaning money to friends or family. Once in a while, things may work out and everyone ends up happy. But in most cases, it changes the dynamic of the relationship. The Bible says the borrower is a slave to the lender, and there’s a lot of truth in that — financially and emotionally. 

The big question is whether you’ve already agreed to pay him for the work. Another consideration is how he views the situation. He may be looking at this as just helping a buddy, and he still owes the money.

Ask him what his expectations are before you guys start the job. Just talk to him, and figure out what seems fair to you both. If you’ve already agreed on a certain amount, and the value of the work is close to what you loaned him, you might discuss the idea of paying back the debt that way.

But in the future, if someone close to you really needs financial help — and you’re not enabling bad behavior in the process — just make the money a gift.

—Dave