NDSU Extension Service - Ramsey County


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Dollars and Friends

Dollars and Friends


            Mixing friendship and money can test even the strongest bond. Lending a friend a few bucks for coffee is usually not a big decision. But for a sum that feels significant to you, ask your friend for time to think through the decision.

            If, after careful consideration, you’re still uneasy about lending the money, phrase your refusal politely but without leaving room for negotiation or delving into the details of why you’re saying no. Stating, “It’s my personal policy” gives a firm answer but leaves the door to friendship open.

            If you decide to lend the money, insist that you both sign a promissory note. Explain to your friend that clarifying the terms of repayment on paper will help preserve your friendship. Every time a payment is made, keep track either on the back of the agreement and make sure both parties have the exact information when making payments..

            What if I am purchasing tickets or other services for a group of friends? Before clicking “buy,” calculate the amount each member of your group will owe (including fees and taxes) and get everyone’s go-ahead to make the purchase. Once you’ve ordered the tickets, forward your receipt and tell the group when and how you would like to be repaid  cash or check the day of the concert for example.    

            Being that you can't predict what will happen in the future, you should always keep in mind that you may not get your money back. You may have to take a loss if your friend is reluctant or cannot pay you back. If the amount was large enough, you can take legal action as a last resort. In this case, you may want to consider additional fees such as court costs and attorney fees. Not only that, your friendship will most likely be in jeopardy.

            And, the answer is always “No” to loaning any additional money until the entire amount of the initial loan is paid off. Follow these tips and you might be able to help out a friend without risking your relationship.

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