Should you lend money to your boyfriend? It depends. Here are five things to think about when he asks for money and you aren’t sure if you should lend it to him.
These tips are inspired by a reader, who says:
“My 65 year old boyfriend is preparing to retire. Part of his preparation will be filing for bankruptcy and walking away from his home/mortgage,” says B. on Signs It’s Not Smart to Loan Money to Someone You’re Close to. “He owns a really nice motorcycle that we both enjoy. He has asked me to buy his bike in order to protect it from the bankruptcy. This purchase would equate to me paying him $10,000 and him then making payments of $250 a month. We have know each other for about eight months and I like him a lot, but this request has made me uncomfortable.”
I absolutely think she should trust her gut and keep her money safe and sound! Here are a few tips for girlfriends in the same situation…
What to Do When Your Boyfriend Asks for Money…
In most causes, I think girlfriends should always say no when their boyfriends ask to borrow money – especially when the boyfriend is financially bankrupt or has a bad credit rating! He does not know how to manage his money.
His financial mismanagement does not mean he’s a bad person or that you should stop dating him. But, it does mean that you should keep your finances separate from his. Even if you get married, you need to make sure you are financially independent and that you retain your own good credit rating.
Despite my solid gold advice, many girlfriends will say yes when their boyfriends ask to borrow money. These tips are for them…
Make sure you’re not in debt and can afford to lend the money
Here’s why B.’s boyfriend asked to borrow money, and her financial situation:
“He is a very generous person, but he is not good with money as evidenced by his need to file for bankruptcy at this stage of the game. I’m retired and on a fixed income, this is a lot of money for me. I currently carry $11,000 in debt that I am currently trying very hard to pay down. I also have a savings account with about $1,200 in it at present. Though I do have stock I could sell if need be, I don’t feel that is very wise of me to sell it at this time.”
Girlfriends, you should never, ever loan money to your boyfriends when you’re already in debt!
Do not put your financial future at risk because your boyfriend can’t manage his money. You can love him with all your heart, but keep your money in your savings account, stocks, and retirement investments.
Separate business from pleasure – because a financial loan is business
“My problem is that I think the world of him, but his mismanagement of his own money make me very uncomfortable in trusting his ability to repay me. Do I go with my gut feeling? How would I explain my reasoning to him without hurting our relationship?”
Yes, you go with your gut feeling. You know it’s not smart to “buy” your boyfriend’s motorcycle and hope he pays it back! It’s not a financial investment – it’s a mistake that you will regret.
Tell him the truth – you can’t afford to lend him money
This is what you say when your gut is telling you to say no when your boyfriend asks to borrow money:
“I think the world of you and I’m happy in our relationship, but I just can’t afford to lend you money. I’m in debt, I have mortgage payments, I don’t earn much money, and I don’t know what my financial future holds. I wish I could help you, but I don’t have the money you need.”
If you’re worried about saying no to him, read How to Get Your Money Back After Loaning to People You Trust. It’ll help you see that saying no and being strong now is way, way smarter than having to chase him to get your money back later.
If you say yes when your boyfriend asks to borrow money, then…
If you lend your boyfriend money – such as buying his motorcycle and getting paid back over a few years – then you need to make a contract and get him to sign it. The contract needs to make the terms of the loan clear: how much money your boyfriend borrows, when and how he’ll pay it back, the interest rate, and the date that all the money should be repaid.
To learn more about how to draw up a loan contract, read Should You Lend Money to Family Members? Warnings and Tips.
Do not expect to get your money back
If anyone asks to borrow money from you – boyfriend or not – the smartest thing for you to do (besides say “no”!) is to let go of the money forever. The reason the person needs to borrow money is likely because he can’t manage his finances. This is a problem that doesn’t disappear overnight.
When you lend money to someone you love, you need to expect never to see it again. That way, your relationship will stay loving and you won’t resent your boyfriend when he gives you excuse after excuse for not repaying the money he borrowed.
If you’re scared to say no, here are a few tips on building self-confidence in your relationship.
What do you think about these tips for when boyfriends ask girlfriends if they can borrow money? Comments welcome below…