If You Want to Stay Friends, Follow These Rules For Borrowing and Lending Money

If You Want to Stay Friends, Follow These Rules For Borrowing and Lending Money

There is a fight over 50 euros on Below Deck Mediterranean ... and they're all broken up about it. 

By Marianne Garvey
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Conrad Empson Breaks Up with Hannah Ferrier

Hannah Ferrier and Conrad Empson are having money troubles — with each other.

The Below Deck Mediterranean exes are fighting about her owing him 50 euros, which is about $58 U.S. dollars. Conrad lent her the money, and is expecting it back. Just one problem, Hannah’s mad he is asking her to pay back (what she considers) to be such a small amount of money.

Well, that’s infuriating — and even led to their breakup — but who's really in the wrong? 

Here is what national etiquette expert Diane Gottsman has to say about this big load of nonsense.

“Anytime you take out a loan, the assumption is you plan to pay the lender back in a prompt fashion,” she tells Personal Space. “You are even obligated to pay back a small amount unless your friend or family member tells you not to worry about it. Out of goodwill, you should still consider paying it back. Otherwise it’s called a gift.”

Good point. (Was it your birthday, Hannah? We think not.)

“When lending someone money, regardless of the amount, it’s always a risk,” Gottsman adds. “First of all, you should be able to afford to lose, or live without, the amount of money you are loaning. Think of a loan as a donation. When a family member or friend loans money for a new car, a down payment on a house or even a pair of shoes, the hope and assumption is that the borrower will pay them back, but he reality is… there are no guarantees.”

Gottsman says that unlike a lending institution that requires a contract, timeline of payments and penalties, “friends and family usually have a looser and more lenient repayment policy.” “Perhaps a handshake or even something in writing that may or may not hold up in court. (Unless you want to go on Judge Judy and try your luck)” she says.

On the other hand, she says, there are many responsible people who borrow money for a good reason and pay it back in a timely manner.

“But, if the borrower does not return a scarf or a pair of jeans promptly, you have little hope they are going to return the ten dollars, hundred dollars or thousand dollars they asked you to front them,” she says.

If you do need to ask for money, the person asking should be upfront and honest.

“If you need it to pay for food or rent, let them know. But if you show up wearing a brand new outfit or driving a new car, you can feel certain the loaner is going to feel taken advantage of. Also, if you have not paid back the loan, everything you purchase moving forward and every vacation you take is under scrutiny by the person who lent you the money. It’s part of the price you pay when asking someone for money,” Gottsman says.

If you are the person who is not getting paid back, “don’t hesitate to ask them when you can expect a payment. Or, when you can anticipate the full amount will be paid in full.”

“It’s never fun to chase after someone once you have lent them money,” Gottsman says. “Understand they probably have asked you because they were having difficulty getting it from someplace else. Bottom line, only lend what you are comfortable potentially losing.”

Douglas Boneparth, financial advisor and founder of Bone Fide Wealth in New York City, says “not paying back your friend is a sign of disrespect, regardless of the amount you borrowed.”

“What does it say about your friendship and the respect you have for that friendship when you are unable to meet your promises?” he asks. “Think about it like this, if you borrowed that money from a bank, they would have recourse over the amount you borrowed. So, don’t disrespect the fact that your friends are doing you a solid.”

If you do borrow money, be as transparent as possible, he says.

“It’s worth explaining why you need the money. Your friends will appreciate how it is you are helping them and that you trust them enough to share that information with you. Being shady or not providing a reason doesn’t help build trust or offer much confidence,” he says.

Not getting paid back?

“I’d first pull my friend aside as ask if everything is okay. If things have worsened you might want to help them in other ways if possible. It’s not unreasonable to ask for an explanation. Perhaps there’s a really understandable reason as to why you didn’t get paid back. If the borrower is avoiding you or simply refusing to pay you back, it might call into question the nature of your friendship. Perhaps you were not that good of friends to begin with.”

Or, that strong of a couple.

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