Why I Give Money, but Never Lend It

You have probably had friends or family members ask if you can lend them money. When that happens, how do you respond? This post is about how and why I have chosen to do so. It should also be clear from the title that this post is not about giving to charitable organizations, but to individuals. I will illustrate my rationale with four stories.

1. Many years ago, when my family and I were part of a large church, one of my friends there asked me if he could borrow $50 to buy his wife something “nice” for Valentine’s Day. I said that I would give him the money and that he wouldn’t have to pay me back. He didn’t like that response, so we went back and forth, with him saying he would pay me back and me saying that I wouldn’t accept repayment. Finally, because of his insistence, I gave in; he thanked me and said that he would pay me back the following week. Two weeks later, I saw him, and he said that he wasn’t able to repay me just yet, but that he would do it “soon.” A few weeks later, the same thing happened; even though I didn’t bring up the matter of the $50, he did. However, he was clearly uncomfortable talking with me. After some time, he and his family left our church, but I eventually ran into him at a store. We greeted each other and exchanged polite conversation, but no mention was made of the $50.

2. A few years after that, another friend shared in our men’s group at church that over a period of time, he had lent someone more than $3000. My friend was visibly upset as he shared that his friend had promised to pay him back, but so far, he had received nothing. He wanted counsel, so after asking him some questions, the rest of us advised him to talk with the borrower and work out a specific repayment plan. Thankfully, he did just that, and a few weeks later, he shared with us that his friend had begun to repay him.

3. One day around that same time when I got home from work, my wife told me that the husband of her good friend had called and in desperation asked if we could lend him $1000 because their utilities were about to be shut off. My wife said we couldn’t do that because we were rather financially tight that summer, which was true. What my wife didn’t add in her conversation with him was that we wouldn’t have either given or lent him anything anyway because he was irresponsible with money; it was always feast or famine with him. We found out a short time later that he had found another way to avoid having his family’s utilities shut off.

4. A few years after that, yet another friend talked to me and my wife about his brother, whose wife needed professional psychiatric care at a facility. He asked us if we would be willing to help with the cost of that. After clarifying some things, we said that we would be willing to help, but we made it clear that we would be giving the money, not lending it. The only thing we asked was that he keep us updated on his sister-in-law’s condition and situation; he very gratefully accepted our help.

The first two stories illustrate that when you lend money to an individual, it can put a severe strain on the relationship if that borrower doesn’t repay you. The third story simply illustrates that my wife and I don’t give to someone that we know is irresponsible with money. I should add that my wife didn’t even have to ask me about it because she already knew what my response would be, and she was in agreement with it. The fourth story illustrates the blessing that we received when we gave, with no strings attached. I suppose some might say that asking our friend to keep us updated on his sister-in-law’s condition and situation was a “string,” but I disagree, especially since we gave more later.

Somewhat related to this matter of giving vs. lending is cosigning a loan, which means that if the original borrower is unable to pay it back, then you as the cosigner become responsible for repayment. In cosigning, then, you take two risks: One is that if you also become unable to pay back the loan, you’ll be in financial trouble; the other is that your relationship with the original borrower will be negatively affected. My wife and I decided that we would never cosign for anyone, even an immediate family member; what we have done, however, is to give money to help with school expenses or a down payment.

I should add that the Bible does not forbid lending money, either in the Old Testament or the New Testament. However, here is a proverb that has influenced me in my thinking: “The rich rule over the poor, and the borrower is servant to the lender.” (Proverbs 22:7) I certainly don’t want to be anyone’s “servant,” meaning to be indebted to anyone. However, I don’t want anyone else to be my “servant,” either.

To be clear, if you lend to an individual friend or family member, I’m not saying that you are doing anything wrong. Neither am I saying that my way is the only way or even the best way. I’m simply saying that lending has the potential to put a strain on the relationship. In my experience, giving has not put a strain on my relationships.

17 thoughts on “Why I Give Money, but Never Lend It

  1. Are we on the same page, Keith! I’ve had similar experiences, even had people avoid eye contact when they see me in public.
    A coworker’s family was about to be evicted from their home, because her husband had been injured and his disability benefits had not kicked in yet. The benefits had been approved, the landlord just wasn’t willing to wait. I insisted on giving it, not lending it, but since then the family has repaid me in other ways that money can’t buy. Long story, but short version: they were there for me when I needed them. ❀

    Liked by 1 person

  2. Keith, I have the same opinion as you. Wow, this is timely.

    I just had this conversation with a grandchild, a few days ago, who made some unwise financial choices and got themselves into a difficult spot. I listened, questioned, used discernment, and it was easy to see if I gave or loaned money it would have enabled a cycle of poor financial management.

    I did offer some ideas by sharing examples from my life of what I’ve done or would do in a similar situation (mostly by way of prevention). His immediate need was preventable by living according to sound biblical principles of having emergency reserves set aside, and living within one’s means [a budget]. Unfortunately, the general populace is not taught essential money management these days. We talked about living on a budget and this grandchild admitted to, “not being good with money” and that they would like to learn. I offered to help lay out a budget and walk him through Dave Ramsey’s basic budgeting principles to begin a debt-free habit. He said he would like that. I’m praying there is genuine follow-through.

    The initial “urgent crisis” that led to him asking me for $200 is near resolution. If I had loaned or given money, in this instance I believe it would have “stolen” important life lessons that the temporary stress and problem-solving choices gave him. I believe those uncomfortable or even painful decisions will be unforgettable whereas a gift or loan would have negated the life lessons and/or possibly tainted the relationship for years to come.

    God bless you for sharing this!

    Liked by 1 person

    1. Manette, I’m thankful you chose not to “help” your grandchild by either giving or lending him money. As you say, by doing so, you would have “stolen” the opportunity for him to learn important life lessons. I just prayed that he will follow through regarding the help that you have offered.

      As you say, the general populace is not taught anything about basic money management these days. Back in the aughts, my family and I were part of a church with a strong pre-marital program; a premarital couple would be assigned a mentoring couple (my wife and I were one such couple) to take them through an 8-part curriculum, including financial management. The couple had to make a budget, which was great because many had never done so before.

      Thank you for your thoughtful comment, and the Lord bless you!

      Liked by 1 person

  3. Hi Keith, your first story was quite sad actually. Your friend and his family stopped coming to your church because he was unable to repay the amount that he borrowed from you. I just hoped that he did not lose his faith in the Lord because of that minor incident.

    Liked by 1 person

    1. Anthony, I remember wondering at the time if his not paying me back had anything to do with his family’s leaving our church. I know that he and his wife were having some issues, I think at least partly having to do with his being on his second marriage; my guess is that somehow played a role, probably a more significant one, in their leaving. If I remember correctly, when I ran into him months later, he said that they had switched to another church. Anyway, it was sad because he wouldn’t accept the $50 as a gift in the first place, which ultimately poisoned our relationship.

      Liked by 1 person

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