Your Wealthy Mind

Why You should Stop Lending Money

Tagalog Version (Click Here)

“Hey ‘friend,’ can I borrow a couple thousand? I ‘promise’ to pay you back next week.” Do you find it hard to say no? Do you let people abuse you financially? Do you keep letting people borrow money from you even when you know they never pay you back? I’ve had to watch my own mother suffer through that during the early years of my life so when I saw Chinkee Tan’s video, I just HAD to write about it. Never let people take advantage of your kindness.

Three main points in Chinkee Tan’s video:
  1. A lot of people, most likely our friends and relatives, love to borrow money (“Money is very relative. The more money you have, the more relatives you have.”). The problem happens when, as Chinkee Tan said, “they learn how to borrow but they don’t know how to pay.” Worse, when we ask for our money back they are the ones who get mad (“How DARE you ask me to pay you back!”). While it is fine to lend money to those who need it, there are people who borrow money not because of necessity but because they want to buy luxuries.
  1. If some people notice that they can abuse your kindness, they WILL do it. I personally think that they do it unknowingly. Very few people intentionally try to make you miserable, but a LOT of people have the mindset of “Hey, thanks for spending some time with me! Can I ‘borrow’ $50 as well? Thanks ‘friend’!”
  1. Although we think we’re helping by lending money to everyone who asks, we’re NOT. We’re simply supporting bad habits. Chinkee Tan explained that “we are teaching them to become lazy.” They won’t work harder to earn a better livelihood and they will continue their bad lifestyle simply because they believe they can always have a piece of YOUR PAYCHECK. You have to learn how to say No. Although you might think you’re a bad person in the short term, you’re actually helping them become more self-reliant in the long run. You have to ask yourself, and this is especially true for OFWs (overseas Filipino workers), how much will you work and suffer in order to earn and send money to people you KNOW are going to WASTE it? Where are your boundaries? When will you say no to people who abuse you financially?

Like I said, that happened to my mother a lot. She came from a poor family in a rural town and, after graduating school, she and my father both worked hard to earn a nice middle-class life for me and my little brother. Because of that, those from our area see our family’s “middle class” lifestyle as “living filthy rich.” Since my mother was very kind and self-sacrificing, a lot of her friends and relatives from the province habitually keep borrowing money from her and conveniently forget to pay her back.

Years of kindness later, she got more in return…

…MORE people borrowing money and abusing her kindness. To add salt to the wounds, they also love spreading negative gossip about her (I won’t go into details, but we’ve heard terrible things from our other neighbors). Eventually, nearly 25 or 30 years too late, she’s decided that she had enough so she cut off several toxic people in her life. As a result, our family lived in peace and relative prosperity.

How do you say no to those who love your money? Check out GameOfWealthOnline’s Post here:
5 Ways to Say NO to Utang Addicts Who Can’t Take No for an Answer

I personally use a different strategy though and for this method, you’ll need to have solid body language and conviction. If they sense you can be “guilt-tripped,” they’ll keep trying until you give in to their demands. In any case, when somebody asks me for money, I just laugh as if they are telling a joke and say “sorry, I can’t right now.” If they ask again I say “Haha! Sorry, I really can’t. Maybe ask someone else?” Eventually, they’ll get the point.

Other times I use a disappointed body language instead. Imagine somebody asked you to watch a movie on a certain day but you cannot attend since you have a family reunion that you cannot miss: “Oh no! Sorry, but I can’t lend you any money right now.”

Do either of those techniques often enough and financial abusers will stop aiming for you. When they know you can’t be exploited, so they’ll stop trying.

I’m still waiting for a chance to do number four of GameOfWealthOnline’s strategy though, but instead of a promissory note, I’ll ask for collateral. “I’ll lend you this amount, but if you don’t pay it back with interest on this specified date I’ll have the deed to your house/car/cellphone.” (You need to make this legally binding.) They’ll likely back down if they sense you’re serious. If they say it seems like too much, tell them that it will only be a problem IF THEY HAVE NO INTENTION OF PAYING YOU BACK.


Block Guilt-trippers – Give yourself some GOOD MOTIVATION:
  1. Like what Chinkee Tan said, it’s ok to help those who are really in need. Do it for good people, but NEVER for habitual liars (you know who they are). Set your boundaries against them. Besides, if they really needed money, they can apply for personal loans from banks (by the way, never co-sign their loans as they’ll likely default on it and force YOU to pay).
  1. If you keep lending money to those who never repay, you’re only teaching them to be lazy. This is a lesson I’ve also read about in Stanley and Danko’s “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy”. Adults who receive money from their parents (also called “economic outpatient care”) tend to be underachievers simply because they never have the motivation to do better. Why should they work harder to earn a better livelihood when they can simply ask YOU for extra money?
  1. You’re encouraging crab mentality (“crabs in a bucket”). What you may not adequately realize is that every single time you give money to those who waste it, YOUR FAMILY LOSES. You work hard to provide for your family, but like crabs they are pulling your entire family down for their own comfort! I still remember the times me and my little brother had to make do with so little because our mother gave money to those who guilt-tripped and “borrowed (stole)” money from her. We had to eat spam and hotdogs every day, but her “friends” and their children got to wear branded clothing and jewelry.

Before you lend money, ask yourself:
  1. Will it be repaid? You spend hours of your life that you’ll NEVER get back in order to go to work and earn money. Imagine yourself working overtime at the office for three weeks, and then your “friend” just borrowed what you earned (he’ll pay you back – “promise!”) to buy beer and cigarettes.
  1. Are you funding bad habits? Again, I agree with Chinkee Tan when he said it’s alright to lend or give money to those who need it, like orphans, victims of terrible accidents, etc. but it’s NOT alright to fund other people’s luxuries and bad habits. You’re not helping drug addicts, compulsive gamblers, and habitual money-wasters by giving them more money to buy drugs, gamble, or spend in senseless luxury shopping trips.
  1. Who will LOSE? I can’t stress this point enough: You worked hard to provide for your family… but your blood, sweat, and tears are taken and WASTED by somebody who did not even EARN it. Just imagine: Your home could have been nicer, you could be eating better and more nutritious food, and your children could have attended higher quality schools IF ONLY all the people who borrowed money from you simply paid you back! You could have paid for your parents’ hospital bills… but your “friend” or your other relative still has your money! I’m not suggesting that you blame them for all your troubles, but that you treat them as an expensive lesson that taught you to stop lending money thoughtlessly.

Again, let me repeat that it’s good to help those who actually NEED help, but the entire point of this article is that you should stop enabling those people who abuse your kindness.

If there’s one lesson that I’d like you to learn from this is that it’s better to teach people to become self-reliant than to keep them lazy and dependent on your goodwill. This is a similar application of the proverb, “give a man a fish, and he’ll eat for a day, but teach a man how to fish and he’ll eat for a lifetime.” Give someone some extra money and they’ll spend it in a day. TEACH them how to earn extra money and they’ll learn to bring greater value in the world.


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