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    • MSE Martin
    • By MSE Martin 6th Mar 07, 4:10 PM
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    MSE Martin
    Should Thelma lend Louise money?
    • #1
    • 6th Mar 07, 4:10 PM
    Should Thelma lend Louise money? 6th Mar 07 at 4:10 PM
    Here's this week's hypothetical situation for you to cogitate on:

    Should Thelma lend Louise money?

    Thelma's best friend since childhood, Louise, has always been terrible with cash; and now she's got into serious debt and is in danger of losing her home. She's asked Thelma for a loan of £10,000. Thelma's very affluent and can afford to lend without a problem, and she would hardly notice even if she lost this huge amount. They've always been through thick and thin together and supported each other in everything. Should Thelma lend Louise the cash?

    Similar but not the same as a past one...

    You may think this is very similar to 'should Jane lend her friend the cash', well it’s more than just the names that have changed - Jane could afford to lend the money, but couldn't afford to lose it, Thelma can – does that make a difference?


    Click reply to enter the money moral maze (please remember, be polite to other MoneySavers, even if you disagree with them).

    Previous MMDs: Should Monica go out with Bill for his money?and Should Madge flog Harold’s stuff on eBay?

    Last edited by MSE Martin; 06-03-2007 at 7:06 PM.
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.

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Page 1
    • reehsetin
    • By reehsetin 6th Mar 07, 4:13 PM
    • 4,818 Posts
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    • #2
    • 6th Mar 07, 4:13 PM
    • #2
    • 6th Mar 07, 4:13 PM
    if she can afford to loose the money and not be bitter about the money if its not repaid then yes
    otherwise help her find a way to manage her own money and remind her that she always has a roof to share
    Yes Your Dukeiness
  • binman
    • #3
    • 6th Mar 07, 7:11 PM
    • #3
    • 6th Mar 07, 7:11 PM
    she can afford to lend and lose, then she should lend to help her friend but she should (for her friends sake) ensure that this is not treated as a 'get out of jail card' and that her friend is fully aware of the commitment she is engaging in with her friend.

    Assuming that her firnd isnt going to want to make any interest, they should sit down and agree (before the cash exchanges hands) how it will be repaid.

    maybe just regular monthly payments, maybe with flexibility, but she needs to ensure her firned is fully commited, and stays that way, to repaying her, otherwise she may find her friend getting into further debt with something else.

    Even with if she can afford to lose it, she should have a commitment to heloping her friend if she lends the money.
    • Tustastic
    • By Tustastic 6th Mar 07, 7:31 PM
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    • #4
    • 6th Mar 07, 7:31 PM
    • #4
    • 6th Mar 07, 7:31 PM
    Thelma can afford to lose the money, but can she afford to lose Louise's friendship? It's very common for people who borrow money and can't afford to pay it back, not only to avoid the friends who loaned them the money, but even to take a strong dislike to them.
    In Thelma's place, I would tell Louise the £10K is a gift, not a loan, and that in return she should agree to join MSE and at least read the DFW boards every day. Might just bring her LBM a few days quicker.
    Hi, we’ve had to remove your signature. If you’re not sure why please read the forum rules or email the forum team if you’re still unsure - MoneySavingExpert Forum Team
    • anewman
    • By anewman 6th Mar 07, 10:08 PM
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    • #5
    • 6th Mar 07, 10:08 PM
    • #5
    • 6th Mar 07, 10:08 PM
    I think the key really is in whether Thelma could afford to lose £10k and would be happy to effectively almost give the money away. As a wealthy woman, this is possible, but in today's society of greed unlikely.

    I guess there are cases in which lending money is ok but my personal experience is to never lend anyone more money than you'd want to lose, as the first time I lent money to someone the promises to pay back soon were not acted upon and I only ever got a quarter of the money back.
  • Hilsax
    • #6
    • 7th Mar 07, 6:25 AM
    Been there, done that
    • #6
    • 7th Mar 07, 6:25 AM
    I'd say absolutely not. I've done it and am still regretting it.

    If you can afford it, GIVE someone the money they need, but never lend to friends. Cynical? Moi?


    • rmg1
    • By rmg1 7th Mar 07, 9:12 AM
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    • #7
    • 7th Mar 07, 9:12 AM
    • #7
    • 7th Mar 07, 9:12 AM
    I agree with binman.
    Thelma could lend Louise the money if she could spare it (and obviously can) but it shouldn't be treated as a gift.
    There should be a repayment plan in place before anything else is done.
    Louise should also think long and hard about her finances and where the money is going. It might also be helpful if she can write down all the spending she does and work out what she can do without.
    Assuming Louise has a mortgage, it might be better to clear her debts with this £10K, sell the the house and get something smaller (circumstances permitting).
    Then again, if Louise already has a mortgage, maybe a remortgage would be better. The terms are fixed from the word go (apart from the interest changes) and you don't risk a friendship.
    Flagellation, necrophilia and bestiality - Am I flogging a dead horse?

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    • Enterprise 1701C
    • By Enterprise 1701C 7th Mar 07, 9:37 AM
    • 21,193 Posts
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    Enterprise 1701C
    • #8
    • 7th Mar 07, 9:37 AM
    • #8
    • 7th Mar 07, 9:37 AM
    I personally would lend the money but only if

    a) a repayment plan is in place, however small;

    b) the friend promises to get financial advice from somewhere like the CAB, and I would go with her to make sure of this and so someone else is there to take notice of what is being said; and this would make sure that she fulfilled her second to last part of the bargain:

    c) an absolute promise to take better care of finances in the form of something like a home accountancy program to ensure that she NEVER got this far into deblt again and last but not least:

    d) she signed up to this website!
    What is this life if, full of care, we have no time to stand and stare
    • Idiophreak
    • By Idiophreak 7th Mar 07, 12:11 PM
    • 11,636 Posts
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    • #9
    • 7th Mar 07, 12:11 PM
    • #9
    • 7th Mar 07, 12:11 PM
    If my best friend, since childhood, asked me for the money, really needed it and I didn't, I'd hand it over without a second thought.

    So what if they don't repay me in money? My friends' happiness is worth more than cash.
  • laney365
    I lent my childhood friend money but all the time it was owing, she felt that she had to explain her circumstances to me. She paid the money back and we remain friends but I get the feeling something has changed. Its a great shame.
    • blackcateddie
    • By blackcateddie 7th Mar 07, 1:39 PM
    • 357 Posts
    • 206 Thanks
    If she felt able to ask for the money then surely this is about friendship rather than money - there's no point having loads of money but no friends.

    My family have helped me out in times past and it was the one way my mother could keep control over my life - I would have much rather borrowed from somone with no strings attached. Even now I can't ask my parents for anyhting without thinking that there will be a catch if they agree.
    Better to let the money go without forcing your friend into 'debt rehab' and stay friends if you value that friendship enough.
    • Crabman
    • By Crabman 7th Mar 07, 3:01 PM
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    Perhaps if she lends the 10k but in a 'Dragon's Den' style, assists her not-so-money-wise friend to economise and get the cash flow situation sorted. If she's just given 10k it's going to go straight into the black hole of debt - what Louise needs is some help with organising her finances. Throwing money alone isn't going to help...
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    • Lady E
    • By Lady E 7th Mar 07, 4:22 PM
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    Lady E
    The money should be lent on the basis that if the tables were turned would the other person do it . Friendship is not about repayment plans etc etc it is about being there for someone no matter what . The times in your life when you have a crisis is the time when you discover who your true friends are, the ones you can can ring at 2am in the morning , the ones who will cancel their holiday to be with you and yes , the ones who will give you money to bail you out. What you decide to do about your debt is for you to decide .

    I am running for cover now .
  • ColourMeHappy
    I live with someone with 15K debts on credit cards. It never made any difference how much money I bunged her way (about 8K over the last year and a half) as she almost relies on her credit cards to provide a 'lifes good because I can still afford to treat myself' facade. Reality, because I can still afford the repayments.

    Help/advice in saving money is very unwelcome as it dispells the no-problem illusion which will mean she has to face the fact that there is a problem.

    Consequently, I came to the conclusion some time ago that the best thing I can do is let her get in trouble but make sure I'm there when the poo hits the fan. Anything else is just postponing the inevitable giving her less time in the end to recover financially and emotionally.

    I also have a friend who has been made bankrupt with £40K over card debts. He's not happy about the situation he's in now especially as one or two card companies took to harrasing his mum for repayments (totally illegal by the way). However, he has never made any bones about the fact that it was an important an necessary lesson to learn. He also sleeps a damn site better at nights.

    Bottom line. Don't lend the money, explain your decision, ride out the bad feeling, live with the guilt and make sure you are there for primarily emotional support afterwards. This is especially important as the money problems are only an indication of an emotional issue that is about to surface big time.

    Nearly forgot, I've also done the childhood friend thing two years ago. Only £500 with tiny repayments. This resulted in a ton of lies and ridiculous excuses. This ultimately affected the friendship and ended very messily. Hence the no strings attached attitute when I helped my flat mate.
    Last edited by ColourMeHappy; 07-03-2007 at 7:15 PM.
    • JayD
    • By JayD 7th Mar 07, 8:12 PM
    • 529 Posts
    • 332 Thanks
    My mum always said, 'never lend what you can't afford to lose'. I agree with that. They are friends who have supported each other through everything. Hopefully that friendship would survive both the possiblility of feeling (or wanting) eternal gratitude and the possibility that the debt may never be repaid. For Louise's sense of dignity, it probably should be an open ended loan, with no time scale for repayment but I think that Thelma should think of it as a gift to help her friend out. That said, I guess the short answer would be, I believe Thelma should lend Louise the money
  • Thumbellina
    If she can really afford it she should just give it to her - as a one time only no strings attached gift. If Louise fritters it away that's on her head. It's her money now and Thelma should let her do with it what she will. A real friendship should transcend money, and if either of them find it difficult they should just do nothing in the first place.

    Of course if Thelma is affluent through hard work and judgement rather than luck she could offer to help Louise with a spending plan, but only if it were unrelated to any gifts or loans - otherwise it could be considered patronising.
    • Mics_chick
    • By Mics_chick 7th Mar 07, 10:44 PM
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    Although Thelma can afford to "lose" the cash she should only lend it on the proviso that Louise is completely open and honest with her and allows her to help her change her bad money habits, otherwise she might be used as Louise's permanent stopgap and in an indirect way encourage her to spend even more money...
    You should never call somebody else a nerd or geek because everybody (even YOU !!!) is an
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    • Ebenezer_Screwj
    • By Ebenezer_Screwj 8th Mar 07, 7:08 AM
    • 427 Posts
    • 230 Thanks
    No !
    People who can afford to lose a large sum of money would seldom take an unacceptable risk with it and Louise is exactly that risk. She is presumably a grown woman with all her faculties and knows that debts have to be repaid. Thelma should tell her that she's on her own with this one and should take responsibility for her own life.
  • Targanielle
    For me, there are two other questions to be taken into consideration.

    1. Has Thelma lent Louise money before to bail her out, and if so did Louise pay her back? She obviously didn't change her ways even if she did repay the loan.

    2. Has Louise got any intention of changing her ways? ie is she saying, if you lend me this to get out of the hole I have dug for myself, I am going to do this and this to change my ways and pay you back as well?

    Personally I hate owing money to anyone and especially to a friend, and I have only once borrowed money from a friend and then I paid it back as soon as I possibly could. Nor did I allow her to lend me more than I could pay back within one month. So if I were Louise I would probably thank Thelma from the bottom of my heart, but turn the offer down unless I knew I could pay her back (which frankly doesn't look likely here).

    Having said that, if I were Thelma I would be happy to lend the money to Louise, but if I did so I'd be under no illusions that it would actually change anything in Louise's life except in the short term. The comments above about it changing the friendship and that in the end it doesn't help the person with problems managing their money are both true too, in my opinion.

    It's a hard one but in the end the decision would have to be Thelma's alone, since she knows her friend so well, and only she can decide whether it's worth the risk of changing or losing their friendship.
  • bookish
    Louise, try martin lewis's site!
    Yes, is the simple answer, but, she should treat it as a gift, and not expect to recieve anything back, and if she does, it's a bonus.

    She should also make it clear, that louise needs to sort herself out financially, and this is a one off deal, she is not the local cashpoint!
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