Fast-forward to a couple of weeks ago, when Mike came to me with exactly the same issue I had then. He didn’t come to me to try and say I owed him it; it came up by discussion when I was joking with him about when he’d put a ring on his girlfriend’s finger, because she’s an awesome woman whom my wife and I both love. The amount he’d need is only about $4,000, and he swears he’d be able to pay me back in about a year, which is fine with me because he’s just finishing his last semester in his master’s program and has a job lined up already that will pay him well; frankly, I’d let him take longer if he needed to. At this point I’m making much more than I made then, and my wife and I make more than enough each month to pay our mortgage, utilities, food, retirement accounts, etc. and still have money left to kick into our savings, which is almost six figures. (I’m not trying to brag; my point is that lending him $4,000 out of savings wouldn’t hurt our bottom line in any way.) I brought this to my wife and said I’d like to help him, especially in light of what he did for me back in the day, and my wife flat-out refused. She doesn’t think his MA and government job will get him enough to pay us back in a year, and she believes our savings are for emergencies and nothing else. When during our subsequent argument I reminded her that she loves her ring and wouldn’t have had it without his help, she said she’d consider it but only if we charged him 2-3% interest, because then “we’re getting back a return greater than what the bank is giving us but less than if we put it in a CD.”
I’m really torn here. It’s OUR money, not MY money; I don’t want to make unilateral financial decisions that would affect her as this would. And I do agree with her “Don’t spend your savings” point in general. But I feel like this is a unique situation that warrants bending the rule for a person I’ve known for almost twenty years and who my wife’s known for almost eight, a guy who stood next to us at our wedding and a guy who refused to charge me interest even when I offered to pay it. We’ve still got plenty of money to support ourselves if an emergency occurred, and I also know (but haven’t said this) that, if I needed to call in the loan early, he’d find a way to get it to me because that’s just who Mike is. So how do I balance being a good husband with being a good friend? What do you do here? — An Interesting Dilemma
Wow… can you divorce your wife? Ok, in all seriousness, your wife is being totally short-sighted here. Yes, a $4,000 loan to a friend to buy a piece of jewelry is a lot of money. But, it’s not just any friend, it’s not just any piece of jewelry, and, by your own admission, you wouldn’t miss the $4,000 for a year or more anyway. However, you’re right that the money is not just yours; it’s your wife’s, too, and, though she may have found the gesture sweet when your friend loaned you money to buy her engagement ring years ago, she had no say in it. It isn’t exactly fair that she’s expected to pay back a favor she had no role in asking for in the first place. But relationships — especially with best friends and close family members — are more important than money. And when your wife agrees to giving Mike a loan only if he’s charged 2-3% interest on the loan, she’s talking about $120. Literally, $120. That’s what this argument is about. A measly $120. Because she thinks that’s more important than the relationship you have with your best friend?
Your wife is wrong. A measly $120 — or even $4000, if you ask me — is not more important than your friendship with Mike, and you have to figure out a way to make up that difference. First, I’d try talking some sense into your wife. She must be a little reasonable, right? Have a heart? Be a good and loving person? You married her, she seemed to have gotten your best friend’s approval, she wants Mike to marry a woman you both love. There must be some redeeming qualities in your wife, so appeal to those qualities and state your argument that $120 is not worth offending Mike when he was so good to you at a time when you needed him (to your wife’s direct benefit!). If she still doesn’t back down, pay back the $120 yourself. Do you have your own account that’s separate from your wife’s? If not, get one. And start putting enough money into it each month so that you can spend a hundred or two hundred dollars at your own discretion without needing your wife’s permission. She should do the same. Sharing finances should not mean getting every single purchase and transfer of money okayed by your partner. (A $4,000 loan, though, obviously, needs to be agreed upon).
Finally, I’d look at the larger picture here and take this as an opportunity to discuss your finances and financial goals in greater detail with your wife. You have almost 100K in savings for “emergencies.” That’s quite a lot to have in an emergency fund. Is there anything besides an emergency and retirement that you’re saving for? Some of that money might work better for you if it were invested. And maybe there are experiences or purchases you can make together that would bring joy and fulfillment to you both, highlighting the importance of building memories as well as building savings.
I’d also suggest discussing whether there’s a certain percentage of your savings that you both would feel comfortable earmarking for emergencies of loved ones. What if the next person who might need a loan is someone from your wife’s side? What if it’s her best friend or sister or parent, and the money is going toward something more important than a ring (which, let’s face it, is probably most things…)? Are you both prepared to make a loan? Is there a limit on the amount you’re comfortable loaning out? Is she willing to charge her loved ones interest? (And for the record, I see nothing wrong with charging interest on a loan — that money would be making interest sitting in an account, after all — but it would be easier to charge interest if it were a rule of yours and not some arbitrary thing.)
While you can’t anticipate every financial question and obligation with which you’ll be faced in your life together, having some general rules in place will help with future scenarios where you might otherwise not be in agreement. And seeing that you have some opposing values around money and relationships, setting up a general outline and plan that addresses potential questions would be a wise idea. For the immediate dilemma you now face, though, I would focus on the $120 and how best you can either get your wife to get the fuck over it or make it up yourself without asking Mike to pony up when he refused to accept interest on your loan years ago. Good luck!
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If you have a relationship/dating question I can help answer, you can send me your letters at firstname.lastname@example.org.
Kate December 16, 2016, 10:02 am
Omg you all sound like idiots. Who needs a ring that costs upwards of $5K so badly but can’t afford it, that they take a loan from a friend?? Your wife sounds awful, WWS about finances, and having $90K in a savings account (cash) is just dumb. Half or more of that should be in investments. You need a financial planner. And ffs, asking for interest on a $4K loan under these circumstances?? You two should just give it to him. As a gift. The fact that you can’t agree on this is weird and fucked up and I can’t even believe this is a problem. Go spend 20 mins reading the news on real news web sites.
Guy Friday December 16, 2016, 11:22 am
I wasn’t going to reply this early because I wanted people to give advice independent of who was asking, but to be clear:
1.) This is my letter
2.) The loan was taken because my boss at the time wasn’t paying me on time. I’d have had the money if I’d been paid every other week as was contracted. It’s why I left that job; I think I may have mentioned that in other posts back in the day.
3.) I never said I didn’t have money in investments or that I didn’t have a financial planner. I also have investment funds and such, but I felt like I sounded douchey enough listing what I had with the money as is, so I didn’t want to keep listing things and make it sound like I was bragging. I’m sorry if that wasn’t clear.
4.) I understand there are bigger problems in the world. I spend my career helping the indigent; I get it. I’m not trying to say this is the worst problem in the world. I asked Wendy for advice because, at the core of it, this is about respect for a friend who’s like a brother to me versus respect for a spouse. All the other details are just color, really. I’d love to find a way to make both of them happy, because they both matter a great deal to me in my life.’
5.) I’m sad that this was what first came to your mind to say. It isn’t me judging you or telling you you’re wrong; it’s just sad to me, honestly.
Kate December 16, 2016, 11:26 am
Well, it is what came to mind, and I’m sorry that your feelings are hurt. As I said downthread, there were so many other options besides taking a loan from a friend. Now you’re older and wiser, but you are dealing with the consequences.
Monkeysmommy December 16, 2016, 12:03 pm
I am not one for trying to sugar coat, so I won’t: your wife is being a bitch. You can afford it, this man is a longtime friend, and it is really a kind thing to do considering history. You know what, I once gave my husband shit for loaning a friend money; he was a guy we had known for all of a year, we didn’t have a 6 figure (or even 4 figure for that matter) savings, and had our kids to think of; my husband checked me, and told me if it wouldnt impact our ability to pay bills and support our family, he was doing it. And he did. I never expected to see that money again, this guy had no job and owed a lot of people. About 9 months later, my husband was one of the first people he took care of when he had the money. I feel like an ass for acting like your wife is now.
No, noone needs a 4000.00 ring. But you asked for advice, and I would tell you to tell her what mine told me: If it isn’t going to hurt you in any way, stop being a stingy jerk, it is okay to be a nice person who helps others. Loan him the money.
Seriously? Seriously! December 19, 2016, 5:27 pm
Don’t worry– Kate is the worst. The absolute worst. Managing to judge you both for being stupid to spend SO much in something as clearly wasteful as an engagement ring (why not just use a piece of string you found in the trash… materialists!) and yet so stupid to consider it a sufficiently large amount of money as to want to be paid back, instead of the worlds most awkward gift. And don’t you have perspective? People are dying and the world is ending so how selfish of you to want advice on how to please both your best friend and your wife. Don’t worry — she’s the absolute worst. Not everyone reading thought that.
Kate December 19, 2016, 5:43 pm
Again, don’t care what you think of me, literally at all, but a clarification on your comment here: As I stated somewhere else in this clusterfuck, I don’t care if you spend tens of thousands on a ring, if you can afford it. If not, wait or get 0% financing at the Jewelers.
Guy Friday December 19, 2016, 7:09 pm
If that was aimed at me . . . I mean, it was a comment from three days ago. As you’ve said, we’re names on an internet board, so I just assumed you said your piece, I said mine, and we moved on 🙂
Kate December 19, 2016, 7:13 pm
It was not for you, it was for whoever was ranting about me right above.
Kate December 19, 2016, 7:17 pm
People who rant about me seem to care a lot about me, though. Exhibit A: Baccalieu.
LisforLeslie December 16, 2016, 10:11 am
WWS and what Kate said.
Your money is wasted in a savings account. That is emergency money and no one needs 90K in an emergency.
You need to show your wife that she’s being shortsighted over $120 . One nice dinner. One baseball game with beer.
I get her point that the two of you need to look at your joint money with care – but it sounds like she’s got anxieties about financial security. Draw up a simple agreement with your friend that he’ll pay you back no less than X per month until the debt is paid. Tell him that you want to document it because your wife and you have determined what you should do for all loans from relatives and friends. This is your new standard protocol as a couple. Have it notarized. Don’t make this into more than it needs to be.
Scarlet A December 18, 2016, 1:54 am
I agree, it sounds to me like the wife has issues about financial security. Her knee jerk response may in fact be negotiable, but sometimes people’s fears cause hard rules to emerge. I lived with a food-hogging, eat-it-all-before-someone-else-can type father and then husband (now ex) and I know I can be really annoying because it gave me some food insecurity issues. (Like I practically hiss at my partner if he touches/looks at ‘my’ food as a Pavlovian response because of the men in my life historically not caring if there’s any left for me. Brains! They are jerks.)
Anyway, I don’t think we need to rush in and call this poor woman a bitch like some other commenters are doing. She has anxieties about finances. Like LisforLeslie said, see if a document being drawn up will help her feel okay about it. Maybe she’s worried this will become a precedent, so making rules about when to loan money to friends/family (and even WHICH friends/family) could definitely help.
convexexed December 16, 2016, 10:19 am
Okay, I don’t think anyone’s an idiot here, for the record. I’m not gonna comment on the cost/merit of engagement rings, because that’s the specifics, but not the principle, of the question.
Yes, the LW should make the loan, for the reasons both he and Wendy stated. If it were me, I would take $120 from my paycheck, and either hand it to my wife or deposit it in savings, saying: This extra contribution to our savings is in lieu of asking interest from my friend, because on principle I will not ask from him something he would not ask from me.
The wife is also acting on principle, it seems rather rigidly. I would want to know, what is she really scared of? Is their financial comfort something new for her (did she grow up with economically insecure?) and she is afraid that at any minute something bad will happen and they will be destitute, hence the need to have such an enormous ’emergency’ account? I grew up with my dad often out of work, and that feeling of insecurity is hard to shake, and can make one risk-averse. This is something to talk about, to reassure her that you are managing your money and risk well. Or, is she afraid that this is setting a precedent of tapping into savings for every friend/family member who comes knocking, and that to make even a single loan is to start sliding down a slippery slope into bankruptcy? Again, a conversation where you establish boundaries and policies together should happen. I want to assume that her reluctance is coming from a place of uncertainty, rather than pure tight-fistedness. Uncertainty is easier to address than meanness.
Do what you have to do, LW, to make the loan to your friend and also to improve financial communication with your wife. It is a good thing to be part of your friend’s happiness, as he was a part of yours.
For specific advice on other possibilities for what to do/what not to do savings and investment wise, I’d recommend two books by Helaine Olen: ‘Pound Foolish: exposing the dark side of the personal finance industry’ and ‘The Index Card: why personal finance doesn’t have to be complicated’. I’d recommend these to anyone, actually. Good luck, and best wishes to your friend on his engagment!
TheRascal December 16, 2016, 10:38 am
I would not loan a friend money for an engagement ring. It’s really generous of LW’s friend to have done that for him (though I think LW should have turned down that loan and bought a ring he could afford). What happens when LW’s friend hits a financial snag and can’t pay the loan back in the way he promised? How will that impact the LW’s friendship and his marriage? If LW lends the money, LW should count it as gone.
Wendy mentions creating financial rules as a couple and here is mine/husbands: Don’t loan money to friends. Friends and loans are a bad mix. If LW, you feel so obligated to repay the favor, just do what Kate said and gift him the money.
(The one exception to my “Don’t Loan to Friends” rule would be a critical event like a medical emergency–and then, I wouldn’t have any expectation of repayment.)
Gwyneth6 December 16, 2016, 7:50 pm
Hmm I think it’s better to keep it private that you consider it gone, than to say it’s a gift. It would make the friendship feel weird , and could be a slight to the friend’s dignity.
TheRascal December 17, 2016, 9:08 am
There are two situations that I mention (though I disagree with loaning money to friends, I’m not the one who has to make this decision and it seems like LW would like to do this): 1.) Loan friend the money but have zero expectation of pay back (obviously, LW wouldn’t tell friend that). 2.) Gift the money.
Why would gifting the money make the friendship weird? I’m not the only person suggesting this.
Gwyneth6 December 18, 2016, 2:21 am
Because it’s too big a gift, and the symbolism of it (friend paying for major life event) just seems to make the friend look weak. Actually I guess loaning the money for the life event is a bit weird to me too but there’s precedent for them. It might also occur to the friend that LW doesn’t feel confident in his ability to pay it off, which would feel insulting. But I could be wrong. I know that it’s a popular suggestion here and I only responded to this one comment randomly.
Ramen Dreams December 16, 2016, 10:51 am
That’s a disappointing response from your wife. It’s clear that this friend and this loan goes beyond the usual advice about loaning money to friends, and especially in this particular scenario. Plus it doesn’t sound like there are other things going on, such as gambling habit, drug use, failing business, history of poor financial decisions, that makes this loan foolish. I think Wendy outline a good strategy about pointing out that charging interest only gives you $120. If she doesn’t change her mind after that conversation, the last ditch plan to pay the interest yourself makes sense. I think it would be a bad idea to compromise with your wife on this issue by adding interest or terms to the loan for your friend.
To the other people thinking it’s okay to call people idiots for choosing to pay 4-5k on a ring, leave your judgement at home. He’s not asking your advice about how much to spend on an engagement ring.
Kate December 16, 2016, 10:57 am
It’s my opinion, and this website is about opinions. Leave YOUR judgment about my right to state my opinion up your ass.
blink14 December 16, 2016, 11:44 am
No need for such a rude comment.
Unwanted_Truth December 16, 2016, 11:52 am
Nobody asked for your opinion on that specific part of the issue. Yes you’re being extremely rude today, even more so than usual honestly.
mertlej December 16, 2016, 12:47 pm
Ashley December 16, 2016, 3:06 pm
Quit trying to be bittergaymark.
BecBoo84 December 19, 2016, 5:22 pm
Ashley, I think you win the internet today!!!
Seriously? Seriously! December 19, 2016, 5:29 pm
I rest my case.
Kate December 16, 2016, 11:49 am
Kate December 16, 2016, 11:56 am
It’s not the price of the ring, it’s being able to afford it… and taking a loan from a friend… that I have an opinion on. If you want to spend $30K on a ring and you can afford it, have at it. You guys should also know by now I don’t care what Internet strangers think of my character. Breath, wasted.
Kate December 16, 2016, 3:12 pm
Ashley, whoever you are, I don’t care, and I’m sure BGM cares even less – if that’s possible. Which it is not.
Kate December 16, 2016, 3:14 pm
About what you think, I mean. If he cares what *I* think about this letter, I also don’t care.
Findingtheearth December 16, 2016, 11:02 am
I agree with convexexed. Pay the “interest” yourself and loan your friend the money. Life is too short to worry about squabbles like this.
And see a financial planner.
Elin December 16, 2016, 11:03 am
I’ll admit I skimmed the letter but how, LW, is your friend in such a dire need financially now that he can’t swing a 4k ring? He had money just “sitting around” before, but now he has 0 savings? I find that hard to believe.
Additionally, do neither of you know that you can finance a ring AT THE JEWELER a lot of the time for 0% for X months? If the jeweler you went to couldn’t do that, go to a different one. I’m sure the “perfect” ring you found at the jeweler in the display case is not one of a kind lol…
Idk I just would NEVER ask a friend for money (though I’d lend it to a friend in need, but by in need I mean if they were at risk of losing their house or couldn’t feed their kid or had to repair their car and couldn’t swing it, etc, not something as superficial as this). I’d be mortified, I mean it would never even cross my mind, ESPECIALLY if I were not in such bad shape financially that I could pay it back in a year… I just don’t see how either of your situations warranted borrowing from a friend with all the other options available. Call me crazy but this is icky and makes no sense.
Kate December 16, 2016, 11:14 am
100%. Taking a loan from a friend is generally a bad idea. Jewelers offer financing, and if you could have paid it off in a year, you should have done that, or put it on a card, or waited, or, idk, bought a ring you could afford. You can design the ring you want at any time, using the funds you have available.
And why now enable a guy who has ZERO savings but is trying to buy a $4K piece of jewelry? You wouldn’t have to if you hadn’t taken that loan, but now you do.
Guy Friday December 16, 2016, 11:32 am
So, to clarify: 6 years ago I was just out of law school working in a dead-end job where my boss was sketchy and didn’t pay regularly. My friend had just been honorably discharged from the army, where he squirreled the little money he had away in savings. I did it because I was in love and stupid, and you know how that goes. He did it because that’s just the kind of guy he is.
Since then, his money has mostly been used up trying to deal with health issues the VA won’t handle (as has been the case for many vets), and he finally got over his fear of looking stupid and went back to school. He’s completing a BA/MA program in psychology in 4 years instead of the usual 5-6, so his money has gone to that. He didn’t expect to meet his girlfriend, much less click with her, and he’s in stupid love world too. He’s not a gambler or an addict or a misspender; he’s just a college student under the GI bill.
But, since several people have commented on it, I want to be clear: He didn’t ASK me; I WANT to help him. I don’t feel OBLIGATED to do so because he helped me, though it’s certainly a good reason why I would be more willing to without question. To me, it’s a matter of loyalty. This is a guy who served our country without complaint, who is going back to school to pursue a dream, who wants to give his girlfriend a better life than he had. I could say no to him, and he wouldn’t judge me for it, but if I can help someone who has always been there for me, why not do so? Isn’t that what I was put here for?
Kate December 16, 2016, 11:40 am
Yes. Whether he asked or not, you really have to. Ideally you’d just give it to him as a gift, but if that won’t fly with your wife, then make it an interest free loan. If that won’t fly, pay the interest yourself.
commalovr December 16, 2016, 12:16 pm
You’re a good friend, Guy Friday, and I admire your ability to appreciate the people who surround you.
I say make up the $120 yourself if your wife doesn’t buy into it and go for it.
for_cutie December 16, 2016, 2:14 pm
I guess my only question is about the timing. Why not wait until he graduates? I see you were in a bidding war for the ring you bought, but couldn’t you too have waited until your income was more reliable to even start looking? My husband worked extra hours leading up to our proposal so he could buy the ring outright. I guess I just don’t understand the urgency to propose when you’re in a long term committed relationship, especially if you are not in the place to buy the ring you want to buy.
Regardless, I think since he loaned you, you need to loan him and your wife should understand the give and take. I am sure that someone helped her in the past and one day she’ll like to return the favor. It’s as simple as that.
Miss MJ December 16, 2016, 2:22 pm
Yeah, I think your wife’s lack of understanding of the give and take of longterm friendship and unwillingness to extend kindness that you can afford to someone who extended it to you is what bothers me the most about this letter. Forget the money (you can afford it) and seriously forget that it’s for a ring (who cares?), you should really try to get to the bottom of what it is about this that bothers your wife so much. Does she feel financially insecure? Is she normally less charitable or generous than you? Does she not like your friend? Does she think this is a bigger pattern of you giving things/time/whatever away from your family? I don’t know, but it’s really odd that she’s seems so cold on this. If you couldn’t afford it, I’d understand, but since you clearly can, I don’t get it.
Stilgar666 December 16, 2016, 11:04 am
What others have said.
That’s too much cash savings, invest.
She’s cold blooded.
Give him the money.
SherBear December 16, 2016, 11:37 am
I would not loan money to a friend to buy an engagement ring! He can get engaged and upgrade later when he can actually afford it. Loans for friends/families should be reserved for unforeseeable situations – this not being one of them. Your wife didn’t ask you to borrow money to buy the “perfect” ring (although if she did insist on an expensive ring than that’s another issue) so it’s unfair of you to expect her to think that’s an okay situation to loan out $4k. Which is honestly an insane amount of money to spend on a ring THAT HE CANNOT AFFORD. Like literally, it’s just a ring – if she won’t marry him without a fancy diamond than that says a lot about her character. Don’t loan the money and keep the savings account to 6 months salary for emergencies!
Anonymousse December 16, 2016, 12:09 pm
I have a plain band. I love it.
RedRoverRedRover December 16, 2016, 12:25 pm
I would tell your wife that you changed your mind and you agree with her, that just because it’s a friend doesn’t mean you should give a loan interest-free. Which means you were wrong all those years ago and now you think you owe your friend the interest on the loan he gave you. Since she agrees interest-free loans between friends aren’t a thing, she should be fine with this.
Anon from LA December 16, 2016, 12:47 pm
HA! This is… not a bad idea at all.
Amanda December 16, 2016, 12:27 pm
I see nothing wrong, if and when you are able, to help those close to you. If this will not hurt you or your wife’s ability to pay bills, then go for it. Pay back the $120 yourself if it’s such a huge sticking point.
I’m not going to get into the details of either person’s financial situation. I’m sure there’s more than enough details on each side that we don’t know. Nor need to know. Besides, nobody wrote in asking for financial advice. He wrote in asking to how to help a friend and keep his wife happy.
There’s enough vitriol and hate in the world right now, if you can spread love and joy – go for it.
veritek33 December 16, 2016, 12:41 pm
LW/Guy Friday – I think you’e a really, really good friend. And I think you have really good people around you, obviously. I also don’t think your wife is a bad person, just that this is a tricky situation.
Lending money between friends is almost always a bad idea, but it sounds like it worked out well for you two in the past. I’ve never asked a friend for money or loaned a friend money. However, when my job was eliminated this summer, my two best friends were at the front of the line to say they would lend me money if I needed it and their spouses were on board with that. Fortunately, that didn’t need to happen, but it was comforting to know they were there for me if I needed it.
I think maybe your wife is just concerned about it being paid back. It doesn’t really matter the amount because if it didn’t get paid back I think she probably would just have a different view of the friendship. And maybe she loves your friend enough that she doesn’t want her opinion of him to change?
I’ll admit that my first thought was no- don’t give him the money. Lots of jewelers offer zero percent financing, especially around Christmas! But maybe that’s the argument you use with your wife. I don’t know, it appears you have a rock and a hard place situation.
If it were me and I had the money and it wouldn’t hurt me to give it financially, I would give it to him and just be pleasantly surprised if he paid it back.
PurpleStar December 16, 2016, 12:43 pm
Ah hell, I would give your friend the 4k if I had it.
Or the $120 interest to your wife.
I think Wendy is spot on about this. The interest is a pittance in the grand scheme of your finances. I would wonder why your wife is being so (sorry) petty about this. Is she usually so parsimonious about money? I can understand her concern that your friend will be unable to pay the loan back, and if that is what she has articulated, then a fair and honest discussion should be had. But if it just about the $120, I would be worried that the resistance has a deeper reason.
Nota bena: I have loaned money to friends because it is not about the money – it is about the bond with, and the respect for, your friend.
Fyodor December 16, 2016, 12:54 pm
Sell your wife’s ring and use it to buy one for your friend. Tell her that you realized that you should never have accepted his money all that time ago and you need to fix things. Everyone wins!
mertlej December 16, 2016, 12:58 pm
I don’t have anything else to add, but I’m sorry you are dealing with this! You and your friend sound like generous, thoughtful people, and I can’t understand why your wife would be so hesitant when you sound like you are very financially solvent. Keep us updated – I hope you are able to resolve this satisfactorily.
Howdywiley December 16, 2016, 1:02 pm
your wife sounds really selfish and, quite frankly, terrible.
Jimmyjam December 16, 2016, 1:04 pm
Men loan their friends money more than women do, it is what we do. We don’t charge interest, it’s what we do. He can always make that up over in a nice dinner. 5k is not much between really good friends, I would not go beyond that though.
It sounds like you have a little bit of money in your life now, call it a wedding present and move on, stop with drama and the feelings bro. Be a friend and feel better about the gift.
My good friend who is a successful attorney feels if you can solve a problem by throwing money at it , than solve the problem
RedRoverRedRover December 16, 2016, 1:44 pm
I don’t think that’s true anymore. It was, when men were the only ones with money. But you can see plenty of women on here saying they’d do the same thing for a friend. I’ve loaned money to a friend as well. Generosity is not a gendered thing.
SpaceySteph December 19, 2016, 11:25 am
Yeah I agree with RR that its not a men vs women thing anymore. I certainly have lent and gifted some of my less-well-off friends more money over the years than my husband, not because one of us is more or less generous but because of the specific situations where it made sense to do so.
Income insecurity and generosity are more a product of upbringing than gender.
jmarie December 16, 2016, 1:07 pm
Wendy’s advice is excellent: kind and smart. LW, I hope you disregard the unkind and judgemental comments. The impulse to judge rather than to simply feel comfortable with personal choices must make for an uncomfortable way of living. Meanwhile, I appreciate reading about your trustworthy, loyal and loving friendship of many years. I agree with all that Wendy wrote and advised and wish you the best as you move toward a solution.
Moneypenny December 16, 2016, 1:15 pm
You sound like a great friend, Guy Friday. I’d do the same thing if I were in your shoes.
jmarie December 16, 2016, 1:42 pm
Even (& especially) within a marriage I have found it necessary & beneficial to stand by who I am and my beliefs/standards. From this stance, so far, my husband & I have both learned & benefitted. Just for example, & im not saying/suggesting this is the case: Your wife might not know that lending money is a way for you to express your friendship. A basic aspect and die hard belief of yours might be that money does not matter, but friendships and gestures in the name & spirit of friendship do. In other words, you & your wife have unity of purpose in your marriage, but expressing who you are as an individual (your die hard, line in the sand beliefs about living this life) can change, strengthen and grow your relationship with yourself and your relationship with her.
jmarie December 16, 2016, 1:44 pm
PS & the best part is that no one else can truly decide those beliefs but yourself. & no one but you can decide which ones (& when/what instances) are those for which you will fight.
bagge72 December 16, 2016, 1:55 pm
It would be less expensive for him to take a one year loan out from a bank at 5% interest than to borrow it from you with 3%, because that loan will charge the 5% of remaining balance after each payment, so I would say loan him the $110 interest payment on the $4,000 loan he can take from his bank.
Miss MJ December 16, 2016, 2:04 pm
I agree with what Wendy said and I think you’re a good friend for wanting to help your friend since you’re obviously in a position to do so.
Jimmyjam December 16, 2016, 2:04 pm
It was meant as a man to man comment , sorry you did not pick up on that vibe , also not meant to be sexist., or offensive or anything else you want to throw my way.
RedRoverRedRover December 16, 2016, 3:14 pm
It just made no sense, since it was based on an incorrect assumption. A “man to man vibe” doesn’t change that.
Howdywiley December 16, 2016, 3:54 pm
“Man to man..”? What does that even mean anymore?
ele4phant December 16, 2016, 4:37 pm
Ohhhhh, so if its man to man, you don’t have to worry about peddling sexist stereotypes? For a statement to be offensive and sexist it must be a) actually directed towards a woman, and b) intended to be offensive?
Sure. whatever you say…
dinoceros December 16, 2016, 5:10 pm
Here we go, once again.
for_cutie December 16, 2016, 2:21 pm
A mentor of mine, who happens to be a seasoned psychologist, said “if you can solve your problem with money, than it is cheap.” This always stuck with me. I bet it would stick with your friend who probably wishes he could have fixed his health issues with just money. Maybe tell your wife this. It might give her some perspective about the role money should play in our happiness and well being. It may not win your argument, but its a nice dose of reality, especially during the holidays.
Juliecatharine December 16, 2016, 2:31 pm
WWS, this guy is an old and dear friend who helped you when he was able. The kind and fair thing to do is return the favor. FWIW Wells Fargo 1 year CD rates are at .05% so I don’t know what rates your wife is looking at but I don’t think anyone is paying 2-3% on CDs for $4k.
dinoceros December 16, 2016, 2:33 pm
I’m super disappointed that the wife is being talked about like she’s a terrible person. It’s not that common for people to loan their friends thousands of dollars (or maybe I’m just in a different social class and don’t get it). So, sure, the LW sounds like a very generous person, but that doesn’t automatically make his wife the devil. She wasn’t a part of the first loan, so I don’t think this has the same amount of meaning that it has to him. And A LOT of people give and get the advice that finances and friendships don’t mix. None of this is the advice I’d give, but I seem to be in the minority, but at least don’t jump to conclusions that the wife is some witch.
Kate December 16, 2016, 2:38 pm
I think it’s that she’s not against the loan, but is insisting interest be charged. At the least, that appears petty and cold, since A) interest was not charged for HER ring, B) it’s $80-$120, and C) this guy is a struggling veteran and they have a ton of cash.
Now personally, I don’t think you lend money to friends or family. You gift it, and if they pay you back, great. Charging interest… so weird.
Guy Friday December 16, 2016, 7:21 pm
Well, I think her thought on that is more “making the money work for you,” and less “getting her pound of flesh.” I don’t see it as petty and cold; when we borrowed money from her folks to help with the down-payment on our house we agreed on a rate less than what the bank charged but more than they’d get in savings. It’s just how she thinks, because she works in a STEM job and is analytical in that way. And she’s not wrong; it’s just I think for this ONE case I don’t necessarily mind if we’re not maximizing profit, because I think the emotional return we get on knowing we made this couple happy is of greater value than the interest we would charge.
Also, lest this be misconstrued, my friend wouldn’t be opposed to an interest rate. I would be. I think treating friends like business people doesn’t end well. I think you give it, and you trust them to pay you back if they say they will. But, again, this isn’t so much money out of our account that I couldn’t cut him slack if he needed it.
ele4phant December 16, 2016, 3:17 pm
Yeah, I really think it is too bad that the wife isn’t being more generous, BUT at the same time, $4000 is not a small amount and I wouldn’t necessarily feel comfortable with my husband making unilateral decisions about that much money.
And I realize she was the beneficent of a similar deal her husband made years ago with this same friend, but she wasn’t part of that original deal. She maybe didn’t know about it, and maybe wouldn’t have agreed to it.
I don’t know, she is being kind of cold hearted, but I also don’t think it’s unreasonable for her to be wary of lending out that much money.
I think she’s making a stink about interest because she doesn’t really want to loan the money at all.
Kate December 16, 2016, 3:23 pm
Yes, it would make way more sense if she just said, I’m not comfortable with loaning $4,000 to a friend, and articulated why, rather than quibbling over a hundred bucks.
dinoceros December 16, 2016, 3:42 pm
Yeah, I know that part’s a little weird. I assume it’s because she doesn’t really think he’ll pay it back on time and she thinks that’s incentive to do so or, like you said, maybe she is hoping he’ll turn it down.
Ron December 16, 2016, 4:10 pm
This is different, but somewhat analogous, to marrying somebody with $100K of student debt. You acquire a share of the debt with the person you choose to marry. It doesn’t matter whether or not you would have chosen to go $100K in hock for an undergraduate degree in English lit and an advanced degree, in which you applied one of the currently trendy criticism styles to Beowulf. Your SO thought that was a useful expenditure and a sought after educational opportunity/achievement.
Well, in this case the wife married a guy who has an implicit debt to the friend who loaned him the interest-free money to buy her engagement ring. Perhaps she does feel that $5K for an engagement ring is dumb and a borrowed $5K for a ring mind-numbingly stupid, but that is the decision her now-husband made, and the friend helped him when he needed help. Perhaps wife would have married him without any ring at all, but perhaps he wouldn’t have had the courage to propose until he could pay for the ring. In any case, husband got a big favor from his friend when he needed it. Friend did not expect reciprocity. Friend never expected to be in the situation of not being able to pay for the engagement ring he wanted to give to his SO. Husband has a chance to pay back the favor he received. That is pretty much the definition of an implicit debt.
Husband is going to feel like a bad, ungrateful friend if he strands his friend on this one. He is well able to loan the money, even if it is never repayed, although I think it will be.
It might not be how wife would choose to spend money if she were in the mens’ shoes, but it is really bad form for her to stop husband from making the loan or to ask for interest, when the friend didn’t ask for interest.
ele4phant December 16, 2016, 4:27 pm
I dunno that I agree with your analogy. First of all, we don’t know that she knew about the loan. I suppose from a legal standpoint, your debt becomes your spouses debt regardless of whether you know about it or not, but morally, if she didn’t have the full knowledge of it I don’t know that she’s in the same position than if she knew beforehand.
Also – I don’t know that I accept he is still implicitly indebted. I can understand why GuyFriday wants to reciprocate and if I was his wife I’d be okay with the loan, BUT money was loan and repaid in full. Obligation fulfilled.
ele4phant December 16, 2016, 4:33 pm
@Kate. I mean, I think may feel like she can’t outright say no, knowing the history and knowing how cold hearted she will be perceived, so this is just her way out. It doesn’t really make any fiscal sense, but I bet that’s where it’s coming from.
She doesn’t want to give the money, but she knows – unconsciously or not that saying no will make her the b*tch, so this is her way of trying to shut it down.
I don’t get the sense she’s being purposeful or manipulative her, I just think this is how her brain is trying to deal with the situation.
dinoceros December 16, 2016, 5:17 pm
I don’t think that accepting a loan from someone means that you owe them a loan, though. And it’s not like he currently is indebted. Loaning someone money, IMO, is a very distinct decision. It shouldn’t be tied to them returning the favor in the future, as long as they have repaid the money the way it was agreed upon. If part of the deal was that he had to offer a loan at any point in the future, then that would be different.
When you get married, if you choose to mix your finances, then you have less flexibility on how to spend your money. I think if someone is expecting to want to spend significant amounts of money without having to come to an agreement with their spouse, they should keep some aspects of their finances separate. For example, in this situation, if he had socked away thousands of dollars to loan his friend, then I’d say that it would make more sense to go against the wife’s wishes.
Guy Friday December 16, 2016, 3:22 pm
No, I don’t think she’s the devil either. I definitely get where she’s coming from, and it’s not from any bad feelings she has towards my friend; it’s just genuinely how she feels about money and lending in general. And she understands how I feel and how important I feel this is, which is why this is such a tough question for both of us, really. But while I think she’s wrong, I don’t think she’s being mean-spirited or hypocritical about it.
ele4phant December 16, 2016, 4:22 pm
I don’t know what the right answer is for you and your wife when it comes to loaning money to your friend.
I don’t know if you can get on the same page for this particular instance – but it does seem like you two are long overdo for a financial discussion. It doesn’t sound like you are on the same page or share the same values when it comes to money. I’m kind of surprised you’ve made it six years without it coming to a head yet (although maybe you have and your just not sharing that with us).
A $4000 loan is pretty small in the scheme of things. If this alone is this big an issue for you two, that’s not a good sign.
dinoceros December 16, 2016, 5:19 pm
I feel like I might live in an alternate reality here. $4,000 is a lot to me. Maybe some people (or apparently a lot of people) make enough that it’s a small amount to them, but I don’t think it’s large enough to be a huge red flag that they can’t agree.
My assumption was that it’s a combination of the principle (some people don’t like to loan to friends) and maybe she also sees it as a large amount, where others do not? Some people, even if they become wealthier, may not be used to $4,000 being a small amount.
ele4phant December 16, 2016, 6:45 pm
I mean I agree with you that as a one time expense, $4000 is a pretty big chunk of change – and honestly if I were GF’s wife, yeah, it would be hard for me to stomach the thought of loaning that out – regardless of the long friendship and history of previous loans.
But in terms of their entire financial lives together – this loan is rather small. If they are divided on something this minor (again – we’re talking about their entire financial future here), well it’s not so good to be so far apart on something so small. It speaks to some pretty major conflicts they’ll run into unless they work now to get on the same page.
Guy Friday December 16, 2016, 7:13 pm
I think we’re on the same page about 90% of the time financially. I understand her hesitation: her father was one of a large number of kids, and he’s always been seen as the guy to go to for family loans (and he’s done it out of obligation and because he was a BigFirm partner who made WAY more money than he could spend), so she’s sensitive to that. She understands mine: I’m a non-profit lawyer who measures value in souls touched and not dollars saved, but my family was terrible with money so I know where every penny of mine is spent. We’re definitely on the same page but for these weird and unique situations.
I think the disconnect is that I was always taught that not every family member is blood-related, and not every blood-related person is family, you know? And she’s got the more traditional definition. I think it’s just that she hasn’t had a similar situation occur with a friend whose like a sister to her, so she doesn’t exactly understand the emotional aspect of it. But we’ll figure out a way to work it out. We always do 🙂
saneinca December 17, 2016, 3:09 am
This is one of those situations where you have to agree to disagree. Unless you are going on a loaning spree, your wife has to compromise because this is important to you.
Most people are decent, and 4 out of 5 people I have lent money, returned it to me without even asking.
Kategreen December 16, 2016, 3:06 pm
I wasn’t going to comment, as I’m just a (longtime) lurker, but I’m so surprised at the judgmental comments on this letter! The letter writer didn’t ask for financial advice regarding his savings, or for anyone’s judgement on how much his social circle spends on engagement rings.
And as far as loaning money to friends, I have both received and given loans to friends, and my ONLY important rule to keep the friendship okay is to never expect to receive it back. Give the loan only if you’re completely OKAY (both financially and relationship-wise) with the friend not being able to pay it back, even if he says he can. I’ve never had a time where loans weren’t repaid from either side, but having that philosophy def helps avoid any weirdness in the interim or in the worst case scenario.
That said, it sounds like the letter writer and his friend have similar views on money, and that this wouldn’t be a problem between them at all. I guess my advice would be to approach your wife and talk about how you and her are seeing the situation in different ways – to her it’s a financial transaction, but to you, it’s a gesture of friendship. It’s no wonder you can’t agree, you are deriving two totally different meanings from this. I would tell her it’s important to you as a gesture of friendship, and that because of that, the charging of any interest would most certainly take away from that gesture. If she’s willing to consider it WITH the interest, it sounds like she isn’t that far away from considering it withOUT the interest, as long as you guys can get on the same page in terms of making this a gesture and not a transaction. Like Wendy said, the interest is so small, so she is operating under a principle that she thinks applies to the situation (as a financial transaction) but instead would only undermine the actual situation (a gesture of friendship). I don’t know how helpful this is, but good luck!
tlee December 16, 2016, 4:05 pm
I guess i can kind of see both sides, since my husband has done this with his friends before. Except none of them have loaned him money in the past. He is just really generous with family and close friends. So if anyone asked him for money he would assume they really need it (regardless off how they will use it). I agree immensely with Wendy on having different accounts. My husband and i are both working professionals, so we keep separate accounts but also have a join t checking and savings. I think this makes life so much easier, because really we only have to discuss the joint money and how that is spent.
The wife of OP didn’t take part in the original lending, so really she doesn’t owe anything to anyone. I think he should talk to her about it and try to explain why its important to him, once more. If she still says no. He should pull he’s own money together and provide that to his friend. IF he doesnt have enough right now in savings or stocks (you mentioned). Then let your friend know, I’m sure he will understand. As, i doubt his motive for lending you money in the past was solely for this moment.
He just needs remember one thing, this is your wife, something like this should not cause a fight between you two. Your loan from your friend, was given to you , so you feel like you should give it back, which really shouldn’t involve her or her money. Here’s an idea, you could offer to eat the interest cost your wife have proposed. Just tell her you’ll pay the interest cost and be done with it. If she doesn’t agree to that, then maybe she has another reason for not wanting to loan the money.
Anon from LA December 16, 2016, 7:07 pm
Wendy’s advice here is excellent.
I don’t really like to loan money to people (not even with an interest rate). It’s never a good idea to mix money with family or friendship–it can make things really messy and can destroy relationship. If I do loan someone money, I’ll do it because I know the person REALLY needs it, and I give it with the assumption that I’ll never get it back. If they repay it, then great! If not, then I know I can afford to lose the amount I gave them.
So generally, I avoid loaning money (or even giving money) to family and friends, and thankfully my husband has the same philosophy. But if he had felt really, really strongly that he wanted to lend money to someone, I would probably agree to it. I would, at the very least, strongly consider it, because if helping out a friend is important to him, then it’s important to me too.
Which leads me to my point: How much consideration has your wife given your point of view here? Do you feel like she’s really listened to you and taken into account your feelings and your desire to help your friend? It sounds as if she’s stonewalling you, refusing to bend on the matter.
If she is, it might be worth it to ask her to think about how much this matters is to you: “I know this goes against your principals for loaning money, but I hop eyou will consider it because this is very important to me. [Friend] is very important to me, not only because he’s a great guy but also because he helped me out when I really needed it. It mean so much to me to be able to do the same for him. Would you think about it for a few days and consider whether we can find a compromise?”
Anon from LA December 16, 2016, 7:17 pm
tl;dr: There’s two ways of framing this conversation with your wife: “I want to lend money to [Friend] because he needs some help now” vs “I want to lend money to [Friend] because it’s really important to ME to help him out.” If I were your wife, the latter approach would be more effective in getting me to consider your feelings and point of view.
Skyblossom December 17, 2016, 9:31 am
I think the way to approach this is by emphasizing the friendship. I’d say that in life we all need an emergency fund and we all need deep friendships with people we can count on no matter what. You see lending the money as investing in the friendship because you value that friendship so highly and want to maintain it at a deep, strong level.
Because you are also invested in your marriage and value it highly and your wife has different views on how to handle personal loans, which is very understandable, I suggest you offer to give up something that is worth an amount equal to or more than the interest you would receive from the loan. If the two of you have all of your money jointly then you don’t have $125 that is exclusively yours to give to your wife but you probably spend money on things weekly or monthly that you could do without. Something like buying coffee or a week of golf or whatever. Volunteer to give it up immediately until you reach the level that would equal the interest for a year and so prepay the interest. That would allow you to give an interest free loan to your friend and allow your wife to feel the two of you weren’t being used or making poor financial decisions.
I’d also emphasize that the friend hasn’t asked for the loan or even hinted at a loan. Also tell your wife how it felt to you when he offered the loan. Talk about how meaningful his gesture was and how much you respected him for it and how you would like to do the same. I’d also say that you see this being a one time thing and that you don’t see yourself doing this for anyone else and that you don’t want to become the extended family and friends bank and that you wouldn’t tell anyone else about this loan.
Jahaafincher December 17, 2016, 11:29 am
Man did none of you guys grow up poor? Shi* everyones acting real weird about this. Without loans from friends my entire childhood would of been screwed as I come from a young single parent household. You cant always get loans. Friends really help bridge that gap.
I dont believe in loaning friends money if you can feel it. If you have it and wont bring hardship and if it doesnt get paid back your still ok. Why not? Some people gamble at the casino. I would prefer to gamble on people I care about.
The key to not letting things get weird is to not expect the money back. Thats the key.
Also, dont judge what they are spending it on. Just give it and walk away.
TheRascal December 17, 2016, 12:32 pm
I grew up poor and I would not lend money to a friend (see my caveat in an earlier post).
But I agree with you: if you lend someone money, you should carry zero expectations to actually receive it back.
Firestar December 20, 2016, 8:34 am
What’s your friendship with this man worth to your wife? Your history with him. The place he has in your life. Your happiness? Is it worth $120 to lose or make awkward? Why is the premium being placed on making money work… $120 worth of work by the way… And not making sure this important relationship continues to work. If my husband – who I’m super mad at right now-came to me and said he wanted to do something that would make him happy for 4k that likely would be repaid I wouldn’t think twice. If we wouldn’t miss it then what really is the issue? I have 3 motorcycles in my garage right now. But his happiness is actually worth something to me. Your wife is saying money is more important than you wanting to do for your friend EXACTLY what he did for you for HER benefit. It doesn’t matter what she does for a living. Prioritizing a paltry amount of money ($120) over your relationship with this guy goes to character. Because it isn’t that all loans are off the table, it’s that she’s not doing anything without a payday for her. Troubling. I think you should tell her it’s troubling. And disappointing given the history she benefitted from. And maybe set up a plan where you expand your joint charitable giving. Her heart seems two sizes too small.