money

Parents want to borrow money but fiance disapproves

Q:

I’ve just received a loan ($80K) and my parents are asking for $20k. My fiance is strictly against it since they haven't repaid a previous loan of $1000.  On one hand i agree with my fiance but on the other hand i want to help them.

A:

Since you borrowed $80K and you are asking about the merits of lending $20K, it sounds like $20K is likely a lot of money for you (i.e. you are not a millionaire).  It is also assumed that you didn’t borrow a bunch of money from your parents earlier (they are not asking you to repay a loan) for school, house downpayment, etc.

If you do lend to family you should think of it as gifting.   If you cannot afford to give them the money, don't do it.  You are welcome to draft complex IOUs, but at the end of the day, how are going to get your parents to pay you back if they don’t want to/are unable to? And if you do manage to get paid back, how will this impact your relationship with your parents?

The next thing to consider is - what do they need $20K for?  Is it for a large purchase or to retire debt?  Is it for extravagant day to day living expenses?  If your parents are in need, there are small amounts of money you can give them to survive day to day life.  There are also ways you can help them to get their finances in order.  This could be budgeting classes, help finding part time work, help getting access to social programs.

You will need to agree on large financial decisions such as this with your fiancé.  Can you agree on a smaller amount for day to day expenses?  How long will you want to continue with the financial support and when will it stop? Without jobs, its quiet possible you might need to support your parents indefinitely.  Remember they did support raising you to the detriment of their finances.  In some cultures it is expected for children to support their parents in old age.

Freeloading co-worker expects a ride to work

Q:

My co-worker refuses to buy a car, instead, he asks me for a ride everyday.  How can I get out of this without coming off like a jerk?

We live a 5 min drive away from each other. I have to drive the opposite direction from work to pick him up. The previous person who gave him a ride, no longer works with us, so now I am the next person he is asking. A taxi would cost him $13 each way. The bus would cost him $3 per trip.

A:

First of all, car ownership is expensive, so not everyone can afford this.  On the other hand, your co-worker sounds like a freeloader.   He might be blissfully unaware that he is freeloading, so calling him that might surprise him.  In his mind, you are already paying for gas and he is a small detour on your route.  He might think that he  isn’t any causing any kind of inconvenience for you – why wouldn’t you give him a ride.

In any case you are going to have to explain your feelings on driving to this person.  Start with hinting and if that doesn’t work, you are going to have to be more assertive and state your position.

1.

You don’t want to drive him at all.  You don’t want to spend the extra time to pick him up.   You like the peace and solitude in the car.  You don’t want to be responsible for getting this person to and from work on time every day.

Use a hint – “I don’t think I am the right person for you to depend on to get to work.  I sometimes need to go to the gym/run errands/attend appointments/meet friends, etc before and after work”.  If that doesn’t work and he doesn’t get I, you’ll have to be more assertive – “I cannot commit to giving you a daily ride, please don’t plan your travels based on me”.

2.

You don’t like his freeloading. If you want him to pitch in with costs (since you went into the economics of getting to work, I assume that this might be the issue vs. #1)

In this particular case, ask him to meet you at your house before work and drop him off at your house after work.  This saves you some time.  Also ask if he is willing to and split or chip in for the gas/parking costs.  It he is against this idea – work to understand why. (Maybe he’s cheap. Maybe he needs to pay for an expensive surgery for his family member)

The wealthy broke couple - house rich, cash poor

Q:

My friend changed careers recently and her income went from full to part time. Her husband owns multiple houses he inherited and doesn't work. My friend told me she's really broke. I have been sympathetic, paying her way when we go out.  Then her husband started complaining that he's so broke, his shoes are worn and he can’t purchase new ones.

I have a mortgage and no inheritances. How can I get out of these weird, uncomfortable conversations?

A:

Some people like to complain about their problems.  Some people want the sympathy.  Our friends confide in us their problems.  Often these “problems” are often sources of stress to them, despite what outside observers think.  Since you choose this couple as friends, you can simply listen to their worries.  I’m not sure they are asking for your money or advice.  You can change topics once this one gets boring.

In today’s world, it seems puzzling that being wealthy means you can’t complain about problems. Being a wealthy doesn’t mean you don’t have feelings or require sympathy. Wealthy people often lose a jobs, but the common response is often “oh well, they have lots of money” (why do they need sympathy or understanding)

Another thing to consider.  Your friends look like they are bad at financial management. Your friends may own several houses, but may not actually have cash in their bank accounts.  Without cash and maxed out credit cards, its may actually be hard for them to make day to day purchases.  I’m not saying you should be paying for them.  In fact, don’t give them money. But he may not actually be able to purchase the shoes.

At the end of the day, they will have to made their own adult financial decisions – either sell some assets, save more, work more, etc.

My friend invited me to a barbecue at his house. The next day he sent me a bill for $50.

Q:

Is this normal?  I'm 32 years old. I've probably been to hundreds of parties/bbq's/birthdays/etc, and I've never been asked for cash ex post facto.

A few facts:

1.     We've been co-workers for over a year. I know him decently well, as we've gone to bars and restaurants with friends before

2.     I did not vomit

3.     I did not break anything

4.     I asked ahead: "can I give you some cash?", and "can I bring any food or alcohol?" In both cases he said "don't worry" and "it's taken care of"

5.     Other people also got charged $50

 

A:

Sounds like your friend is a bit clueless on this one.  General rule is when you invite someone over to your house, you are the host and shouldn’t expect guests to pay.  If the expectation is otherwise, letting guests know before hand – i.e. this is a potluck, or let’s split the costs on this event is usually good form.

It seems as though your friend sees himself as event organizer and not a host.   For example, “I have baseball tickets, I want to invite you to a baseball game” the inviter is clearly a host and the inviter pays.  On the other hand “Let's go catch a baseball game with our group of friends” the asker is an event organizer and the organizer is fine expecting everyone to pay for themselves.  At a restaurant this might be slightly different depending on your social circle’s norms.  I.e. do you go out weekly and take turns paying or do you go dutch? 

I would indicate to your friend your surprise at being charged after the fact and that there seems to be a misunderstanding.   If your friend did intend to host, then point out to him the host usually pays.  If your friend insists on you paying, I would agree to pay, but hold off paying until he requests payment again.  This gives him the opportunity to quietly drop his payment request.

Good friends don’t come by easily.   Each of our friends we like for different reasons. Not all of our friends have to be well mannered, generous, funny, intelligent, good with people etc.  $50 to smooth things out with a friend who sounds like he needs the money might be a small price of this friendship.

Finally in the future, avoid invitations with this friend.  Only go on outings where everyone can easily pay their own way.