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Money Manners: Help! My Friend Hasn’t Paid Me Back!

Here’s the harsh #truth about friends and money: they don’t often mix well.  Lending money to a pal tends to end badly, with few borrowers paying back their besties in full.

If you’re already in a lending pickle and want to know the best way to approach your forgetful friend and ask for your money back, here are some best practices.

For big loans, ask directly.

If your friend owes you a sum that ends in two zeros or more then that, in my book, classifies as “major” and you have every right to follow up. Your friendship depends on it. A recent study by PayPal actually found that over one-third of people have seen their relationships take a hit over unpaid personal loans. The average I.O.U.? About $450.

Assuming you didn’t discuss any terms when you initially lent the money, your first approach to collecting could go something like this (via email or in person, though email might be better to avoid miscommunication):

“Hey, really happy you came to me to help you out with your [fill in the blank money problem]. How’s everything going with that?

Also, I forgot to ask about repayment. How much time would you like? If you prefer, we can work out a simple payment plan and spread it out over time. Just let me know!”

Hopefully that gets the ball rolling and your friend responds with a suggested plan of action.

As for when to approach your friend, if you’ve never gone over repayment expectations, have this discussion a.s.a.p. If you have already discussed repayment expectations and your friend isn’t holding up his or her end of the bargain, it’s time to make another move – and soon.

Don’t be shy to discuss this with your pal, but do be friendly in your approach. Give the benefit of the doubt. A study in the Journal of Economic Psychology found that friends can sometimes be forgetful after borrowing money. They may even wrongfully assume they’ve paid you back!

After a couple attempts, if you still end up nowhere or hear crickets, this is when you need to decide what’s more important – letting the loan slide, keeping your friendship in tact, and chalking the experience up to a hard lesson learned…or deciding your friendship can’t be saved, that you’re too upset and would prefer to part ways. Either way, we’d understand!

Personal Loans

For smaller expenses, tap an app!

For that time you offered to reserve the hotel rooms in Vegas for all your friends (so you could get the travel rewards!) but now need to get your money back so you can pay your credit card bill…or any other time when friends owe you “social” money for food, activities and cab rides, thankfully now you can bank on technology to remind them.

If your friends owe you money, simply get in touch and request payment with one of these online money tools.

  • Google Wallet – Have a Gmail account? Transferring money has never been easier. Email your friends as normal with the subject and body of the email as you please. Then, click the dollar sign at the bottom of the email. You can request money or pay someone using your debit card. If you don’t have a Google Wallet account, it will prompt you to set it up by adding your debit card information.
  • SplitWise – This app lets you split the cost of purchases or expenses with a family member or friend. Think: an upcoming vacation, shared living expenses or a night out together. You can easily add your friends via their email address or mobile number. Then, you can input the total amount of the bill and the percentage they owe and even attach a picture of the receipt. While it does a great job of keeping track of who owes what, you don’t have the ability to pay directly within the app.
  • Square Cash – If you and your friend have this app, then you can easily request and transfer money between each other. But even if your friend doesn’t have this app on their phone, you can still use the technology to get your money back. Simply send your friend an email with the balance in the subject field and CC: the email address and the body of the email can include whatever message you’d like. Once your friend receives the email, you’ll both be asked to share your banking information to begin the transfer.
  • Venmo – This app is a millennial favorite. So much so, it’s become its own verb. How many times have we heard, “I’ll venmo you.”? It easily allows friends to request money or pay one another through the app. All you have to do is set up an account using your Facebook credentials or email account and then add your bank account information or debit card and you’re ready to go. When you send money using your bank account or debit card Venmo waives the 3% fee. But if you plan to use your credit card, a 3% fee will apply.
  • Splitzee – Trouble keeping track of who owes you what? The Splitzee app eliminates the hassle by helping you manage, track and remind your family and friends what they owe you, all in one place. It’s especially helpful when you have a larger group of people to communicate with. You can create a thread and invite your friends to share in the bill payment. The app lets you set payment deadlines with automatic reminders and there’s an option to even show the group’s progress to hold everyone accountable.

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Bottom line:

Going forward, If we want to be generous with our money – and 66% of young Americans say they’d willingly give money to a friend in need — better to assume our friendly loan is just a gift. It’ll help with the healing process when we never get a dime back. And if you can’t afford the “gift,” then offer to help friends in other ways to ease their financial stress like inviting them over for dinner, helping them network to find a better paying job, or letting them borrow your stuff – not your cash.

Have a question for Farnoosh? You can submit  your questions via Twitter @Farnoosh, Facebook or email at

Farnoosh Torabi is America’s leading personal finance authority hooked on helping Americans live their richest, happiest lives. From her early days reporting for Money Magazine to now hosting a primetime series on CNBC and writing monthly for O, The Oprah Magazine, she’s become our favorite go-to money expert and friend.

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