Friend wants me to loan her my inheritance - WWYD?

[TeaForTara]

Just typed this out and it's long - sorry. In a nutshell, I am due to inherit some money, friend has asked me to give her a loan, I am reluctant. Am I just being mean and, if not, how do I say no nicely?

My friend has been through a tough time (divorce etc) but has always been terrible with money. She is hugely in debt - partly because of having to buy XH out of the house but also because of poor priorities like holidays, expensive gifts for DC, out most nights of the week (before lockdown and started again since it ended.) Has had about 4 cars since I got mine.

I am going to receive an inheritance shortly. Not boasting, but I don't need the money right now - I will be investing it for my retirement fund. She thinks I'm very lucky and in a way I am, but In the past I have scrimped and saved to get to this position - I spent years with no holidays, limited socialising, driving old bangers, second hand furniture, charity shop clothes etc.

She is asking if I can lend her some of my inheritance to help her out. I am reluctant. I'm sure I wouldn't get it back as there would always be another crisis. That's not really the issue, though - i would be glad to help her out if I felt that she was doing everything possible to live within her means, but it will stick in my craw if I lend her money and she uses it to take the DC on holiday or similar. Am I just being mean?

How do I say no tactfully? I have offered to help her go through her finances and work out a budget but she declined (fair enough, I wouldn't want people poking through my finances, but then I'm not asking them for a loan.) She's been to Step Change or one of the other help places in the past and had a CVA. Not sure if that's ongoing. I've tried to talk about living within your means but it's just water off a duck's back.

I think the most important thing for you to remember is this in YOUR inheritance. The person who has left this money has given you a gift in recognition of your importance to them. If you think of it that way then I think it will be easier for you to be strong, to protect their memory. If your friend can't see and respect that then, despite her need for cash, I think you need to seriously reconsider your friendship.

I agree with everyone saying no, I agree it’s not going to end well. She has made different choices/ had different experiences etc.

As a good friend what I think you should actually do is speak to citizens advice and find out what her options are for consolidating her debt, declaring bankruptcy etc as that would be more helpful and you can help her find her own solution and take responsibility for her finances. Good luck - very tricky position to be put in.

Part of my job involves conducting commercial credit checks, and I sometimes come up against a business with a CVA.

No way would I let them open a trade account with our company. For us to even consider a small credit limit of £1-2k the CVA would have to be paid in full and then we'd need to see at least three years'-worth of profitable accounts after that, with no overdrafts or loans or anything.

In your shoes, I wouldn't lend her the money.

As others have said, you won't be helping her by giving her money - you will be enabling her - don't do it - she needs to feel the pain and change her behaviour

Say you've been stung before and now have a policy of never lending to friends and family as you've experienced how it can sour a relationship and leave you out of pocket.

No no no no no no no

Show her this thread

You say she's not pushing you , but she obviously knows you very well so it feels like she is trying to manipulate you . If it were me I would stop discussing the inheritence with her at all , you don't need to explain or justify to anybody what you intend to do with it . If she asks again just give a clear no , you don't need to apologise or explain your reasons and it's cheeky of her to even ask or put you in such a position .

It’s very simple, say you would love to help her but you have no pension and need to think of your future and you have seen a financial advisor and will be depositing the full amount in a pension scheme to support you at retirement.

End of.

Whether it’s true or not isn’t relevant, do NOT lend her a penny, your pension will be paying for her holidays.

You don't like to see your friend struggling, but lending giving her money will not solve her problems.

If she still tries to push you for it after you say no, her behaviour tells you all you need to know about how much she values your friendship.

So she earns good money, she's in a lot of debt, and she is rubbish with money. Don't give her anything. She needs to sort out her own finances, you'll just be throwing good money after bad with her.
Invest for your retirement if you don't need it now, or put in in an emergency fund for yourself, no one else. Your relative wanted you to have this not cheeky beggars.

No No No, and why on earth did you tell her that you had inherited something?

There is no way I would. The money is for you to secure your and your children’s future or alternatively to treat yourselves in the present given that you’ve lived well within your means.

You know you are unlikely to get it back and as you say it would annoy you if she carried on being a spendthrift but with your money. It doesn’t sound like she is badly off if she can afford lots of nights out and swaps her car as often as she does. Her financial mismanagement is not your problem. I would have more sympathy if she had been doing all the right things and just had a run of bad luck but as it is I would say you are saving the money for the future or already have plans for it.

Never ever ever

Her priorities are different to yours. She has shown you that already.
Please just don’t.

Like the idea that you have offered to go through with her and help - suggest sticking firmly, unwaveringly with that line.

As others advise well above, just say no, it’s already earmarked
It’s already gone into my stocks and shares ISA.....or

• “an investment product with a lengthy deposit time till you can transfer amounts into your pension” ISA or whatever.

I had to “invent” an investment deadline after a friend was due to return my savings...also living a very different lifestyle to my own!

I would advise against lending it to her as she needs to understand the value of money first and as she's likely just to blow it she'll be back at square one again.
Possible options:

1. You could tell her that there is a clause (covenant) in the gift that means it must remain invested or perhaps in shares.
2. If you do lend some to her get her to sign an agreement and repayment plan with end date and insist on a monthly direct debit. If she baulks at this then you know she's not interested in paying.

Mixing money and friends is not great, you could loose both.

"Aunt Dot always used to say Neither a Borrower nor a Lender be. If I loaned out the money she left me, I would be afraid she would come back and haunt me!"

Sort of lighthearted but makes the point.

Adding my voice to the others with a resounding 'god no don't do it'.

Absolutely not. You won't get it back.

She needs support and advice, not more money to spend freely

OP's already offered suppirt and advice and - not surprisingly - it's been refused

I don't like to see a friend really struggling when I'm comfortable

How is she "struggling" when she's spaffing cash on some spending contest with her ex and has options such as charging rent to provide herself with further income? If she doesn't want to that's her choice - but is IS a choice and it's not up to you to underwrite it

God no but if you want to bung her a cash gift.

If you don't feel strong enough to say no outright, tell her that it's stipulated in the will that it goes into your pension fund so that's where the executors will be sending it directly. You won't actually see any of it yourself.

[quote BSintolerant]I can’t believe the cheek of your friend! I’d be mortified at the thought of asking such a thing. I’d say no - and wouldn’t even elaborate further.

You mentioned that your friend had a CVA but you’re not sure if it’s ongoing. Do you mean an IVA (Individual Voluntary Arrangement) - a CVA is an arrangement for insolvent companies? If she’s got an IVA or is bankrupt she will be listed here: www.insolvencydirect.bis.gov.uk/eiir/[/quote]
Maybe I mean IVA then. It's the thing short of bankruptcy arranged by Step Change or Citizens Advice or something, where she payed fixed amounts to pay off her debts by smaller instalments.

I'm not going to look her up on your link because that would feel like poking my nose into her private affairs and as I'm now resolved (with all your backing) to say no to the loan then it's none of my business.

Tell her that you need to put it in a particular type of account which requires a minimum of £xxx. Whatever amount your inheritance - if it's 100K - then that's the minimum, otherwise you won't have enough when you retire.

I think if she continues to argue, you would be justified in giving her a bit of a lecture about how you did without while she was living it up, and indeed still is living it up, and why on earth would you want to pay for her fun when you're not paying for your own.

Just say no? If you lose your friendship over it, the friendship wasn’t genuine anyway.

So incredibly cheeky of her to pressure you.