All I can do is shake my head at this.

[bjl584]

A friend of mine just sent me a text message asking if he can borrow $50 till he gets paid on Friday. He says he's broke.

The bad part is that he showed me his W2 for 2010. He grossed over $96,000.

I don't get it.

[disneysteve]

I think when people hear "paycheck to paycheck" they assume the individual is low income and that simply isn't true. People at all income levels live beyond their means. How someone earning nearly 100K can not have $50 to his name is incredible but far more common than most folks realize.

[MonkeyMama]

Doesn't surprise me in the least.

Being a tax accountant, people share their personal financial situation with me all the time. Over the years people who I felt sorry for who were really broke - I'd often find they make twice my income. These are all people with six figure incomes.

Anyway, I just talked to someone today who I know pulls $500k per year (maybe more) and lives well beyond his means. I don't know if he's got any retirement or investments to speak of, but he has no cash, a huge interest-only mortgage, leases a car, and most definitely spends more than he makes. I'd have to presume he's got basically nothing.

[GREENBACK]

I find this stuff amazing but not all that surprising as I've known more than a few of these types.

[SnoopyCool]

That's amazing...

[irmanator]

wow, I make a third of that and have money in the bank.

[whey2big4u]

That used to be me when I had credit cards. I was able to get myself tat $2000 suit, but couldn't afford the $40 to put gas in my car. I now make a lot less money and now have the money to put away into a savings or investments.

My advice is to not give him the money it only enables his current spending behavior...remember.... teach a man to fish

[DebbieL]

Originally Posted by MonkeyMama

Doesn't surprise me in the least.

Being a tax accountant, people share their personal financial situation with me all the time. Over the years people who I felt sorry for who were really broke - I'd often find they make twice my income. These are all people with six figure incomes.

Anyway, I just talked to someone today who I know pulls $500k per year (maybe more) and lives well beyond his means. I don't know if he's got any retirement or investments to speak of, but he has no cash, a huge interest-only mortgage, leases a car, and most definitely spends more than he makes. I'd have to presume he's got basically nothing.

Wow I can only imagine what I could do with that kind of income (and it wouldn't involve living beyond my means). Holy cow. Well, you can imagine how much sympathy I would feel for that person if and when the sh!t ever hits the fan for them. Interest only mortgage??? Crazy.

[feh]

Here's an article written by somebody who used to live paycheck-to-paycheck and realized her mistake:

I'm first-generation white collar - Feb. 3, 2011

[Slug]

What kind of interest rate did you offer?

[Mr Nice Guy]

Originally Posted by Slug

What kind of interest rate did you offer?

[bjl584]

Originally Posted by Slug

What kind of interest rate did you offer?

Haha! I actually told him no.

[cschin4]

I think people get caught up in a cycle of upspending. That is why "more money" often doesn't solve anything. When you start to make a little more money, you start raising your standards with each increase. You buy a little bit nicer car, home, stuff, etc than you would have before. Maybe you eat out a bit more often. Maybe you sign up for that cell phone thinking you have money, etc. Before you know it you are on a spiral and you cannot simply just stop the bleeding because you are locked in to contracts and on and on. It will take months or more to back out of the upspent lifestyle to downsize. You cannot do it over night.
As for your friend, I would probably have given my friend $50 if it was a one time thing or ever a period where he was having some difficulty. Or, even go buy him a bag of groceries or whatever. But, you also don't want to set yourself up as his bank either so I get it.

[nick__45]

Originally Posted by bjl584

Haha! I actually told him no.

You just converted a friend to an enemy. This is why I don't text and ignore text message when I received them. First off, it cost me money to receive text so people are on my bad side when they text me. Second, texting has made it impersonal to do personal things like borrowing money. You should delete the text and said nothing.

[bjl584]

Originally Posted by cschin4

I think people get caught up in a cycle of upspending. That is why "more money" often doesn't solve anything. When you start to make a little more money, you start raising your standards with each increase. You buy a little bit nicer car, home, stuff, etc than you would have before. Maybe you eat out a bit more often. Maybe you sign up for that cell phone thinking you have money, etc. Before you know it you are on a spiral and you cannot simply just stop the bleeding because you are locked in to contracts and on and on. It will take months or more to back out of the upspent lifestyle to downsize. You cannot do it over night.
As for your friend, I would probably have given my friend $50 if it was a one time thing or ever a period where he was having some difficulty. Or, even go buy him a bag of groceries or whatever. But, you also don't want to set yourself up as his bank either so I get it.

Exactly. I've known him long enough to know what he would have done with it. I learned my leason once before with him. He was going through a rough time and explained to me that he needed $100 real bad so his electricity wouldn't get shut off. He has 3 kids in the house, so I couldn't let them be without light, heat, etc. So, I lent him the $100. He immediately went to the store and bought cigarettes, then took what was left and blew it all at the bar that night. I was peeved, but he paid me back within a few days, so I never made an issue of it. This time around I just told him that money was tight right now and that I didn't have anything extra to lend him. He was cool with that answer, so that was the end of it.

[cypher1]

Originally Posted by bjl584

This time around I just told him that money was tight right now and that I didn't have anything extra to lend him. He was cool with that answer, so that was the end of it.

Perfect response. You really can't argue with an answer like that. I'd love for someone to try and question my finances if I told them it's a bad time.

[disneysteve]

Originally Posted by bjl584

This time around I just told him that money was tight right now and that I didn't have anything extra to lend him.

I think that is a perfectly reasonable answer if it is true, but you may not always get away with that. That answer implies that if money weren't so tight, you would have lent it to him, which I suspect isn't true and you should let that be known to avoid future requests. I would be much more likely to say, "Sorry but I don't believe in lending money to anybody." Tell him that you value the friendship too much to risk destroying it over money, because that's exactly what would happen if you lent it and he wasn't able to repay it. Even if he does repay it, if you lend it to him and he blows it on cigarettes and beer, you are going to harbor bad feelings about that.

[bjl584]

Originally Posted by disneysteve

I think that is a perfectly reasonable answer if it is true, but you may not always get away with that. That answer implies that if money weren't so tight, you would have lent it to him, which I suspect isn't true and you should let that be known to avoid future requests. I would be much more likely to say, "Sorry but I don't believe in lending money to anybody." Tell him that you value the friendship too much to risk destroying it over money, because that's exactly what would happen if you lent it and he wasn't able to repay it. Even if he does repay it, if you lend it to him and he blows it on cigarettes and beer, you are going to harbor bad feelings about that.

You are correct. It wasn't true at all. It was just my quick fix to getting out of the situation. I'm taking your advice if this issue comes up again. Overall, he's a good guy and a good friend. Money is just a severe weakness for him. I've given up on trying to talk to him about finances, so I just avoid the subject entirely when I'm around him.

[preciouslove]

I've been in your position before too...but my friend wasn't earning as much money as yours but I understand your frustration! I don't lend out to anybody ever because I'm afraid I wont get my money back and it could really ruin your relationships with people! Hope you steer clear of his 'people to lend me money' list next time around...

[DebbieL]

Originally Posted by nick__45

You just converted a friend to an enemy. This is why I don't text and ignore text message when I received them. First off, it cost me money to receive text so people are on my bad side when they text me. Second, texting has made it impersonal to do personal things like borrowing money. You should delete the text and said nothing.

That's a pretty huge assumption don't you think? Why would this person suddenly think of bjl584 as an enemy? I've turned down friends for loans - and they are still friends.