Loaning money to friends

[TBH]

Today I saw an old friend for the first time in several years. He surprised me by handling me a fat wad of bills--payback for a loan for more than $500 I made him 15 years ago. When I loaned him the money (to help him out while he was in college) I expected him to pay me back within a few months. He didn't, and I learned my lesson not to loan money to friends. I have given money to friends since then, but only with the understanding that it was a gift.

I'm a little in shock that he paid me back.

Now the question is, what should I do with the money!?

[HappySaver]

What do you want to do with the money?

[kork13]

I'd save half the money, and use the rest to take him & his wife out for dinner & a show. You didn't expect the money, so use it to have some fun & develop your friendship.

[Joan.of.the.Arch]

That must have been a surprise! Had he been acknowledging the debt all along and promising to repay? I wonder if he paid you back the purchasing value of the money he borrowed or only the face value. I bet inflation makes $500 worth less than 2/3 of what it was worth 15 years ago.

Just add it to a savings goal you had. Or if you feel that you had already just made peace with the idea that the money had turned into a gift, then you might like to re-circulate it as a gift to a struggling person you know, to a non-profit that could use your help, to your place of worship, to your local library, etc.

[rennigade]

Thumbs up to your friend. Im sure its been eating at them for a while about paying you back. Maybe it even happened to them...when they became smarter about money/had money to loan, and the strain it can have on a relationship.

[Orange56]

What i'd do is to buy something new to my wife, and surprise her as you're surprised.

In my case, my wife loves cycling, so i had bought a pair of bikes.

[creditcardfree]

That is great the friend paid you back!! Gives me a sliver of hope, that one day my husband will be paid back by a friend he was in business with. I'd do what you would do with any other windfall money? And it doesn't have to be one thing or another, it can be divided. Currently, our goal is to pay down our mortgage, so extra money all goes there.

[snafu]

Wonderful to get paid back after all these years. You give us all hope for sums we've long written off. I suggest adding it to your ROTH.

[TBH]

He actually gave me more than the $500 and took me out for a nice dinner.

I didn't want to say this before because I still feel sort of shocked, but he actually gave me $1000!

When I protested that he was giving me more than he had borrowed, he told me I could do whatever I wanted with the original $500, but he hoped I would do something frivolous with the rest.

He has been sort of laughing it off all these years, not really promising to pay but treating it like a joke. I stopped bringing it up many years ago.

I think I'll put maybe $800 toward savings and use $200 to do something fun. Just not sure what yet. But I like the idea some people have of giving some of it away.

[creditcardfree]

Yes, I like the giving away now that I know some of it was more than you expected or were owed.

[JoeP]

I like the ideas of saving most of it and then giving away the rest. Maybe you could donate to a women's shelter, soup kitchen, or food pantry.

If you think about it, 3 good things came from your action: your friend got the financial help he needed years ago, you received his appreciation and money back, and now you are able to do something with the extra.

[TBH]

Thanks, all!

Definitely going to save the original loan amount, make a big donation somewhere, and do something fun with part of it.

I agree--this was good all around. Mostly I feel glad for him that he has this weight off him now. I really didn't realize it was bothering him all this time. He said he owes another old friend money but hasn't been able to locate the person.

[creditcardfree]

He said he owes another old friend money but hasn't been able to locate the person.

Interesting. The person that owes my husband money can't be located. It was YEARS ago so were not looking too hard. Wouldn't mind having it back though.

[GeorgetteSpurling]

It is really like a gift to get the money returned from a friend. You should invest that money, or start any savings. It will help you when you need money.

[realbankingadvice]

Hello,

Wow, talk about keeping your word. Although it took awhile its great that he was able to pay you back.

I would put away haf of the funds and use a portion of the rest to plan an activity with him

Best of Luck,

Louis