Written by Christine Sharma
Tuesday, November 6th, 2018
Borrowing money from your friends can be an awkward experience, but it doesn't have to be if you keep track of your debts and pay them back as soon as you can. Being open with your friends about borrowing money can help you manage the money you owe them.
What Qualifies as Debt Between Friends?
Maybe your friend put movie tickets on their credit card and now you owe them $10. Maybe your friend paid for a hotel room for a few people and now you owe your share of the room. Or maybe you asked them for $100 for a reason of your own.
When you borrow money from your friends, there are complex emotional and relationship implications that make it different compared to the process of taking a loan from a bank or using credit. Regardless of the amount of money you borrow, whether it's a small or large amount, you're in debt to your friend and paying it back as soon as possible is key.
Keeping Track of Your Debt
When you keep track of how much money you owe your friends, you'll avoid confusion when it comes time to pay them back. Being open about how much money you owe creates transparency and can help deal with awkwardness between you and the person you borrowed money from.
How you keep track of your debt is up to you. You can track who you owe money to, how much money you owe, and what the money was for in a convenient way, such as making a list on your phone if you owe a few people, creating a shared spreadsheet document if a group of friends owe each other, or writing a note in your planner if you owe a friend or two.
Paying Back Your Debt
So what is the acceptable amount of time to pay back money that you borrowed from your friends? Based on my experience, the best answer is to a choose a date that's mutually agreed upon and to stick to it.
Treat it as you would a loan from a bank. If a formal loan was being drawn up, it would include a repayment schedule. Similarly, there should at least be an informal discussion about repayment when borrowing from friends — so that it's treated as seriously as any other loan would be.
Personally, if I borrow money from a friend and can give them cash or send them an e-transfer immediately, I prefer to do so within an hour or two. If it might take you longer, that's okay, as long as your friend is aware and agrees to it. In these situations, I find it helpful to set a deadline for when I'll pay my friends back, and let them know the deadline I've set.
When you borrow money from your friends, transparency between all of the friends involved is necessary. When you keep track of your debts and pay them back within an acceptable amount of time, not only will you feel organized, but you'll be a reliable friend, and hopefully your friends will follow suit when they borrow money from you.
Borrowing money from your friends doesn't have to be an awkward experience if you manage your debt with etiquette and in an open way.