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Square 1, here I come

June 24th, 2010 at 01:37 pm

Hubby informed me last night that we are giving $5,000 to his best friend, who needs help to save his house. I get why he wants to do it. They've been friends since age 14, this guy has no family he can turn to, and he is always helping other people out. That said, he's been in way over his head with this house since he bought it. He alwasy had some weird loan situation working and thought he could refinance his way out of a mess. We all know times have changed. His house is in San Francisco, he's put 110k into a renovation.

He needs the money to pay $3800 in property taxes and $1200 to finish off the last little projects. He plans to either sell it or refinance in the next 90 days, assuming it's all done. He says he'll pay us back then.(I'm doubtful. He's assuming he's able to refinance, or that he can make money if he sells it. Both are dubious)

I know it took a lot for him to even ask us. hubby says we should make pay back a non issue. Basically, it's a gift. So, the money has been wired.

I'm not happy about this. That money was our downpayment for a new car, which we need desperately. We have no safe, reliable car to transport our kids.

Plus, we always end up bailing out friends and family who manage their money poorly or with the idea that somehow it will magically all work out okay some day. We are fairly conservative. Saving, no debt, etc. Trying to build up funds to hedge against the unexpected. In reality, that's just made us the people that magically DO make things okay for the people who didn't plan. Ergo, we aren't getting ahead.

This will knock me back 5,000 more on my savings goal for the year, so basically, I'm right back where I was Jan. 1, after 6 months of scrimping. I scrimp. What can't everyone else?

I'm getting really tired of being the bank.

14 Responses to “Square 1, here I come”

  1. gamecock43 Says:

    wow. $5000 loan to a friend!? I have never heard of such a thing. you guys are very generous.

  2. ThriftoRama Says:

    I wouldn't say that. I just think hubby thinks that's what you do for friends.

  3. Broken Arrow Says:

    I think his priorities are misplaced. As important as friends are, family and children are more important than adult friends.

    What's worse, it's causing you to drive an unsafe car with small children.

    And I'm sorry, he INFORMED you that he's doing this? He didn't consult you first?

    So yes, if I was in your shoes, I would be quite upset too. Very upset.

    What kind of car are you currently driving? How much would it take for you to get into a safer car?

  4. Joan.of.the.Arch Says:

    I do think it is best to have some savings which are inviolable except for the people you are immediately responsible for. It took me a long, long time to come to that understanding. If we lived in a different sort of world where karma really did operate and all the others you help take care of always, always did the same for you, then fine. But otherwise, especially having children, I think you have to protect your family first. And I do say this as someone who will loan/give money to family and friends.

  5. Joanne Says:

    Five thousand dollars is alot of money to lend, esp., when you say that you need a new car, and need savings. And you have 2 small kids. Your husband didn't discusss this w/ you? How did he inform you? And, did you know the money was being wired? It's nice to help someome.. but that's alot of money. I'd look into getting my own separate act., to save money in. Was this money from a joint act.? If it wwere me, I'd call the friend and tell him that I needed the money back. Even if it upset my husband. Yr. kids have to come first.

  6. MonkeyMama Says:

    Actually, it is very generous. (Our friends and family know we would be first to help with food and shelter, but beyond that? Situations like this rarely end well).

    I can't imagine $5k would help much when I think of the expense of owning a home in SF. It's like money down the toilet, if you ask me. The intention is good, but the end result doesn't look so rosy. I'd be tired of it too.

  7. creditcardfree Says:

    I agree with the others and my fingers are crossed that he does pay you back. However, this needs to be the end of giving money to friends/family. Your family is the priority.

    Good luck!!

  8. Single Guy Says:

    Man, I can be a bit a male chauvinist, but I would never screw my family over that way. Family should come first. If he needs money, thats what banks are for. If they won't give him money, then that should tell him something. Or he can take an advance from a credit card. Or he can take a loan out of his retirement account. If you didn't have any pressing needs, and a solid job situation then maybe, just maybe, that would be ok, otherwise thats just not right.

  9. ThriftoRama Says:

    To answer some questions:
    Hubby technically asked, but it was clear it meant the world to him to do this for his best friend, whom he considers a brother. I know the guy, and he is a good person, but you know, I had plans for that cash.

    We do still have money in the bank, but I try to hold on to as much as I can for emergencies. Yes, having two kids under two and with the recession and lay-offs at hubby's job, I want to keep as much as possible.

    That said, I had set aside $5,000 for a car down payment. We NEED a car for the family. We drive a 1998 Honda Civic Hatchback (great car, but try getting the kids in and out of that...) with no AC. The "family" car is a hand-me-down 1998 Chrysler Concorde. It is a death trap. The brakes have gone out twice-- once almost killing hubby on his way home from work. Luckily the second time it was discovered in the driveway. We're lucky no one is dead. This car requires serious expensive repairs often and just keeps getting worse. We planned to go car shopping this weekend, but have now postponed it a month so we can save more downpayment.

    It's just frustrating because we play it safe and when our friends/family who magically think things will just work out and don't TCB get into trouble, they come to us because they know we have money. Well, guys, we have money because we don't think things magically happen. Although, they do for our friends because we step in to save them from disaster.

    We aren't going to be destitute, but it's frustrating. I have a to-do list on my house that is long because I feel like we can't afford it, so to give the money to someone who is fingers crossed hoping to sell or refinance to get out of a jam, well it hurts. I could use that money to remodel my basement or get the new electrical system we need. but no... a friend needs it to bail himself out, so it's just gone, and I'll have to save up for another 6 months or year to spend as much on my own house.

  10. Looking Forward Says:

    I agree with many of the other comments. I can understanding lending or even gifting money if the situation was different. It's not, and you need YOUR money just as much, if not more, than your hubby's buddie. I'd be upset too. I hope you get repaid.

  11. baselle Says:

    I'm seriously upset reading your post and comments! You'd think that when DH nearly gets killed himself from his family car that replacing it would come first, no matter how close the friend. Methinks he's selfless in stupid sort of way. I think you will have to have the money fight sooner rather than later. It has to stop. Argue that his safety comes first - he's not going to be able to help anyone if he's dead from bad brakes. You need to have the argument because the only other solution that's going to keep your sanity is going to be hiding the savings account from him. And cover ups aren't good either.

  12. ThriftoRama Says:

    As an update, I did manage to scrounge together about 3200 from various sources to replenish our $5000 down payment for the car. Hopefully we can find/ save the other 1200 this month. The money is gone. The friend already has it. We are not doing this again. And, as much as I really need to be paid back, I think we just threw that money out the window.

  13. Jerry Says:

    Five grand is too much for most folks to send without discussing it together as a couple and coming to a consensus. This can lead to problems later, and the best insurance for a relationship is communication... I hope that the friend is good for the money, but I wouldn't hold my breath. Sorry about such a crappy situation...
    Jerry

  14. whitestripe Says:

    I am just catching up on all your posts, somehow I missed them Frown
    We have given money away too. It sucks when you know you are giving it to someone who put themselves in the crappy situation that they're in. DF and I paid for an emergency ceasarean section for DF's fathers dog who was having puppies and things weren't going well. It was either pay, or lose the beloved family dog and her pups, which our dog had fathered. There was of course no question about it, and we paid the $650 without a blink. DF's dad could have paid for it - if he stopped spending so much money on meals out, gambling, weekend trips away and alcohol. :S

    I had to pay for my best friends groceries one week (though she did pay me back) because she lives paycheck to paycheck each week, and her work was late putting in the wages. I don't think I've ever lived paycheck to paycheck and I don't really understand why people get themselves to a place like that (I'm not talking about when people live paycheck to paycheck because of elements they can't control, like medical expenses etc).

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