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My Friend Borrowed Money But Won’t Pay Me Back. What Do I Do?

Welcome to Taking Stock, a space where we can take a deep breath and try to figure out what the COVID-19 economy really means for our finances. Every month, personal finance expert Paco de Leon will answer your most difficult, emotionally charged questions about money. This year has forced many of us to reprioritize our finances, and there’s no clear road map for getting through the pandemic yet — but Taking Stock is here to help us figure it out together.
This month, we’re talking about why it can feel so nerve-wracking to ask a friend to pay you back. Why does it feel so stressful? Have you ever forgiven a debt your friend owed you — and kept your friendship? Tell us your experience here to be featured in an upcoming Refinery29 story.
Dear Paco,
My friend owes me about $350. It's been a year. We don't talk that often, but we've been friends for a long time, and I have already gently asked them about the money, which is always uncomfortable. They're apologetic and tell me that they're working on it. Money is tighter for them than it is for me. At this point, how do I escalate beyond yet another nudging text? Should I bother escalating? Another friend mentioned small claims court, but that feels outrageously over-the-top.
This issue is really stressing me out, because I want the money back but it feels so unbearably uncomfortable to keep mentioning it. They've picked up drinks or snacks a few times before, so maybe I should count those instances towards the debt they owe me? How do I nudge in a way that isn't accusatory, but comes off as very chill, very friendly, not at all bothered? What if I remind them and they say, "Of course, I'll pay you back ASAP!" and then forget again? I'll just be stuck in this purgatory of awkwardness. Sometimes I just let these things slide, because it feels like the peace is "worth" more than starting this uncomfortable conversation cycle.
I guess my question is as much about money as it is about human psychology: Why does it feel so excruciating to follow up on money a friend owes you? It gives me anxiety-induced stomach aches. I value my relationship with this friend, and $350 isn't an amount that I would absolutely need in order to survive or anything. Do I need to learn to be more assertive? Is it possible to get over the deep discomfort I feel about getting my friends to pay me back?
Dear owed and uncomfortable,
Since you value your friendship and you’d like to get paid back, you need to have an honest yet empathetic conversation with your friend. I know you’re very uncomfortable asking your friend for the money they owe you. But despite that, it's possible to have the conversation without sounding accusatory, where you come off as a chill, reasonable, friendly person who both values their friendship and wants to get paid back. 
Plan your ask in advance
In a perfect world, as soon as you ask, your friend will offer to pay you back in-full, on the spot. But it sounds like they might not be able to afford paying back everything at once. If that’s true, I’d go into the conversation prepared to ask them about a repayment plan. You can start by asking for half now and half in 30 days and negotiate from there. I do think acknowledging what they’ve covered in drinks and snacks with a reduction is a generous gesture that will help keep the tone of the conversation friendly.
Be prepared to stand your ground if your friend insists on paying in-full, but later. Your goal is to get the repayment process started as soon as possible. You can frame the advantages of paying a little each month (or per paycheck) — paying over time makes it more manageable and less of a stressor for your friend.
Rehearse your lines
Get comfortable talking about money by practicing. Rehearse the conversation out loud. Yes, out loud — or even with another person. You’ll feel the discomfort in your body as you say the words, and noticing how you react physically will make it easier when the time comes and not distract you from delivering your message.
The exact way to word the conversation depends on you — and your friendship. I’d say something like, “Hey, so I’ve mentioned this to you a few times already in passing, but I’d like to talk about the $350 I lent you. It’s been a while now, and I’d really like to be paid back, but I also want to check in with you. What’s been going on? Is everything okay?” 
Explore your discomfort
It’s common to feel uncomfortable talking about money, but there isn’t a single, universal reason why. One person might feel uncomfortable reconciling the contrast between the transactional nature of money and the generous nature of friendship. Another person might feel uncomfortable because they feel that not getting paid back is a sign that their friend doesn’t care about them.
Part of being a human on Earth is trying to understand ourselves in different situations. It’s essential to explore why we’re uncomfortable so we can avoid those situations going forward, or learn how to navigate them with grace. Asking yourself the following questions can help you explore the origins of your discomfort. How do you feel specifically when asking for money that is owed to you? Do you think it will seem like money is more important to you than friendship? Are you worried that you’ll be perceived as rude, impolite, or ungenerous? What stories have you heard or situations have you witnessed involving friends lending money and asking for it back? How have these stories impacted your feelings about asking for money back? 
It may take time and a good amount of personal reflection to get to the root of your discomfort, but it’s well worth exploring.
Create personal protocols for future lending
Avoid the same intensity of discomfort in the future by creating personal policies for lending to friends. When you establish rules for yourself for lending out money, it’s a principle that is applied to a situation regardless of who it is, and it can be easier to set boundaries and feel less anxious.
My rule is that I never "lend" a friend money. I will only give them an amount I can afford as a gift. This is a personal rule that works for me. It allows me to be generous within my means while completely swerving the possibility of future collections conversations. 
You might also consider establishing protocols for getting paid back for smaller things, like a bar tab. Sending friends a Venmo while still in their presence as you pay the bill is a simple step to help avoid awkwardness about asking for money. And the app even sends reminders on your behalf, so you can avoid the excruciating follow-up.
Your finance friend,

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