I am always want to help people, especially my friend and family. Unfortunately, I do not think the way to help an over spender is to loan them money - you then enable them.

I wish I could lend every struggling person money, but my best thing to do would be to help them manage their finances - teach them how to get out of debt, how to set up a budget, what books to read.

In my opinion, that is more valuable that the actual dough you will lend.

I think that lending money to friends or family can be good if the situation makes sense, but the biggest problem that people have is that they eventually say, "I want all my money back", but don't setup or enforce a payback plan. Make sure you make a realistic plan for the person to pay back money to you. Otherwise, you may want to think about not lending the money out.

• You may not get paid back, and loose the relationship you had with that person.
• You will feel stress and anxiety every time you talk to or see that person and wonder "when will I get my money back"?
• You may actually need that money for a rainy day yourself, and will not have access to your money.
• You come to realize that the person you lent your money to is still spending like crazy, and did not learn from your generous loan.

Someone I knew was having a lot of trouble with his bills. He asked his friend to help out with a loan of about $3000 for a few months. After 3 months, the person who borrowed the money gave back the $3000 as well as some extra money as a thank you. Then he bought tickets to a baseball game for him and and friend and took a trip to see the game, all because he wanted to thank his friend for the loan. After spending all that money on the game, food, hotel, tickets, gas, and so on, the person who borrowed all that money was back in debt within a few months and was having trouble paying bills again.

Take aways ...

The point is, if someone borrows money, make sure the payback plan is realistic and that the person who borrowed the money doesn't go back into bad habits of wasting money, no matter how thankful they want to be.

Think about what is right for you, and think twice before lending out your hard earned money. $$$