Don't Try to Save People

When a friend's problem looks easy to fix with your money.

"Don't use your money to try to save people, because being able to fix someone's problem doesn't make it yours to fix."

Meet Emma. She got access to an $800,000 family trust from her grandparents at 18 and tried to save a roommate who was drowning in debt.

My grandparents were very successful in business, and they set up a trust for me. When I turned 18, I got access to it: about $800,000.

One of my college roommates was drowning in debt. She never asked me for help. I offered to loan her $15,000 to pay it all off. No interest, no fees. The Bank of Emma was open.

I treated it like a real loan, too. She signed a promissory note. We built a payment plan around what she could actually afford each month. I even bought a little receipt book to log her payments.

For about a year, she paid on time every month. Then we both graduated from college, we weren't living together anymore, and it fell apart. Every month she'd call with an excuse, and then eventually the calls stopped coming, and so did the payments. She paid back about half in total. The other half I just gave up on.

The friendship went with it. There was no fight, no blowup. But when a friend owes you money they can't or won't pay back, it gets awkward fast. It's easier for them to just stop talking to you. So she did.

Here's what took me years to say out loud. The mistake was never helping a friend. It was deciding her problem was mine to fix just because I could afford to fix it.

My rule now is: don't try to save people financially just because you have the money. The money gave me the ability to fix her problem. It never made her problem mine. Confusing those two cost me $7,500 and the friendship.

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