Don’t Volunteer to Become a Bill Collector!

Bill Collector

“Lending money to friends with poor money management skills is never a good idea; it turns you into a bill collector. “

-Peerless Money Mentor

A Huge Mistake

Peerless Money Mentor Bill Collector

About three years ago, I made one of the worst financial decisions of my life.  I allowed someone to use my Best Buy card to pay for a television.  When their television broke, they did not have a good enough credit score to purchase one from Best Buy.

That should have been the red flag that stopped me from even considering this dumb move in the first place.  Unfortunately, it wasn’t!

I went ahead with foolishly allowing this person to use my credit card to purchase a television.

See Related Post: From Broke Phi Broke to Financially Woke

Unenforceable Contract

Don't become a bill collector

To make this transaction seem more official, I drew up a simple contract.  Honestly, I don’t even know where I placed this contract.  But it went something like this:

I ______, agree to pay back the loan for the television within two pay periods.  If I fail to comply, I agree to pay any interest due after the no-interest period expires.


Signature: ________

He signed the contract and I thought I could trust him to make timely payments.

Excuses, Excuses, Excuses

When it came time for him to make the first payment, he claimed he had a family emergency to take care of.

But I noticed his family emergency did not prevent him from getting a new sound system installed in his car.

When the next pay period rolled around, I would hear another excuse.  “Man, I gotcha, young grasshopper!  Another emergency has come up.”

He would eventually make two payments of $50 on a $550 television.  After hearing a million excuses from him, I eventually grew infuriated with his BS.  Enough was enough.

The Angry Bill Collector

The Angry Bill Collector

Have you ever spoken with a bill collector?  Sometimes they can be some of the worst people to deal with.  No one I know likes a bill collector.  After months of hearing lame excuse after lame excuse, I totally lost it.

I told him, “Man, you are such a liar.  Miss me with all of the BS.  You suck at managing money; your priorities are out of whack!”

He responded by saying that he was shocked that I would come at him liked that.  “Aren’t we friends?  If you needed help, I would do the same for you.”

Apparently, the message was not shocking enough to shock him into action.  The same old excuses were repeated like a broken record.  To this day, I still have not been paid in full.  I will just have to chalk this up as a tough lesson learned.

Think Twice Before Loaning Money

If you are thinking about loaning money to a friend, I hope this short story has dissuaded you from doing so.  While loaning money to a friend who is in dire need is understandable, loaning money to a friend to purchase a consumer good goes against every basic personal finance principle.  It is a terrible decision. And to master your money, you want to make way more good decisions than bad ones!


  • If a person cannot afford to buy a consumer item with cash, it means that they cannot afford it.
  • When someone loans you money and they do not pay, the other person becomes a bill collector. And who likes bill collectors?
  • The friendship will likely end or never be the same again if the person you loan the money to does not pay you back.


Instead of enabling their television addiction, encourage them to read your favorite personal finance blog!  Be better than me and learn from my mistake!

Community Feedback

What is the dumbest financial move you have ever made?

Have you lent friends money in the past.  If so, what was your experience like?

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Author: Jerry

Jerry is a Business Insider Contributing Writer who is obsessed with personal finance. He believes you can improve your financial situation by applying principles taught by the financial independence community to your financial life.

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