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Question
Posted by: Puzzled | 2012/06/29

bad debts

perhaps CS can help me understand the psychology behind this...why is it that some people would borrow money and find it very easy to forget about paying it back?

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Our expert says:
Expert ImageCyberShrink

Isn't that actually very easy to understand ? Isn't the greater p[uzzle, to explain why most of us, if we borrowed at all, would be keen and anxious to repay the loan as soon as possible ?
As 40ish and Liza emphasize, some people feel frank jealousy towards others who have often worked harder, for longer, and wasted less, so as to have indeed more money than the borrower has.
As in 40ish's example - nobody forced that sister to be a single mother - that was a choice she made, and one which inevitably increases expenses and can reduce earning capacity. There's no reason why people who chose to postpone child-making until they could afford to look after the child properly ought to be punished and fined to support those who chose to be less responsible.
I continue to be surprised at how so many people who lend from family and friends because of debt problems, are lavish in their personal expemnditure - new clothes they can't afford, bottled water when tap-water is fine, only the finest foods, every child must have their own ipad, and so on. They don't see why they should live within their means. Its the dangerous issue of feeling ENTITLED to LUXURIES that often causes problems.
Liza I think 40-ish was quoting a friend, rather than her own attitude. At least I hope so !
Some of us are proud to be independent ; and some haven't the remotest interest in being independent, and want only to collect donations.

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Our users say:
Posted by: 40''ish | 2012/06/29

Cool and yes it does apply.

Reply to 40''ish
Posted by: Liza | 2012/06/29

My apologies for misunderstanding - so please don''t take offense. All I said applies to this friend however!

Again apologies
Liza

Reply to Liza
Posted by: 40''ish | 2012/06/29

I SAID : I HAVE SUCH A FRIEND. i did not say i did it. MY FRIEND DID IT TO HER SISTER. hallooooo

Reply to 40''ish
Posted by: Liza | 2012/06/29

40''sh - Your expectation that your ‘ well-off’  sister should buy you a townhouse is way out of line unless you’ ve done her such a huge favor in the past(like paying her way through school). If she''s that well-off, it''s probably because she knows how to manage money extremely well. In which case most of her money would be tied up in investments anyway. Either that or she’ s living the high life and has a huge bond, car payments, personal loans and credit card debt that she’ s having difficulty repaying and even though she seems prosperous, she’ s is actually broke!

" Why do i need to suffer to pay rent and to struggle?"  Do you really believe that you deserve to get handouts from her so you can live a more expensive lifestyle, just because she has more material possessions than you do?

I''ve got a sister who always expects to be helped out by the rest of the family. She feels that she works hard and deserves all the luxuries she maxes out her credit cards on and takes out loans to buy. Then when she can''t pay her rent, it''s because nursing sisters earn peanuts and since my brother and I are in IT and earning more than her, it''s our DUTY to help out.

Nevermind that I don''t have a car and that I use public transport to save money (she and her husband both have cars). Nevermind that I live in a tiny cheap flat in my landlords'' backyard to save money (she''s renting a nice house in a nice neighborhood for peanuts from an uncle). Nevermind that I was unemployed for 3 years and I''m still repaying the debt I couldn''t repay when I lost my job due to bipolar almost 7 years ago (some of the debt incurred was to help her out!) I''m proud of the fact that I''m completely independent and don''t expect handouts from anyone.

As I''ve said - if you helped her gain this nice expensive lifestyle, then she really should help out. But if you''re just wanting a handout - get some pride woman! Beggars can''t be choosers!

Just saying
Liza

Reply to Liza
Posted by: Liza | 2012/06/29

People rationalize their behavior by believing that the person they owe money to are so much better off than themselves and that the lender doesn''t need the money as much as they do themselves.

The problem with lending money to friends and family is that by the time a person tries to borrow from friends and family, it''s usually because they cannot get a loan or credit from anywhere else - because they already owe too much and cannot service their current debt - nevermind any additional debt they owe to family and friends. This is also usually the kind of person who''s terrible at financial management. They cannot live within their means and most of them don''t even try to.

I''ve got the policy that I don''t lend money to anyone unless I can afford to GIVE it to them - in which case I don''t expect to be repaid. If they do pay the money back it''s a nice surprise. If they don''t - it''s not going to stress me out in the least.

HTH
Liza

Reply to Liza
Posted by: 40''ish | 2012/06/29

I have such a friend. On the weekend I said to her so did you ever pay your sister back the 5k you borrowed. She said what are you mad? She has just gone to Phuket for her 10 year anniversary! She doesnt need it. Also I dont know what is my sister''s problem she has such a huge house and so much money, why cant she buy me (a single mom) a little townhouse? Why do i need to suffer to pay rent and to struggle?

Reply to 40''ish
Posted by: cybershrink | 2012/06/29

Isn't that actually very easy to understand ? Isn't the greater p[uzzle, to explain why most of us, if we borrowed at all, would be keen and anxious to repay the loan as soon as possible ?
As 40ish and Liza emphasize, some people feel frank jealousy towards others who have often worked harder, for longer, and wasted less, so as to have indeed more money than the borrower has.
As in 40ish's example - nobody forced that sister to be a single mother - that was a choice she made, and one which inevitably increases expenses and can reduce earning capacity. There's no reason why people who chose to postpone child-making until they could afford to look after the child properly ought to be punished and fined to support those who chose to be less responsible.
I continue to be surprised at how so many people who lend from family and friends because of debt problems, are lavish in their personal expemnditure - new clothes they can't afford, bottled water when tap-water is fine, only the finest foods, every child must have their own ipad, and so on. They don't see why they should live within their means. Its the dangerous issue of feeling ENTITLED to LUXURIES that often causes problems.
Liza I think 40-ish was quoting a friend, rather than her own attitude. At least I hope so !
Some of us are proud to be independent ; and some haven't the remotest interest in being independent, and want only to collect donations.

Reply to cybershrink

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