Budget 101: No Worries, The Friendly Ah Long Is Here

(How many of us keep a budget and then spend more than we earn and ended up borrowing from Ah Long aka loan sharks? It is not too late to learn the fine art of financial planning – keeping budget, ensuring that our income is enough to cover the expenses, keeping up saving for rainy days and when hard days are in, to learn to cut down on unnecessary expenses and tighten our belts)

P.s. The problem of drafting a blog late at night – instead of clicking the “Save Draft”, I accidentally pressed the “Published” button. This explains why you may have seen a half-completed post in your RSS feeder. Sorry about that.

2011 seems to be a very slow year for blogging. It is not that I am having a writer’s block – I have almost a dozen posts in my mind now but rather, does not seem to have the “urge” to put things down on “paper”. One such example is this post below which I have been thinking about for some time now

This is rather personal but it is a situation we have been in before…

I am pretty sure we have been on both sides of the spectrum at some point in our life. We would have borrowed from someone when times are bad or lend someone when they were in a tight situation. I recall accidentally leaving my wallet in the house one day and I had to rely on my good friends for cash for the day.

Lending money to close friends or relatives is nothing new and is not wrong. It is different from lending money to total strangers on a commercial basis like an Ah Long – you don’t usually impose any of the exorbitant Ah Long interest, the repayment period is very flexible (that money sometimes ends up as free gifts) and no hard feelings when you face them during family gatherings or go out for lunch.

This is because you know them and their family members very well and you trust them deep enough to part with your hard earn money and sometimes forget about it.

Long before I got married and was still young, naive & ignorant, I had to help one of my relatives out on his financial problems. I was still single with very few commitments and made enough to have a reasonable saving at the end of the month and I knew about the problem that my relative was facing.

So when he asked me to take a huge loan on his behalf as he was facing problems getting loans himself, despite major alarms going off all over the place, I did not hesitate much in agreeing to it.

He promised that he will pay the repayments once the loan has been approved. It did not take long for me to find out that I have been duped. He came out with a thousand and one excuses and dishonoured his promises that he made before I agreed to take up the loan for him. Ya, I was that naive and to some extent stupid.

A couple of years after that was a little mess indeed but thankfully it was resolved in good terms by the same relative. It was a good wake up call for me too – it made me a bit wiser and more alert and give them due consideration when someone starts asking for a big load of money. It made me a bit paranoia but that’s ok as there were other positive changes as well (I will post about it someday)

The reason why I am recalling this old story is that couple of months ago, I got a call from a good buddy of mine. He needed some cash very urgently – I know he was doing some part-time business and he was facing the usual cash flow problems. He called me several times before but have been in “getting-in-someone-else’s” financial mess before, I always found some good excuses to say no.

But the last call for money seemed urgent and desperate. I know this ex-colleague very well – we worked together for long years and he helped me at work before. I have been to his house several times and know his family well too. So, when he called me one late night with no other options left, I had to think hard.

On one hand, I had the spare money at hand and I know things were serious indeed and I was ready to give that money but on the other hand, I know my good buddy rather well. He was well known to delay things, don’t usually plan well ahead and somehow I know I have plenty of chasing to do to get back the money. Deep down, I know where I was getting myself into – I gave the money that he requested.

History seems to repeat itself but thankfully this time, the amount is very small and manageable. My friend promised to pay back in a “couple of days”. That “couple of days” however was many months ago. But since I know what I was getting into, I was not really pushing him hard to pay me back. But at the same time, I don’t want him to just “forget” the money that I gave him in good faith, so I do give him a call occasionally just to refresh his memory (as I said, I know him very well).

Now, the real reason I am posting these stories is not that I had to lend someone some money – a friend calls you for urgent cash and being a good friend, you help him – that is fine and admirable. And you allow the flexibility and time for him to pay you back the cash – in part or in whole. I am doing the same thing but what I could not tolerate is the change of attitude after you have helped your friend with his/her problems – you will encounter the “silent treatment”.

He promised to pay me back in a couple of days later but when the day came, he did not call back. A week after that, I called him – he did not mention anything about repaying back. He was telling me about his problems which I silently listened and consoled him.

When I called him one day, he then told me that he is getting a loan from the bank to settle his other debts which included mine. It seems positive but I was not giving it much hope. More than a month later, when pressed for a solution, he said the loan has approved and pending disbursement. Lately, he has simply been unreachable.

The matter is money when it comes to close friends and close family members are secondary (by nature, it is) but it would have been the worth if my friend could have been more honest on his financial situation and do not give the roundabout. By giving that silent treatment and act as if nothing had happened is an abuse of the trust and understanding of a good friend. I just hope that he realized that.

It is ok if he did not have the money to pay back but he should not giving excuses after excuses. Tell me what are his plans to get back on his feet – if he needs more time – I would have been happily granted his request.

I may even assist to look for means to settle his problems. And when he promised something, he should at least keep it – or call up earlier to say that he had tried his best but unable to meet his commitments. That is what I had expected to get but did not in the end. In reality, it is not helping his situation especially if he needs to ask for another favour in the near future.

That is all…