Words to the Wise: Don’t Lend Money

lend moneyI recently had a friend do his best to convince me that I was too tight with money. “You need to spend more on people,” he said, “and not worry so much about pinching your pocketbook.” Needless to say, the person he thought I should spend more on the most was him. That’s brings us to today’s Words to the Wise on whether you should lend money and how to let others influence your spending habits.

These days I waffle back and forth between Ben Franklin’s “a penny saved is a penny earned” and the thinking behind Aesop’s story of the miser’s gold. If you don’t know it, the story goes like this:

There was once a Miser who kept the lot of his riches tied up in a big ball of gold, which he kept buried in a secret hole under a tree in the far corner of his yard for safekeeping. Every night and every morning the Miser grew fearful that his gold might not be there, and every night and every morning he would sneak out to the far corner under the tree in his yard, dig up the hole, and make sure the gold was still there. And every night and every morning it always was.

Well, after this had gone on long enough, one night a thief who was passing by, noticing the peculiar behavior of the Miser that night, happened to see where the Miser snuck out to, and observed the Miser dig up the gold. Waiting until the Miser had satisfied himself that the gold was still there and had gone back inside to bed, the thief stole out to the far corner under the tree in the Miser’s yard, located the secret hole in which the Miser had buried his gold, dug it up, and made off with it.

The next morning the Miser went out again to check and make sure his gold was still there. To his shock and astonishment, the secret hole under the tree in the far corner of his yard was empty! The Miser fell back on his feet and started to sob and wail.

A merchant passing along stopped and asked him what the matter was. Upon hearing the Miser’s story, the Merchant asked the Miser, “Well, were you ever going to spend that gold?”

“Nay,” said the Miser, “it was mine to keep!”

“Well then,” said the merchant, “see that rock there?” He pointed to a big round rock not far from the hole and about the size the Miser’s ball of gold had been.

“I do,” said the Miser, wiping away his tears.

“Paint that rock yellow,” the merchant said, “then bury it in your secret hole. You can dig it up every morning and every night, just like your gold, and cover it back up again, just like your gold, and always know it is there, just like your gold. The effect, I assure you, will be the same.”

The moral of this tale of course is that all the wealth in the world isn’t worth any more than a big yellow rock if you aren’t using that wealth for anything. Therefore, keep the old mantra of a penny saved handy, but don’t set it out to be scripture.

It’s good to spend money. Gifts on people, dinners, and little conveniences like a 5-minute taxi ride to save yourself a 40-minute walk are all worth it, especially if they produce more value for you in the long run than however much money you spent on them.

But if people around you start telling you need to spend more, be wary, especially if they’re telling you to start spending more on them. Keep in mind the advice of Shakespeare’s character Polonius, who advises his son Laertes as follows:

“Neither a borrower nor a lender be;
For loan oft loses both itself and friend
And borrowing dulls the edge of husbandry.”

Save that penny for yourself. Don’t be a miser; but don’t be a borrower or a lender either. Don’t lend money to people or let them push you to overspend – listen to your gut. It won’t lead you astray if you do.



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