We’ve all been there, and probably will be again, where money has been lent to a friend as a “loan” only to realise it soon ends up becoming a “gift” resulting in you never seeing the money again. Here's how to get back what you're owed.

It’s a common scenario and one almost everyone has experienced. You share a meal with a good friend and pick up the bill because they’ve left their wallet in the car, they promise to pay you back but somehow never do. Or, you fork out for a household bill and your flatmate manages to forget his contribution.

A survey conducted by On Stride Financial has found that the average Brit is currently owed £329 from friends and family in cash and items and the results found one in two people had lent an item and never had it returned. Despite of the risks of lending, a healthy 67% would lend again to a friend or family member in financial need.

In a perfect world, people would simply pay back the money they’d borrowed in a timely fashion. However, life gets in the way. People forget that they borrowed that £10 for a taxi, or that someone else picked up the tab for those train fares. Perhaps, given the busy lives we all lead, they simply come to believe they’ve squared their debt. After all, another study has shown that friends will intentionally forget to pay it back.

If you’re an everyday lender who wants to collect what they’re owed in a conflict-free way, there are a few ways to keep the peace as well as your hard-earned cash.

 

Out on the town with a friend, how to cover the bill.

One scenario where you could recover the money owed, is the next time you two are going out on the town and the bill for the tab arrives, this is a good time to remind your friend that, it’s time to pay up. Suggest, that it’s only fair for you to sit this one out and the debt will be settled.

If the occasion happens to be in a restaurant and the total is around that of what your mate owes, you could use this to bring up the debt and inquire, “would it be ok for you to pick up the bill this time?” in a gentle tone of voice.

Alternatively, introduce your friends to the convenience of mobile banking app that let you quickly transfer money from one account to another, like Barclay’s Pingit. Anyone can use Pingit, whether or not they bank with Barclay’s. It lets you send and receive money using your smart phone, it’s free and it’s easy to use so there are no excuses not to pay up. 

 

Splitting a trip booking out fairly

If someone close owes you a more substantial amount, why not use a trip together as a chance for them to repay you?

Book theatre tickets, a city break or a rural excursion together and have them pay for the more expensive part of the arrangements. Maybe by forking out for flights or prime seats for a performance, they can cover the deficit.

Take your opportunity to subtly remind your friend of their debt without making a big deal of it: “Oh, if you pay for those tickets, the cost will cover that meal I bought us last week”.

 

Covering the rent and living expenses

Sometimes being owed money can become a problem with real regularity. When you share a home with a partner or friends, the monthly bills present an all too frequent opportunity for IOUs to pile up.

If a housemate has already run up a debt with you and its coming to the end of the month, this the perfect time to remind them that their portion of the living expenses is due plus the £329 you lent them in the previous month.

Avoid leaving a reminder via a sticky note on the fridge or sending a text message, mention it subtly in conversation and say, “Hey, you know what, I’ve been thinking about a way we could both save extra money by tracking the share of expenses” – this is a great place to drop in you found an interesting app called Splitwise, you can create a whiteboard of what they owe you (and what you owe them).

 

Whether your friends are forgetful, skint or just plain mean, outstanding debts can cause real resentment and damage relationships. However you go about reclaiming your cash, for the sake of your finances and your friendships it’s always a good idea to keep things straight. 

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