The golden rules of lending money to your friends

January is the longest month of the year. It officially begins on December 27 the previous year when you take a look at your ATM slip for the first time since December 15 and discover that someone has done a Bosasa on your bank balance. January officially ends on April 30 when you peep out from under the Overdraft Cloud for the first time this year.

It therefore does not require a financial guru to figure out that the month of January sees the most frenetic transfer of undocumented microloans between friends, siblings, extended families and colleagues.

I remember my January from 21 years ago like it was yesterday. I was a high-school teacher and a disciple of the Mano-Oral financial plan - that is, the hand-to-mouth approach. It was two days before payday and I had about R70 between my dignified self and pole-dancing in a Point Road strip club to raise some cash.

My budget plan for the next two days involved R20's worth of petrol and about R30 for two litres of boxed red wine to drown my poverty-fuelled sorrows, leaving me with R20 to splurge on Video Town VHS movie hires and chewing gum.

Enter a colleague of mine, a family man with three kids. Things are bad at home, he laments. The kids will go to bed with only pap and cabbage in their tummies if I don't make a plan, he wails. Since that bastard Trevor Manuel became finance minister, my salary just doesn't cover the whole month, he curses. Could you possibly find the kindness inside your heart to extend me a "small" R50 loan so I can buy some mincemeat and maybe a can of Koo baked beans for my kids, he pleads.

He was so convincing that I felt ashamed that I intended to spend the money on Overmeer boxed wine and my 23rd viewing of Sharon Stone's thigh-parting scene in Basic Instinct. I forked over the R50 while he assured me that I'd have it by the next payday, in February.

That evening, I was enjoying the afterglow of knowing that three children were having mince and baked beans with their pap and cabbage, courtesy of my kindness, when I spotted my colleague inside a pub, a Castle Lager in hand, his head tilted back in laughter so raucous I could see his wisdom teeth from 20m away. I had unknowingly robbed myself to fund another man's beer guzzling.

That experience got me thinking hard about the rife practice of lending cash to friends and family. Many people reckon that money and friends or family should never mix. I think that's lazy thinking. The involvement of money in friendship is as inevitable as death, taxes and the Proteas choking at the ICC World Cup.

I had a friend who didn't have a car in the first eight years of our friendship. I clocked at least 50,000km going out of my way just to transport him. And then one time I asked him to bring my wife from OR Tambo International to my East Rand house. He spent the next five years reminding me of this great favour he had extended to me. That's when I realised that I was just as petty about money as he clearly is.

This is why my first rule about lending family and friends money is not "never". No, my first rule is to never lend anyone an amount I'm not ready to never ever see again. For the record, I never saw the R50 I lent my mince-and-baked-beans friend. That goes for tens of thousands of rands I have lent family and friends over the decades.

My second rule about lending folks money is to never listen to whatever sob story they feed you. There is no reliable method to objectively separate "legitimate" needs and bull dung. So when a cousin comes to me and starts spinning a yarn about the R450,000 payment in her account that Capitec has frozen while the ratification process unfolds … I switch off. I'm not interested.

No-one is likely to ever come to you and say, "Yo cuz. Listen; I saw this absolutely gorgeous Louis Vuitton handbag at a low, low price. Can you loan me R10,000?" But if they did, why should it matter? Why did it matter to me that my colleague needed R50 for beer? Well, if you ignore tiny details such as the fact that I couldn't enjoy my wine and that the money never made its way back …

I'm a freelancer. Now and then, my invoices are not honoured and I end up in a cashflow bind. I have had to ask friends and family to bail me out. This leads me to my third rule: choose your victim wisely.

There is nothing worse than borrowing money from someone and before it even clears in your account, your loan shark is standing on Observatory Ridge with a loudhailer letting everyone within a 10km radius know that you're broke and that he thinks you should just swallow your pride and go for debt counselling.

This weekend is the last opportunity to get back the money you lent friends in January. Remember, if you do not recoup it now you will only get it somewhere between May 1 and the day Jesus comes back. I call this situation the VBS Mutual Bank school of thought.