Answer: Collecting on debts from friends or family

Questions:

• Have you ever lent money to a friend or family member? Did you find it difficult to ask for your money back? 
• Why do you think it's so difficult for people to collect on their debts from people they know? 
• What do you think are reasons that people do not return items for a refund or correct an overcharge on a bill? 

Click here for the ready-to-go slides for this Question of the Day that you can use in your classroom.

Behind the numbers (from Finder.com):

The No. 1 reason Americans are in the red is because we’re too polite, awkward or embarrassed to ask for money owed to us by family and friends. Nearly 59 million people say forfeited a collective $14.3 billion — or $243 a person — for this reason over the last year.

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Interested in behavioral finance? Be sure to check out these NGPF podcasts:

• Morningstar's Dr. Sarah Newcomb
• Professors Meir Statman (Santa Clara University) and Terrence Odean (Berkeley)

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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