The Psychology of Debt: Why Your Friend ‘Forgets’ to Pay You

It’s Not (Always) Malice

You lend a friend £20. They don’t pay you back. You assume they are selfish. But psychology suggests something else: Motivated Forgetting.

The “Pain of Paying”

Behavioural economist Dan Ariely coined the term “The Pain of Paying.” Spending money activates the same regions of the brain as physical pain. When a friend owes you money, their brain subconsciously avoids the topic to avoid the “pain.” They aren’t actively plotting to steal from you; they are actively avoiding the negative emotion of losing cash.

The “Social vs. Market” Norms

Relationships operate on Social Norms (generosity, help). Money operates on Market Norms (transaction, debt). When you ask for money back, you force the relationship to switch from Social to Market. This causes cognitive dissonance. It feels “wrong” to mix friendship with accounting.

The “Ambiguity” Loophole

If the debt is vague (“You get the next one”), the brain will always interpret it in the debtor’s favor. “I bought him a coffee last week, so that basically covers the Uber, right?” (Narrator: The coffee was £3. The Uber was £15. It does not cover it.)

How to Hack the Brain

1. Remove Ambiguity: Use an app to record the exact amount. Numbers don’t lie.
2. Reduce the Pain: Make payment instant. The longer the debt lingers, the more painful it becomes to pay.
3. Keep it Social: Frame the request as “sorting out the admin” rather than “collecting a debt.”

Summary

Your friend probably isn’t a thief. They are just human. Use tools to bypass their flawed psychology.