Always be honest. In the long run that is the only plan that is sustainable. Perhaps be being "the nice guy" you didn't make your feelings about her clear, and left her wondering what you really intended? Avoid dissing the other guy. Don't mention him. Her relationship with him is not your business. Your relationship with her is your business and the only thing you have the right to influence. Be honest with her and live with her decision. good luck, wenda.
