Friends and Finances: Are Your Pals too Close to Your Pockets?

April 11, 2012  |  
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Like marriages, many friendships have met their demise over money.  There’s nothing like an unpaid debt or a business venture gone sideways to make you forget all of the time and emotion you’ve invested into a friendship. It’s usually best to avoid allowing your pockets and your pals to become too close, but inevitably there will come a situation where money may have you and your friends acting funny.  In order to save your hard-earned cash and avoid any hurt feelings, try following these simple rules:

1.  Never lend money you can’t afford to lose.

I’m the kind of friend who will lend a friend a few dollars if I have it to spare.  But never keep your bills balanced on the good word of a friend.  Even friends with the best of intentions may experience unexpected setbacks that could leave you in a panic and your bills are past due.  Make sure you have enough to keep yourself covered in case, for whatever reason, your friend’s promises fall through.

2.  Avoid selling property or vehicles to friends and co-workers.

You’ve got a car you want to get rid of and your friend needs some new wheels.  It’s a perfect match.  Just remember, when you sell your used vehicle you will never hear the end of all the mechanical problems that they feel you’re obligated to fix since you’re their friend.  If you really want your friendship to be over, be their landlord.  It can be very difficult to separate friendship from business and friends will take your business more casually than a stranger would.  How dare you ask them to pay their rent on time, you’re supposed to be better than that.  If you absolutely have to have a contractual agreement with a friend, get everything in writing regardless of how close you are.

3.  Think twice before you charge that vacay to your card.

Sites like Expedia, Travelocity and Priceline often offer great deals on getaways, but usually demand payment in full up front.  It’s all fun in the sun until you return to real life and your buddies don’t want to pay what they owe for their airfare and hotel.  Don’t get stuck paying high interest fees when your friends fail to front the money.  When planning a trip, after presenting your estimates, get money up front or go through a travel agency that will allow everyone to pay independently in a way that’s convenient for them.

 4.  Discuss payment plans before the bill comes.

We often believe that discussing finances with close pals is unnecessary and to some extent, insulting.  Your friendship goes deeper than what’s in your wallet, right?  Wrong.  True friends should be able to maturely discuss who’s covering what cost without anyone catching feelings.  If you’re planning a party, trip or even a night on the town it’s worth having a discussion about who’s paying for the transportation, gas, food and any other incidentals. You don’t want a failure to plan to lead to a falling out.  This way, no one’s catching an attitude or looking crazy when the bill comes.

5.  Be considerate of your friends’ financial situations.

I make it a rule to never assume everyone handles their finances the way I do. I also avoid discussing exactly how much I make; not because I’m sitting on long money or anything but because sometimes people act different when learning what your wallet is working with. I have my personal planner organized with due dates and calculations of what I am spending and saving down to the penny, but it doesn’t mean my friends are doing the same.  I say this, because when I’d get the whim to splurge on a trip or concert, I’d be irritated when all of my working friends couldn’t do the same.  After taking into consideration that we all we’re carrying different debt and different expenses, I realized that mentality was unfair.  Try to make plans that everyone can afford and expect that there will be times when everyone’s pockets are drastically different.

6.  Understand that people spend their money on what they want to spend their money on.

After you take into account that you have no idea what your friends’ expenses look like, try to make a note that not everyone has the same priorities you do.  After college, I found myself resenting friends who had no student loans, but retail jobs where their commission alone made my paycheck look pathetic.  I spent an unnecessary amount of time trying to figure out how they could afford luxury cars when I drove around a midsize sedan whose engine light seem to mock me whenever my funds were low.  I was surprised to learn that some of these same friends where the ones who only enrolled in school for the refund check and when that was finished so were their studies. There were also those who intentionally didn’t marry so that when they applied for public assistance they wouldn’t have to disclose their partner’s income.  We all have different priorities, just because it’s not a priority to you doesn’t mean it isn’t to someone else.

7.  Give because you want to, not because you expect something in return.

You’ve decided to get your bestie that Coach clutch she’s been drooling over for months for her birthday.  So when your celebration comes around you just know that she’s going to come through big, until she presents you with a gift card to Bath & Body Works.  As cliché as it sounds, it really is the thought that counts.  When gift-giving you should truly give because you want to, not because you expect the same in return.   Learn to treat yourself to the things you want most or get some friends who share the same taste or spending habits.

8.  Don’t let your pockets feed into pressure to keep up appearances.

Once you get to a certain age (especially in this economy) you may start to notice that your bills are growing but your checks aren’t and it may mean you have to sacrifice some luxuries and live a bit more humbly.  Nonetheless, there will still be people who will let their account go into the negative all so they can keep up with the Joneses.  They’ll play Marco Polo with the repo man in their Escalade and spend the rent money buying up the bar.   The only person who will suffer from your frauding is you and good credit will get you farther than any name brand ever will.


Toya Sharee is a community health educator and parenting education coordinator who has a passion for helping young women build their self-esteem and make well-informed choices about their sexual health. She also advocates for women’s reproductive rights and blogs about everything from beauty to love and relationships. Follow her on Twitter @TheTrueTSharee.


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