In a perfect world, finance would never come into play in your relationships. However, money can absolutely drive a wedge between you and family members, friends or a significant other.
If you command a higher salary than your sweetheart, if you have friends who want to get together over a meal that’s simply not in your budget, if you loan a significant amount of money to a family member – these can all be very tricky situations.
Money is a sensitive spot for many people, especially when it becomes an issue in close personal relationships. You may not want to tell your friends you can’t afford to meet them at a certain spot for pricey cocktails to avoid feeling like you’re not keeping up with them.
Perhaps your friend is constantly showing off new designer clothing or the latest electronics. Maybe your significant other constantly pays for dinner dates and you feel badly about it.
You want to help your little brother out by loaning him the money he needs for his car payment, but will you ever see it again?
Moran Law can advise you on several difficult scenarios below:
1. You lent money to a friend, but you haven’t been paid back.
This is one of the harder situations to navigate. You care about your friend and want to help them out in whatever way you can.
If a friend encounters a financial hardship and you have money to spare, you might loan them the amount they need for a bill, spot them on rent or agree to make a purchase for them.
You need to be paid back. While you may be in a better spot financially for the moment, you aren’t a money tree.
But if your friend doesn’t take much initiative on paying you back, you’re in a rough spot. How do you ask to be paid back without straining your friendship?
Firstly, before you enter into the situation, you should never lend more than you can afford to lose. Ideally, your friend will pay you back in full, but if they don’t, you won’t want to be left in a financial rough spot yourself.
If you are going to lend money to a friend, it’s important to be clear about your expectations upfront. Create some terms and come to a clear agreement with your pal.
Try something like, “I don’t want this to affect our friendship. When do you think you will be able to pay this back, and how should we handle it if that date comes and you’re unable to repay the loan?”
If it’s any significant amount, you may want to get the terms you both agree to in writing.
“It’s good to have personal policies
on handling certain situations.”
2. You can’t keep up with a friend’s spending habits.
You want to spend time with your friends, but what happens when they constantly suggest activities you simply can’t afford?
Do you reach into your wallet, grinning while trying to perform quick mental calculations of things you can cut from your budget so you can make your loan payments this month? Do you hide at home? Turn your cell off? Pretend to be sick?
Income discrepancies can create rifts in friendships. It doesn’t feel good to say you can’t afford drinks at the exclusive, ritzy new cocktail bar your friend wants to try.
You don’t want them to offer to pick up the tab, and you don’t want to hold their shopping bags as they rack up expensive items.
Try to suggest an alternate activity that’s free or within your budget. Instead of dining out for the third time this week at an expensive restaurant they’ve been dying to try, perhaps you could visit a museum, have cocktails at home or go on a walk somewhere scenic.
If that doesn’t work, try telling your friend some variation of, “My budget this week doesn’t quite allow for that.”
If you’re comfortable with them knowing certain activities are out of your price range, let them know you love their company but can’t afford to do certain things they may suggest.
3. You ordered an appetizer, but friends want to split the bill.
When dining out with a group of friends, splitting the bill evenly is often the easiest way to divvy up the cost.
But when what you’ve ordered is significantly less expensive than what was on everyone else’s plate, you don’t want to overextend yourself unnecessarily – and you shouldn’t have to.
Try to make it a personal rule to always arrive at group dinners with cash. Stop at the ATM on the way so you’ll be able to contribute exactly what you owe and no more without the confusion of relaying who ordered what and what card which meal will go on.
Another good idea is to ask the server for separate checks when you order.
Though these are only a few of the difficult situations you may encounter when friends and finance mix, it’s good to have personal policies on how you might handle certain situations.
With a little preparation and practice, you can avoid forsaking your relationships over money matters.
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