Difficult conversations with friends can be … well, tough. But often it is the issues you avoid that do the most harm. For most people, money problems are high on this list.
Take it from someone who writes about making money for a living – personal finance isn't the most exciting topic. Additionally, it can be embarrassing to admit that your money situation is not ideal.
But the only way to avoid financial friction in your relationships is to address the problem head on. It won't be easy, but with these handy tips, we'll make it easy for you.
Learn to set limits
One of the most common problems among friends is when one person wants to spend more money than the other person is comfortable with. Limit your friend by explaining that you are on a budget and cannot afford expensive activities as often as possible.
The sooner you have this conversation, the sooner you will feel better about the whole situation. If you hesitate, you may become resentful towards your friend and avoid making plans for the future.
You don't need to tell your friend your exact salary or debt. Simply explain that you will have to spend less eating out, going to the movies, or whatever else you usually do together. Be specific and break it down for them. If your friend is making way more than you or no student loan, they may not realize that spending $ 20 on brunch or $ 40 on concert tickets is a big deal for you.
Your friend may feel uncomfortable suggesting activities for a while because they don't know if you can afford them. Because of this, it's important to suggest inexpensive or free alternatives, like a stroll around your neighborhood, a potluck, or a BYOB night in the park. This step is important because it reiterates that you want to keep the friendship going, even if it means changing your normal routine.
It may seem easier to just avoid hanging out rather than addressing your money problems, but it always backfires. Your boyfriend will eventually think that you just don't want to see him, and your relationship will get worse. Don't let money be the reason you lose a friendship.
Don't assume that your situation is unique
Most of us assume that if you don't talk about money problems, you'll be fine. But that's far from reality – and the Covid-19 pandemic has pushed more people than ever into financial straits.
According to a 2020 survey, 63% of Americans said they lived from paycheck to paycheck. Even your friend who messes with manicures, drives everywhere with Lyft, and just booked a long weekend to Cabo can rely on a credit card to fund all of her expenses.
Bringing up your own financial problems gives your friend permission to be vulnerable and share her own problems. While she's not faced with the same issues, she may have had similar battles in the past.
It sounds clichéd, but speaking honestly and openly about your feelings is the first and most important step when talking to your friends about sensitive financial issues. If your friend is always bragging about their $ 10,000 bonus or judging people who shop at thrift stores, explain how their comments make you feel.
Only make comments that they say directly or in front of you. Don't mention how their Instagram stories or Snapchat posts affect you. It's not fair to ask someone to censor themselves on social media, but it's reasonable to expect a little reluctance when hanging out.
Bring things up early
The sooner you talk about what is bothering you, the better the conversation will be. For example, if your friend asks you to attend their wedding party and you are on a budget, tell them about potential issues as soon as they ask. If you wait until they've already booked the bachelorette party and bridal shower, it may be too late to change anything.
If your college friends are planning a reunion trip to Las Vegas and you're still paying credit card debt, tell them you can't afford it before they book an Airbnb with you in mind. Your friends will likely try to accommodate you when they can, but only if you notify them in a timely manner.
When they owe you money
Lending money to a friend can feel like an easy short-term favor, but many friendships have ended because of an unpaid debt. If your friend owes you money and has made no effort to repay you, the only solution is to talk about it directly.
Don't discuss this through text where anything you say can appear passive-aggressive. Try to meet with them in person or make a phone call if you don't live nearby.
Make it clear that you understand and empathize with their situation. If they cannot repay the full amount now, tell them that you are accepting partial payments. Shame is the number one reason people avoid talking about money, so the goal is to make your friend feel comfortable enough to have an open conversation about debt.
If you do more
If you are the friend who makes more money, navigate money conversations carefully. You never know what a person's real financial situation is like, even if they give you certain details. Don't give money advice to your friends unless they ask for it – or maybe when they complain endlessly about a specific topic.
Don't automatically assume that your friend can't afford something, but be respectful and understanding when they sign out. You may be surprised at what they are willing to spend themselves on – especially if the activity is something they really appreciate
Offer free or cheap activities if they hesitate to suggest alternatives. Even something simple like watching Netflix or cooking a meal together can be as fun as an evening out.
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Zina Kumok (137 posts)
Zina Kumok is a freelance writer who specializes in personal finance. As a former reporter, she has covered murder trials, the Final Four, and everything in between. It has been featured in Lifehacker, DailyWorth, and Time. Read how she paid off $ 28,000 in student loans at Conscious Coins in three years.