Balancing Friends and Money; Where to Draw the Line
The issue of money is a touchy/sensitive topic, and one that is often difficult to discuss even with your closest friends. For example, if one or the other person makes more or less money, this situation can lead to one overspending to enjoy more expensive activities – and possibly getting into financial hardship/difficulty. Talking about it is the first step.
San Diego, CA (PRWEB) October 14, 2006
The closest friends are probably those who from high school and college – a time when salaries were nonexistent, all finances were slim and working at the burger shop, earning enough cash to finance a Friday night outing. As many of friends have navigated their way through the work force, the margin of difference in salaries has probably changed based on a variety of factors – such as profession of choice, area you reside in or size of your company.
Some of friends may be making more or less money than others, so how do they avoid the problems that can arise from the touchy subject of money? A little discretion, not making comparisons among one another and open communication among friends is a good place to start.
Stop Trying to Keep Up With The Joneses
In our world of consumerism, Americans tend to measure our own and others’ success through material things and the amount of money we have more so than anything else. Thinking our friends that drive BMW’s and Mercedes are more “successful” than us can be damaging to our self-esteem. In order to rectify this, others spend more than they have to keep up, and to hide from friends that they’re “not as successful” as their friends are. This is something not needs to be rethought.
This behavior is dangerous and could lead to financial ruin. Creating a nice lifestyle for yourself and still spend within the means you have. Trying to buy a car that is more than one can afford to keep oneself floating on the same lifestyle of wealthier friends will only cause significant damage to a financial situation. Money can’t buy love, and the more money you have, the more debt you are in. So those friends may, in reality, not be as financially sound as you are – even if you make less than they do each year.
And what is “successful” anyway? Budgeting money and living within your means – which leads to a happy retirement - is successful. Having a healthy and happy family – that’s successful too.
Say Something
As in every relationship, communication is a key factor to the success of the friendship - especially when it comes to the feeling that you have to “keep up” with your friends who make more money. It is crucial for you to speak up on your behalf and for your situation.
If you cannot afford to go to a fancy restaurant or with your friends on a vacation to Hawaii, you need to say something so they understand. Let your friends know that you would love to spend time with them, but this is not the best time for you to spend $5,000 on a trip to Hawaii. Maybe, try to compromise on a less expensive trip that you would both enjoy and be able to afford. Money is a touchy subject, but most likely, if they are your friends, they will understand.
Stick to Agreements You’ve Made
Although many of us learn from the older generation that money is a subject not to be discussed outside the tight family unit, it is essential to communicate when it comes to dealing with money issues and your friendships. For instance, what if all of your friends decide to chip in for a wedding or birthday gift and you end up paying the whole bill and not being reimbursed. Politely, remind your friends that it was a joint decision to make the purchase. If it was initially agreed upon that everyone would pay a portion of the gift, they will not be offended by this remark and will be happy to pay their portion.
When You Are Fortunate Enough
If you are in the position making more money than your friend, the key is to be sensitive to the situation without making a huge deal out of financial issues. For example, when choosing a restaurant, talk to your friend about your options and decide what you both can afford. Only offer to pay the entire meal for a special occasion, such as birthday or anniversary. You do not want to make your friends feel like they are always going to be a burden or to resent you, when all you wanted was to be polite.
When There Are Loans Between Friends
The general rule of thumb is to only loan to friends you really trust and know that will pay you back. The same is true for asking for loans: know the friend well enough to ask and be able to pay them back.
A good idea when loaning money to friends would be to have something in writing for both parties can agree on. This could be a document stating an exact date and amount to be paid, signed by both friends. This does not mean you do not trust the person to pay you back, it is just a way for both friends involved to know what they are getting into and to ensure repayment without any questions in the future. This is a tricky task to accomplish since it deals with money between friends - but trust and closeness between friends is a must.
Debt-Free America is a non-profit organization dedicated to providing FREE financial services help financially distressed families and individuals effectively manage their personal finances. A financial representative can help with any financial issue you may have.
WHAT:
Dealing with money issues with your friends
WHO:
Debt-Free America
Nationwide non-profit community service organization Offers confidential and professional credit counseling and debt management programs
WHEN:
Interviews are available immediately and ongoing
WHERE:
In-studio or phone interviews with local Debt-Free America counselors
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