They say money makes the world go round. Who “they” are may not be immediately clear, but most of us can agree that money makes it possible to live. Much has been said and written about finances in romantic relationships, but little is said about the role of money in friendships. As friends, we care for and support one another in times of need; we talk about the most intimate aspects of our lives – yet money can be the elephant in the room even for the strongest of relationships.
At some point in our lives we come to the realisation that we’re not all equal when it comes to finances. This difference can create tension among friends.
No one wants to be the friend who always has to opt out of social events because they can’t afford to do things. At the same time, you don’t want to create unnecessary debt to keep up with your more affluent friends.
If you’re the more well-off friend, you may feel you’re being taken advantage of when you have to foot the bill at most get-togethers.
Forbes magazine recently addressed the issue of how friendships can sometimes sabotage your wallet. American financial wellness expert Patrice Washington says people really need to learn how to say no to their friends and to speak openly about their financial situations.
If you have a friend who constantly borrows money and doesn’t pay it back, learning how to say no can make all the difference.
“I find that it’s so hard for us to say one teeny tiny magical word – and it’s ‘no’,” she says. “‘No, I don’t have the money to lend to you for something that’s due to your lack of planning. It’s not my emergency.'”
If you’re the friend who can’t keep up, then you have to be honest about where you are and focus on fixing your finances.
“What’s more important right now is taking care of that debt and/or saving for that big dream you have,” Washington adds. “If that’s important to you, then you have to make some tough decisions once in a while.”
Open and honest dialogue about money matters may be difficult, but it’s necessary. Personal finance website The Financial Diet has some tips on how to broach the subject of money with your friend. If, for instance, you’re still steaming because you bought your friend an expensive gift for their baby shower and all they gave you was a gift voucher, you’ll have to confront the issue. Here are a few things to keep in mind.
- Don’t be judgemental: If your friend comes to you with money issues, try not to make them feel any worse than they may already feel about opening up to you.
- Don’t be jealous: If your friend has more money than you, don’t let bitterness get in the way of having a candid conversation.
- Don’t count other people’s money: If you’re ashamed that your friends are making more than you, consider that you don’t know about all their expenses.
- Don’t keep financial awkwardness bottled up: When it comes to money, bitterness and shame can cause otherwise great friendships to crumble because people aren’t willing to be open and honest.
Sources: Forbes, The Financial Diet