We talk to our friends about sex, politics and health, yet conversations around cash are still taboo. Here’s how to tackle those tricky situations surrounding money and friends and walk away with your group intact.
We’ve all been in situations where someone doesn’t fancy paying their share of the bar tab, or maybe you’re the one who finds their friends splashing out carelessly, and you feel left behind? Whatever the issue, dealing with it is rarely fun. But it’s not just awkward: not talking about money with friends could be costing you your hard-earned salary and even savings – all because you don’t want to seem confrontational or impolite. To help avert friendship bust-ups over money, we’ve enlisted the experts to explain what to do when confronted with some tricky scenarios…
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Dilemma #1: I lent my friend R500 and they haven’t paid me back.
The solution: No matter how frustrating this feels, take heart from the fact it’s a very common scenario. According to a UK study, 30% of adults say they’ve argued with friends about money, with lending it the main cause. “Ask yourself – do you want the money in that moment or would you just like it if they acknowledged the situation?” says Alex Holder, author of Open Up: Why Talking About Money Will Change Your Life.
Sometimes, just knowing they haven’t forgotten can help you feel better; ask them if it’s OK for you to remind them in a month and follow up then. But if it really is about the money and your resentment is starting to damage the friendship, speak up. “If you don’t ask them, it will just play on your mind and affect your relationship,” Holder adds.
If they can’t afford to pay you back, work with them to come up with a repayment plan. Start by asking: “Would R100 a month be easier, rather than the full amount in one go? I’ll send you my bank details again, just in case you don’t have them.”
If you don’t want to talk to them directly, ask for the money in a text message with your bank details attached. Then all they have to do is make the payment. Another option is to sign up to SnapScan and send a payment request code. “Try to make it as easy as possible for them to pay you back,” adds Holder.
Dilemma #2: If we go on holiday, how can I make sure we all pay fairly?
The solution: No one wants to tarnish a good holiday with arguments over who paid for what. Keep things equal by downloading the Splitwise app before you go. One person creates a “group”. Then, each time someone makes a payment, such as paying for a meal, they enter the cost and who paid, into the app, and tick the names of the people who owe money. At the end of the holiday, the app will work out a split for the group. All you have to do is settle up.
If, on the other hand, you’d prefer to set a budget to start with so costs don’t spiral, try the Goodbudget app, which allows you to create “envelopes” of expenses. Every time someone spends, they log it on the app in the correct envelope and you see the money available in that envelope diminishing – so you know you’re tracking.
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Dilemma #3: When we go out, I often choose a smaller meal and don’t drink but my friends split the bill so we all pay the same. How can I say I just want to pay for what I’ve had?
The solution: Ever seen the episode of Friends with this dilemma? It clues us into a tricky truth: sometimes friends just don’t realise that not everyone has the same budget. The key lesson here is not to wait until the bill comes to tell your mates you only want to pay for what you ate. “Be honest from the start. Unless you say something, you can’t expect them to guess,” says Holder.
“If you have one of those annoying friends who orders 10 starters for the table and an extra round of negronis for everyone, overcome that by going out with cash only. When you order, say you only have a certain amount on you and therefore will only be ordering a small meal. Don’t be embarrassed about putting the cash down at the end. Say, ‘This is all the cash I have, but it covers my food and drink.’”
Dilemma #4: My friends talk about salaries, but I earn less and worry they’ll judge me.
The solution: According to a UK survey, embarrassment is the most common reason why adults avoid talking about money to friends and family (18%), with the feeling that they should be more successful at 13%. “Earning more doesn’t mean someone is more high-achieving or intelligent than you,” reminds Holder. “Some industries simply pay more. You could easily be at a similar level and have a five-figure discrepancy between your salaries. If you love your job more, have more flexibility or good benefits, does it matter if you earn less?”
If you really feel uncomfortable about revealing your salary, you shouldn’t feel pressured to talk about it. “Instead, discuss your work benefits (such as medical aid or discounts), spending habits or personal experiences about money and work,” says Emilie Bellet, founder of The Wallet podcast. “In time, you may feel happier discussing what you actually earn.”
Dilemma #5: I don’t want to miss out on fun with friends – but don’t want to get into debt either.
The solution: When it comes to fun with friends, the FOMO is real – but, says Bellet, giving in to the temptation of doing something you can’t afford is not worth getting into debt for. “Take a step back and make a spending plan first by creating a budget,” she advises. “When you’re paid, allocate your income to bills, essential spending, savings and, finally, fun. Every time you do things with friends, only spend from your ‘fun pot’.”
To overcome peer pressure, she suggests sharing your financial goals with your friends and telling them that you’re trying to save a certain amount within a specific period – say, for a rent deposit or a holiday. “If something is out of your budget, suggest cheaper solutions – you may even find your friends feel the same, but were too afraid to say.”
Dilemma #6: My friend is really bad with money. What should I say?
The solution: First things first, don’t go in with your views and advice immediately. Approach the subject with caution and sensitivity – and only if you feel they’re really suffering as a result. “Instead of implying they’re doing things wrong, ask them if they want to ‘talk’ about money. You could open the conversation by suggesting you need help and asking if they want to be your ‘accountability buddy’ or ‘savings supporter’, for example. You could even ask them to share a savings goal with you,” says Bellet.
This will help them learn from you and discover better ways to manage their money. It also gives you a good excuse to open up a conversation about finances when you feel the need. If you’re feeling a bit uncomfortable, practise what you’ll say first. But don’t judge your friend – and go in with a supportive attitude. “It can take time to change someone’s money mindset because money is a personal thing and we were all brought up with different attitudes to it,” Bellet says.
*Words: Kalpana Fitzpatrick
