It’s popular to advise money and friends don’t mix. Each article I researched shared this cautionary statement. Yet money and friends mix all the time. Dinner parties, get togethers, petrol to drive to a friend’s location; weddings, christenings, birthday parties, etc.
Our lifestyle choices impact our friend’s incomes. When we choose to celebrate a birthday at a fancy restaurant for instance, we’re asking them to financially invest. It’s part of the commitment you bestow and expect from friendship.
So why then, are we so against friends borrowing?
In Friends, Chandler continuously lends money to Joey, paying for acting lessons and head shots as well as giving cash for dates, coffee and cable. They helped each other in the same way we expect family to, emphasising the closeness of their bond. By the time we reach our mid-twenties, most of us learn: “I’ll be there for you”, is a mere fable – only a handful of friends stick around when life gets tough.
Years ago, an old friend of mine insisted she pay for our alcohol on a night out. She then paid for our taxi, bought me food and let me stay round hers. She’s cooked dinner for me, added my groceries to her supermarket bill and she’s let me use all her beauty products, even the expensive ones with meagre amounts left. When her university degree finished and she had to move away from her old job, I happily bought her drinks and paid for taxis and meals. Neither of us know what we have spent on one another overall, and it doesn’t matter.
If one of us was struggling, the other helped out. That was a huge deal. It made our friendship stronger – we could fully trust we were there for each other no matter what. I’m sure most of us have great friends we wouldn’t lend to – some opting to never lend at all. While books, films and clothes may be okay, cold-hard cash feels strange. A relationship can end abruptly when money issues arise. That’s why there’s rules to follow when mixing money and friends:
1. Consider the person
Is the friend reliable financially and in general? Do they often help you out or do you usually feel taken for granted?
When an ex-friend of mine moved away, I commuted nearly two hours to visit her. Not only did this waste time, the train tickets from each visit added to an extortionate expense. On top of this, I had to purchase anything I wanted to eat during my stay. I started to become resentful towards her and eventually created an argument after she invited me to an event in her area. Not once did she offer to travel to mine.
A person’s attitude and commitment to your friendship says a lot about how they’ll behave if you lent money to them. If you choose to mix money and friends, make sure you feel good about it. You don’t want to resent a decision to help out.
2. Debate your feelings
It’s not just about borrowing. Anytime you’re asked to do something which involves money, it’s worth debating before saying yes or no. As an example, during my early twenties, I had friends who earned a much higher salary. They frequently invited me to places I couldn’t really afford. As I felt too embarrassed to admit that, I went along and tried to keep up with their lifestyle, spending my income miserably.
Everyone has a different perspective – some think: “It’s only money”, while others believe personal finances should always be personal.
3. Avoid giving what you want back
In the: “I’ll be there for you” fable, all good friends would cherish the value of their friendship and follow through with repayment. Unfortunately, some opt to ignore generosity and make excuses. According to Market Watch, “1 in 3 people would end a friendship” if a friend owed them $100 dollars or less.
It’s wise to lend money that’s not going to affect your daily life. You don’t want to find yourself in a compromising position where you can’t buy something unless a friend gives you what they lent.
4. Sign a contract
Mixing money and friends does mix business, especially if a friend asks for a significant amount. Ensure you have an agreement in writing, specifically noting the dates a friend acknowledges to pay you back. I feel this is a lesson Judge Judy taught me. Money.co.uk has a guideline on what to include in a contract and how to further protect yourself. How you give money can indicate how you’ll receive it. Staying professional with a contract can avoid a friend’s relaxed stance on repayment.
5. Question the expenses beforehand
I’ve seen a few memes on social media where a person is wearing designer clothes and the friend is like: “Where’s my money?”
As it is yours, you get to decide whether your cash is worthy of a person’s plans. But, once you transfer money and set guidelines on reimbursement, you then have to step away. In Sex and the City, when Charlotte gives Carrie her wedding ring to sell, Carrie explains it will take time to repay her. Can you accept a friend going to restaurants and buying new outfits when they still owe you?
6. Contemplate a gift option
If a friend has been in your life for a number of years, keeping up with birthdays and holidays, could you give money as a gift?
This method may stop awkwardness and conflict arising. Plus, it’s a nicer option if a friend feels ashamed asking for a loan.
7. Look at the situation from all angles
I would struggle to ask a wealthy friend for money. When it’s obvious an individual is living comfortably, asking them for help puts an expectation on them, suggesting as they have the means to give, they should simply comply. In the film Friends with Money, Jennifer Aniston’s character Olivia expects her rich friend Franny to pay for a fitness course costing thousands of dollars. Olivia became annoyed when Franny said she needed to discuss it with her husband first.
Before any mixing of money and friends, picture the consequences. You may end up building a closer bond and have a friend who feels like family, or you could be left out of pocket and with one less person to enjoy life with. Whether it’s through attending special occasions or actually loaning cash, friends and money is an unpredictable dilemma.