Friends and Money: How to Handle 4 Tough Scenarios (2023)

This article isfrom our friends atLearnVest, a leading site for women and their money.

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Friends and Money: How to Handle 4 Tough Scenarios (1)Friends and Money: How to Handle 4 Tough Scenarios (2)Friends and Money: How to Handle 4 Tough Scenarios (3)Friends and Money: How to Handle 4 Tough Scenarios (4)

Have you ever borrowed money from a friend?

How about lent money? Covered the missing $10 in a restaurant check because you couldn’t stand to talk about it anymore?

Friends and money are both big parts of our lives, so overlap is almost inevitable. That overlap, though, can be fraught.

As it turns out, 20% of people recently surveyed byCouponCabin.comhave had “friend break-ups” over money issues, and 31% claim they spend more on friends than vice versa. (Perhaps we shouldn’t have been so surprised, after reading this story aboutthe money mistake that ended a friendship.)

We wondered: What are the different shapes that money issues with friends can take?

So we asked four readers to tell us their stories of friendship and money gone wrong. To avoid even more awkward friend moments, we’ve changed all of their names.Now we hope you’ll share your own.

Sophie: On Being the "Poor" Friend

In my family, it was understood that once I graduated and moved to New York City for my first full-time job, I would be financially independent. I was excited, my parents were expectant, and my college friends who moved to the city with me were surprised.

That’s because they were still getting money from their parents and using that cushion for nights out at clubs with $20 covers and $16 cocktails. Meanwhile, my paycheck barely paid my rent and my bills. “Seriously,” I’d say to them, “I only have $30 to spend this week. Let’s cook and eat at my place.”

But somehow, for my friends, my penchant for “Two-Buck Chuck”—discount grocery story wine decidedly in my budget—wasn’t appealing when weighed against dinners at trendy restaurants. So I found myself turning down invitations. From their perspective, I wasn’t putting much effort into the friendship. From mine, they were valuing their need to go out over spending time with me. It definitely sparked some fights, but it wasn’t so much the money as the fact that we couldn’t understand each other’s perspectives.

Eventually, these friends became varying degrees of financially independent, and now that they have to support themselves, they’re a lot more receptive to Two-Buck Chuck. But although we’re still friends, I feel like their lack of understanding taught me how central money is to relationships. Now, I try to be as sympathetic as possible when they tell me they can’t afford to go out. I might even find the role reversal satisfying—if I weren’t still on such a tight budget myself!

Michaela: On Buying a Friendship

I met Brandi my first year of college, when she lived right down the hall. She was smart, fun—and came from a less fortunate family. Although she was on scholarships, she always held jobs. I, on the other hand, was lucky that my parents could to pay for my education, and provide me with ample spending money. Despite our differences, we became fast friends.

Since she never had the cash to go off campus, I fell into the habit of paying her way at movies, dinners, and anything else. She was conflicted about accepting, but I put it this way: The pleasure of her company was worth it to me. We soon fell into a routine of me treating her to outings, but at some point, the balance shifted from me offering to treat—to her assuming I would pay.

Brandi would call me up and say “Let’s go out, you can pay!” and I disliked it. I felt like I was being taken advantage of. She never tried to repay me in ways she could afford, like making me tea or bringing over chocolates, not even gestures that don’t depend on money. I’m sure she figured an extra $20 here and there didn’t mean much to me, but it did add up. Eventually I avoided hanging out with her, or came up with the cheapest possible way for us to hang out, like chilling in our rooms. I realized I should have been figuring out affordable ways for us to connect all along, instead of setting up the dynamic of my treating.

But then she went home over the summer and had trouble finding work. She called me and said she was living off mac and cheese and was hungry, and that she couldn’t afford a plane ticket back to school. Could I lend her $400? So I did. I felt honored that she trusted me enough to ask, and honestly, liked that I could put a price on what a good friend I was.

She paid back my loan the minute she had the money—it was a large enough sum that she and I both took it seriously.Now, we live in different cities and aren’t as close as we once were. If she needed another loan, I would do it in a second, but I’m glad we’re no longer in a position where I feel like I’m footing the bill for our friendship.

Phoebe: On Freeloading Friends

After moving to New York City two weeks before my childhood best friend, Sarah, I found an apartment and told her that she could stay with me for a couple weeks while she looked for a place of her own. She moved in when I did, and was with me on my first night in the new apartment, both of us on an air mattress.

Another roommate, Tina, bought a couch for our living room, which Sarah slept on while apartment-huntingfor the next month. Sarahbought our first trash can and some roach baits (this was my first NYC apartment, after all) but I couldn’t help feeling she was neither a roommate nor a house guest. She wasn’t cooking dinner once in a while to show her thanks, or outright thanking the three of us profusely. But, a month in, she also wasn’t paying any rent—and didn’t offer to. Meanwhile, each roommate was paying $900 a month.

Then the couch broke—it was $300 from a dodgy neighborhood place with no warranty—and Tina blamed Sarah because she’d been sleeping on it. Between Sarah not offering to replace the couch or pay rent, Tina’s patience ran out. My roommates staged an intervention for me, saying they felt taken advantage of, and asked me to demand rent from Sarah in the hopes it’d incite her to leave. So I asked Sarah to chip in $15 for each additional day she stayed.

She found an apartment and moved out less than a week after I asked for money. Was this just coincidence, or was she only using us for free housing?

I wish the story ended there, but it took Sarah about three months before she finally gave us the $75 from that last week and returned the keys, and she avoided my calls for months (out of anger and shame, I later learned). We eventually made up, but our friendship has never been the same.For me, this incident wasn’t really about money. It was about feeling used—and being caught between my two best friends.

Victoria: On Being the Money-Toxic Friend

I am a money-toxic friend to one of my BFFs, and I feel terribly guilty about it. The worst part is that even though I know I play this role, I sometimes can’t stop myself from doing money-toxic things to him.

I make more money than this person, whom I’ll call B. B is not destitute at all. He has a nice apartment, travels a lot, and is fairly relaxed about small amounts of money. He never hesitates to spot me a tenner for a cab or to tip generously at restaurants. But I also know he’s not saving as much as I am for retirement or emergencies.

Although we seem to spend similarly, I may have more spending money, too.B was stunned one time when I, on a whim, spent $100 on some jewelry. And sometimes, I suggest we go out to restaurants that set us back $50-$100. It’s a lot of money for me, too, but I can make it work. I think those meals put B over, and so he’ll sometimes say he doesn’t want to go to such an expensive restaurant.

I’ve been trying to stop putting him in these situations, partially because I also don’t want to spend tons of money on dinner, and partially because I don’t like being the money-toxic friend. And lastly, because I care about B and his financial health more than I do about fancy restaurants.

Can you relate? We’d love to hear how money has impacted your friendships.

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  • Photo of friends shopping courtesy of Shutterstock.


    What not to say to a financially struggling person? ›

    We put together this list of statements to avoid saying to a friend who's working toward financial fitness, and what you can do instead.
    • “Treat Yo Self.” ...
    • “Our favorite store is having a sale.” ...
    • “Just put it on your credit card.” ...
    • “Maybe you can find another job that pays better.” ...
    • “I can loan you some cash.”
    Nov 26, 2022

    How do you help a friend who is struggling financially? ›

    1. Give a Cash Gift.
    2. Make a Personal Loan.
    3. Co-sign a Loan.
    4. Create a Bill-Paying Plan.
    5. Provide Employment.
    6. Give Non-Cash Assistance.
    7. Prepay Bills.
    8. Help Find Local Resources.

    How do you talk to a friend about money troubles? ›

    Here are some tips to start talking about money with your friends:
    1. #1 Keep all money chats safe and judgment-free! ...
    2. #2 Don't be afraid to ask questions. ...
    3. #3 Communicate your own financial boundaries. ...
    4. #4 Avoid comparison.
    Apr 14, 2022

    When should you stop helping someone financially? ›

    Your offer of help is exhausting your resources.

    If assisting someone else is overtaxing your time, energy, or resources—stop! Even if you agreed to do something, if the cost becomes too great, whether that's financial or emotional, you can back out or adjust how much you can help.

    How do I talk to finances without arguing? ›

    How to Talk to Your Spouse About Money Without Fighting
    1. Start with the dreamer conversation.
    2. Print out an overview of your current financial situation.
    3. Create a common short term goal.
    4. Decide who is responsible for what.
    5. Create a budget.
    6. Create a vision board of your big goal.
    Feb 26, 2020

    How do you stop being jealous of friends who have better financial? ›

    How to stop being jealous of your friends' finances
    1. Understand why you're jealous. ...
    2. Try to practise gratitude. ...
    3. Spend less time on social media. ...
    4. Re-evaluate your relationship with them. ...
    5. Take control of your finances.

    How do you encourage a struggling friend? ›

    Five ways you can help someone struggling
    1. Don't force them to talk. Although it's amazing to make yourself available to listen to someone who is struggling, be aware that they might not want to talk about it all the time. ...
    2. Keep inviting them. ...
    3. Send things that remind you of them. ...
    4. Ask them what they want to do. ...
    5. Offer hugs.
    Sep 28, 2018

    How do you deal with money struggles? ›

    1. Identify the problem. ...
    2. Make a budget to help you resolve your financial problems. ...
    3. Lower your expenses. ...
    4. Pay in cash. ...
    5. Stop taking on debt to avoid aggravating your financial problems. ...
    6. Avoid buying new. ...
    7. Meet with your advisor to discuss your financial problems. ...
    8. Increase your income.
    Aug 26, 2022

    How do I set boundaries with friends for money? ›

    How to Set Financial Boundaries with Your Friends and Family
    1. Define your own financial goals. ...
    2. Set realistic limits. ...
    3. Communicate your boundaries early and often. ...
    4. Have a plan for when people ask for money. ...
    5. Determine how you feel when someone asks for money. ...
    6. Don't feel guilty about saying no.
    Aug 25, 2022

    How do you get rid of a friend in a nice way? ›

    Some options include telling the person directly that you are ending the friendship. Or, you might allow the friendship to fade away by communicating less over time. If someone is violating your boundaries or if you feel unsafe, you might choose to discontinue all communication with them immediately.

    Does money affect friendship? ›

    If you make less than your friends, you may feel less-than; make more and you risk taking on too many financial favors or coming across as out of touch. Nearly half of millennial and Gen Z respondents in a 2017 PayPal survey cited money as impacting a friendship.

    What is the golden rule of finances? ›

    Let's recap: The golden rule is don't spend more than you earn, and focus on what you can keep. Maybe it sounds obvious, but you'd be surprised at how many people don't understand or follow this rule and end up in debt. Look at credit card use as an example.

    What does God say about helping people financially? ›

    Provide purses for yourselves that will not wear out, a treasure in heaven that will never fail, where no thief comes near and no moth destroys.” Jesus looked at him and loved him. “One thing you lack,” he said. “Go, sell everything you have and give to the poor, and you will have treasure in heaven.

    How can you tell if someone is financially unstable? ›

    Here are a few pointers to tell if someone is financially irresponsible:
    1. They Have Not Invested Their Money. ...
    2. They Live Above Their Means. ...
    3. They Have Unnecessary Debt. ...
    4. They Have No Insurance. ...
    5. They Have Little to No Emergency Savings. ...
    6. They Use Their Emergency Fund for Non-Emergencies. ...
    7. They Have No Budget.
    Jul 22, 2022

    How do you resolve family conflict over money? ›

    Try to empathize with them to understand WHY they want the money, WHY it is important to them, WHY they believe it will change their lives for the better. Proposal: Based on what you heard, make a sound proposal, with an open heart. Make sure you are being fair, or perhaps more than fair: generous.

    Is it normal to argue over money? ›

    Jumping right to the big topics

    Once you get comfortable with that, start discussing more long-term goals, or why you each have the spending habits you do. “Then you can start to build a solid money future,” Bressington says. And rest assured, money is one of those normal fights that even happy couples have.

    How do you talk to finances with a friend? ›

    How To Talk About Money With Your Friends
    1. Starting the Money Conversation.
    2. Set Financial Boundaries.
    3. Turn to Your Friends as Resources.
    4. Set Financial Goals Together.
    5. Avoid the Comparison Trap.
    6. Keep All Money Talk Judgement-Free.
    Apr 18, 2022

    Does money bring envy? ›

    Money can bring up a lot of emotions: anxiety, guilt, envy, or even hope. At mindbodygreen we feel that to be truly well, the relationships in your life need to be in balance, and that includes having a healthy relationship with money.

    Why am I so jealous and insecure of my friends? ›

    It's totally normal to experience jealousy in any close relationship, including friendships. It's usually related to our own fears or insecurities, such as the fear of being replaced, abandoned, or betrayed. These negative thoughts can lead to stronger emotions like anger, anxiety and sadness.

    How do you cheer up an overwhelmed friend? ›

    Listen to how they feel

    Having a chance to talk could help them feel calmer and more able to deal with their stress. Being there for them and listening without judging them can help. [My friends can help by] making me a cup of tea, holding me while I cry, making me laugh...

    How do you help a friend who is spiraling? ›

    In addition to listening, one simple way to help someone in the midst of an anxiety spiral is to ask calming questions. Dr. Aslinia suggests: "How are you feeling?"; "What's the worst thing that could happen?"; "Do you have a plan for this?"; and "Tell me what happens next," or "Walk me through your plan."

    What do you say to a friend who is experiencing hard times? ›

    Words of encouragement and strength for a friend

    This crappy time you're going through is making you stronger and I just know you'll get through this. Let me help you build up your strength to feel better. Give yourself grace. You do not have to be perfect right now.

    How do you avoid conflict with money? ›

    Love & Money: Tips to Avoid Financial Conflict
    1. Discuss your money personality. ...
    2. Create shared financial goals. ...
    3. Track how you spend money. ...
    4. Never keep financial secrets. ...
    5. Schedule time to discuss your finances.
    Feb 1, 2017

    What is money dysmorphia? ›

    Mayo Clinic. With this mind, we can reasonably define money dysmorphia as: Dissatisfaction associated with one or more perceived defects or flaws in our finances — a flaw that appears minor or can't be seen by others.

    What is a poor money mindset? ›

    Poor mindset convinces people that their circumstances are fixed and that living paycheck to paycheck is the best they can do. They think that there's not much they can do to improve their circumstances.

    What is a financial bully? ›

    Financial bullying occurs in a committed relationship when one partner uses his or her power or influence to control the other financially. Financial bullies use tactics such as: Making his or her partner feel guilty about purchases. Limiting monthly spending. Making his or her partner show receipts for all purchases.

    What are financial red flags in a relationship? ›

    Such habits amount to what money experts call "financial infidelity." "Things like being overly secretive with your money, lying about spending and refusing to share financial information with you are red flags," Victoria said. Financial abuse can also occur in relationships.

    How do you stop a lazy person from enabling you? ›

    How to stop enabling your loved ones using 6 therapist-approved tips.
    1. Identify your own role in the situation. ...
    2. Express your needs in specific, measurable terms. ...
    3. Love the person, but reject the behavior. ...
    4. Give them a choice where the wrong option has natural consequences. ...
    5. Make sure the other person isn't enabling you, too.
    Jul 9, 2020

    What is financial intimacy? ›

    For those unfamiliar with the term, financial intimacy is when you know about your partner's financial footing and both are comfortable discussing each other's finances. You both are financially compatible and you don't need to hide your expenses, savings or even your credit score from each other.

    How can money issues ruin relationships? ›

    Money problems can cause drama in the relationship, which can lead to it ending. The quality of life will go down if the two of you live in poverty, and not everyone wants that. And if the person doesn't want to improve, or get on the same page, it can be difficult to live with them.

    What is more important than money in a relationship? ›

    Relationships matter more than money. It is not enough to have talent and skills; you must understand the power of building valuable relationships. Relationships matter more than money. In actual sense, people don't lack money, it is relationship they lack.

    What is the proper way to face money? ›

    The currency should be separated into slots by denomination, portrait side up, with all facing in the same direction. The highest denomination should always be on the left, decreasing to the smallest on the far right. Coins should follow the same pattern, with the highest on the left, decreasing to the right.

    What comes first money power or respect? ›

    It should actually be respect first, followed by power, and finally, money, but I guess that wouldn't sound too catchy in a song. The reason why the money, power, respect path is flawed is because typically, when you put money above all, it translates into ego and hatred, not power and respect.

    What should be a person's attitude towards money? ›

    People with a positive money attitude generally spend less than they earn, save for the future, manage their credit, give to others and plan for unexpected expenses. If you have negative money beliefs that are preventing you from reaching your full potential, it's possible to unlearn those beliefs.

    How do you set boundaries with a friend who is struggling? ›

    5 Tips for Setting Boundaries with a Friend
    1. Get help. Talking to an online therapist about how to set boundaries with friends can be a good idea. ...
    2. Express your value of the friendship. Knowing how to set boundaries with friends isn't about hurting feelings. ...
    3. Talk to your friend. ...
    4. Be definitive. ...
    5. Be willing to compromise.
    Feb 4, 2022

    What are examples of financial boundaries? ›

    Some examples of financial boundaries might include:
    • Creating and adhering to a budget.
    • Limiting how much you spend on wants versus needs.
    • Saying no to someone who frequently borrows money.
    • Offering to cover a specific expense for someone, instead of handing over cash.
    Jan 10, 2023

    How do you set boundaries with draining a friend? ›

    Setting healthy boundaries isn't just important in your romantic and family relationships.
    What is the best way to set boundaries?
    1. Take a step back. ...
    2. Be direct. ...
    3. Be honest with yourself. ...
    4. Accept your feelings. ...
    5. Make self-care your priority. ...
    6. Stay strong.
    Nov 27, 2022

    When should you let a friendship fade? ›

    Even if you've been friends with someone for a long time, people can grow apart or no longer put equal effort and care into the relationship. If you can't count on them, or feel like you're doing all the work to maintain the friendship, it's okay to go with your gut and cut it off.

    When should you let go of a friendship? ›

    One 2021 study notes that some signs a friendship has grown toxic include:
    1. you feel anxiety prior to meeting up with your friend.
    2. your friend encourages unwanted or unhealthy habits.
    3. your friend acts in ways that hurt your self-esteem, like mocking you.

    What are the signs of toxic friends? ›

    Toxic friendship signs
    • They disrespect your boundaries. ...
    • They always need something from you. ...
    • They don't take accountability. ...
    • They may weaponize their struggles. ...
    • They make you feel guilty for spending time with other people. ...
    • They dismiss your values. ...
    • They ignore your efforts to be a good friend to them.
    Oct 12, 2022

    Why money ruins friendships? ›

    One of the fastest ways to ruin a friendship is loaning money to a friend. That's because if the friend doesn't pay you back, the friendship is likely over, since the trust that cements a friendship will be permanently jackhammered into rubble.

    What are toxic friends? ›

    “Toxic friendships happen when one person is being emotionally harmed or used by another, making the relationship more of a burden than support,” says Suzanne Degges-White, author of Toxic Friendships. A bad friendship can increase your blood pressure, lower your immunity, and affect your mental health.

    What to say to a friend who is struggling financially? ›

    Lead by example and share your own financial problems.

    Instead of directing and telling someone what they should do, model the behaviour you think would help that person. Share your experiences and challenges openly. Share a story of how you were able to resist buying something you didn't really need.

    How do you respond to someone who is struggling financially? ›

    How to help someone with financial problems
    1. Check your financial privilege. ...
    2. Don't assume that people's money problems are their fault. ...
    3. Don't encourage a friend or family member to spend more than they want to. ...
    4. Lead by example and share your own financial problems. ...
    5. Let them know you are willing to listen.

    How do you talk to someone with a spending problem? ›

    1. Avoid judgment. When you prepare to confront a partner or spouse about their overspending, try to come from a place of understanding instead of criticism. ...
    2. Make the problem real. ...
    3. Don't compare your spending to theirs. ...
    4. Talk to a professional. ...
    5. Set boundaries. ...
    6. Create financial goals. ...
    7. Summary.
    Apr 18, 2019

    How do you comfort someone with no money? ›

    1. Give anonymously. ...
    2. Be clear about financial expectations when you're going out. ...
    3. Be casual about giving them things. ...
    4. Invite them over for dinner. ...
    5. Think of ways to barter. ...
    6. Don't make a loan. ...
    7. Don't give with strings attached. ...
    8. Don't give more than you should.

    How do you say financially unstable? ›

    Here are some alternative phrases that should come in handy if you have to explain your situation or turn down an invitation for financial reasons.
    1. I'm running a little low on funds.
    2. I'm feeling the pinch at the moment.
    3. I'm temporarily in the red.
    4. I'm nearly running on empty.
    5. My resources are a little depleted.
    Jan 8, 2019

    Should you help a friend financially? ›

    Offering financial help can be a great show of care to the people you're close to, as long as you decenter yourself and keep an open mind about what form that aid can take.

    What is the root cause of overspending? ›

    Peer pressure, boredom, marketing offers, credit cards and ignoring petty expenses can lead to breaking your budget, experts say. Overspending will always have a negative effect on your budget.

    What is the psychology behind overspending? ›

    Overspending can happen for different reasons, such as: You might spend to make yourself feel better. Some people describe this as feeling like a temporary high. If you experience symptoms like mania or hypomania, you might spend more money or make impulsive financial decisions.

    What do you say to someone who is struggling with life? ›

    It also covers statements that someone who is depressed might find helpful to hear.
    • Tell Them You Care.
    • Remind Them You're There for Them.
    • Ask How You Can Help.
    • Urge Them to Talk to a Professional.
    • Ask Them If They Want to Talk.
    • Remind Them That They Matter.
    • Tell Them You Understand (If You Really Do)
    Nov 1, 2022

    How do you deal with a poor friend? ›

    How To Include Your Poor & Broke Friends This Summer
    1. Find free or cheap things to do. ...
    2. Talk to your friends candidly about money, and empathize. ...
    3. Offer to pay more than your fair share — or just do it. ...
    4. Give your friends the opportunity to voice their concerns.
    Jul 17, 2018

    How do you know if you are broke? ›

    Broke is living paycheck to paycheck with no savings intact. Broke is being in debt up to your eyeballs. Broke is buying a brand-new $30,000 car because you can “afford” the monthly payments but not having enough in your bank account to cover a $1,000 emergency.

    What amount of money is considered financially stable? ›

    The amount of money needed to be considered financially stable is subjective and depends on a person's individual situation. But generally, having a net worth of $1 million or more can indicate that someone is financially stable or secure and has a good grasp of money management.


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