Balancing Family, Friends and Finances

By , by Amanda Greene, of Woman's Day

They say that friends and money don’t mix—and for good reason. Finances can turn relationships sour on a dime because “there are power and etiquette issues involved,” says Laura Rowley, personal finance expert with Yahoo! Finance. “The way that you handle money can trigger a lot of emotions in terms of how you see yourself in the world.” Because of how tightly feelings are intertwined with finances, people often don’t speak up because they don't want to be seen as cheap or ungrateful, which can lead to resentment and possibly ruin the relationship. But you don't have to suffer in silence anymore! Whether your friend is a notoriously bad tipper or you aren’t sure how to ask your colleagues to contribute to a charitable cause, below are 10 common cash clashes with etiquette advice on how to settle them.

Your brother wants to borrow money, but he never paid you back the last time you lent him cash.

“If you’re going to give money to a family member, you have to think of it as a gift, and accept that you may never see it again,” says Rowley. “Loans that are never paid back can destroy relationships.” Not ready to part with your cash forever? In that case, Rowley recommends handling the loan in a more professional manner by using a service like, which helps you create a legally binding loan agreement, or, which lets you document and track your loan. However, if you’re simply not comfortable lending money to a relative, your best bet is to just be honest. “Rather than just saying 'no' and risking resentment, give him a concrete reason that you can't help him out. Say that you’re saving for your kids’ college fund or are earmarking the cash for groceries.”

And if the deal has already transpired? Rowley recommends picking a time when money will change hands—like while you’re getting coffee together or are out to dinner—to remind him about the loan. When the check arrives, consider saying something like, “Since I lent you $20 last month, why don’t you pick up dinner? Then we’ll be even.” When larger amounts of money are at stake, consider writing an email so he can save face in case he forgot about the loan or isn’t able to pay you back right away.

Your friend always chooses restaurants that are out of your price range.

We all have that friend with extravagant taste—and a paycheck to support it. But what if you can’t keep up with the fancy dinners and expensive outings? “Be a connoisseur of free events, so you can offer a few creative countersuggestions,” Rowley advises. If your buddy wants to get drinks at a swanky bar, suggest meeting there at happy hour when drinks are less expensive. Or recommend a free event that's on par with her interests, like a gallery opening or free concert in the park. If it's a really good friend, just be honest: Tell her you can't afford to pay top price for cocktails this week and suggest a less pricey bar. And let her know that she can choose a fancier pick at a later date when you're not having cash-flow issues.

Your work friends all want to go in on a gift together, but no one can agree on a fair amount to contribute.

In this situation you want to take control and be the money collector, says Rowley. Decide what you’d like to contribute, spread the word and welcome everyone else to chip in as much as they’d like. “But you have to decide that you won’t be resentful of people who give more or less than you did.” If you’d rather settle on a more uniform contribution, send out an email asking everyone privately what range of amounts they’re comfortable giving, suggests Lizzie Post, spokesperson for the Emily Post Institute. “Once you’ve collected the high and low end of everyone’s budget, you should be able to figure out something that will work for everyone.”

More money etiquette tips!

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Do you follow any of these money etiquette tips? If so, which ones?

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My good friend has borrowed money and things from me and have never been reimbursed. I stopped doing it and obviously she stopped talking to me. In all the years since we have known each other (1994 to present we have never been invited to their house for anything, yet our place is the one everyone comes to for all occasions. Report
It may sound harsh, but due to past experiences I must agree with Coral, I am not a bank. I don't ask for money, so I expect to not be asked for any. Report
Been burned. Be careful who you lend it to and for what. Report
I'm actually a pretty straight-forward person, so I don't have these problems. I have no friends or relatives that do this because I drive away the moochers with my "no". I'm sorry, if I don't have the money, I don't have the money. This is also one of the reasons I'm debt free. Report
I have seen money issues cause so many problems between family and friends. The drama is crazy. I prefer to live my life drama-free. If I need money, I go to the bank for a loan, or tough it out until the next paycheck, and I expect other people to do the same.

However, when it comes to things like drinks and dinner, I will treat friends and family, and they will treat me back, and it all seems to work out in the end, but when I treat someone, I do not have expectations from that person to be treated back. We all get eachother's backs at one point in time and that's what good friends are for. Report
:) Report
When I was in high school, one of my friends used to say "let's spend $15 on each other for holiday gifts." It sounds weird, but I actually appreciated the honesty. I think most people are grateful when someone makes the first move in terms of speaking out about money -- most resentment breeds from someone not wanting to speak up. I've had friends say "I just ordered a salad, so I'm just going to pay my share." I've also said and had people say "It looks like everyone's meal was about the same price so do you want to split it?" or "Hey, I'm on a budget, do you want to just grab something quick at [insert inexpensive place here]" The only time money has really been an issue is when someone sat silently steaming about it. Report
Ooof. I'm sure this blog is going to get lots of responses. This is one touchy subject.

Sometimes I've considered the money 'lent' to my daughter as a gift, but other times, we've set up loan repayment schedules. Thank goodness she no longer needs loans from us. Any other family members, it was considered a gift. My husband used to help his mom pay her taxes or oil bills, but she always gave her other son - the son who borrowed lots of money from her and didn't repay it - the credit for helping her. Gee, thanks.

We stopped eating out with certain friends because of money issues. Sometimes it was because the friends would order the most expensive items on the menu then casually 'insist' on splitting the bill. Another friend resented it if we offered to put the total bill on our credit card and have them pay their share - JUST their share - in cash to us - like we only went out to dinner to get his money or something. We stopped eating out with him.

People get truly weird when it comes to money. My motto: pay your own way for everything and be beholden to no one. Report
If a famly member or anyone does not return the favor, they will no tbe able to borrow again until the initial amount is paid. I am no one's bank and do not work for them. At work, we determine how much or what the gift is and do the math; which includes the card, gift wrap or bag or whatever additional items are need. When going out to eat, purchase the appetizers and make them into a meal. Report
I treat family loans as gifts or set parameters for larger sums. Report
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