Tuesday, July 19, 2011

Money Manners

A coworker of mine is constantly forgetting his wallet at home and asking to borrow money. He's great at paying me back. The very next morning he has the entire sum and runs around to find me to make sure he gives it back promptly. I lend to him without hesitation. Which makes me feel guilty when I refuse to do the same for personal friends I have known for years - beause they have never paid never me back. We've all been in these sticky situations - a friend asks for a loan and forgets to pay back, you go out with the girls and are not sure who should pay the tab etc. Short of hiding in a closet for the rest of your life there's no way to get aroud them. Yet you can set boundaries that protect your finances in a polite manner. If your friends really are friends they will understand you can't float them forever, nor would they expect you too.

RULE 1: Know what you are geting yourself into. When your friends call up to invite you to the next summer barbeque make sure you understand the financial arangement. A simple question, such as "Is it potluck, what should I bring?" should ensure you get the run down of how this is going to work. Think it's simple? It's not.

Take the example of a good friend of mine who was told that the host would do the shopping and they would all split the cost later. She assumed they would go to a normal summer barbeque where the kids ate hot dogs and the adults munched on burgers and potato salad. Instead, she entered a world where children were given fancy steaks purchased premarinated at the most expenssive store in town and adults munched (gorged) on every fancy pre-pepared food item under the sun as well as an extensive array of store bought salads and other items. There was also enough food to feed twenty times their group. Her portion of the bill was more than she would pay to take her family out to a fancy dinner. It cost her a lot of savings. However, what could she do? Run away when they brought out the bill? Fake an illness the minute see saw the first steak hit the grill? When you show up unaware of your hosts expectations you have no choice but to go along with them.

If you find out your host is expecting you to show up to such a feast and to foot the bill for it, you then have several options. You can decline to come to the event and host the next one yourself so you are in charge. You can also proffer a suggestion such as "It's so much nicer when we do potluck. Can't we all bring some things and split the cost of the paper goods"? If it is a close friend you can even remind her that "I don't know if that is really something we want to spend so much money on. The kids don't know the difference and we prefer to live modestly int his economy". However, you want to be careful with that approach - if this is the type of friend who is also the neighborhood over-exaggerator and blabber mouth you'll end up with everyone thinking you are behind on the rent and need food donations.

RULE 2: Pay what you owe. We all have those friends who go out to dinner with us and order a five course meal only to take four courses home. When you finish your salad they are calling for the check and then immediately grab it and start splitting it in half. They calmly inform you that your half is 75$. No matter that your salad was 13$. Asking you to essentially pay for their meals for the week or to foot their extravagant taste is not OK. When the difference between what two people order is small or reasonaby close it is easier to just split the bill. When the discrepancy is large you need to nip this in the bud, politely. "I think we should each pay for what we ordered" might be best. Otherwise you will end up in this situation over and over. You might even start ordering large quantities of restaurant food to compete with her - further hiking up the bill. Or you will cease going out with her anymore causing her to be hurt and offended.

RULE 3: Do not stalk people in the name of charity. Supporting charitable institutions is great but asking your friends every week to fork over cash for your latest new cause is not. Mention something once and move on. You never know what is going on in their wallets and pushing them until they feel like donating is a mandatory requirement for continuing this friendship is unfair. Not to mention - if you or your husband is in any way employed by this institution or if you get a cut of the money you bring in (I know several people who are employed as fundraisers for schools with such arrangements) it is downright tacky and rude to push your friends and tell them they should give more. Your judgment is not exactly clear in this situation and neither are your motives.

RULE 4: Do not ask ow much your friend gets paid. Unless you are doing his taxes. It is none of your business. Don't tell them how to spend their money either. I don't care if they just said they can't afford that dress you think would look great on them yet drive a Lexus and eat out every night. Their money is their business and they can spend it as they want. Maybe they really love restaurant food and prioritize it over new clothes. So long as they are not ripping off neighborhood charities, stay out of it. If someone starts asking you about your financial particulars a polite but firm "we don't really discuss our finances in public" should do. Or, try another approach "Why do you ask? Do you need some help working on your budget?" Often people are awkwardly trying to figure out how much they should be spending on things by comparing their salary to yours and your stuff to their stuff. This method is pretty useless but also very common. Dealing with this head on can actually help them out.

RULE 5: If you break it you pay for it. Same goes for your child. If you smash a vase or your child spills all over the rug you need to immediately offer to pay for the repair. It's the right thing to do. Your frind may refuse, but they will be grateful for the offer. And if they do not refuse - do not be insulted. You broke something. You should repair it.

RULE 6: People need to pay you before their name goes on the card of expenssive gifts. This happens to me al the time. We agree to chip in together to go in on a gift. Suddenly people Id o not even know are calling to chip in. The price of the gift goes up The amount I get paid back does not. Various people just don't remember to pay me back. I don't want to feel like a beggar asking for what is rightfully mine. I don't even know some of these people well enough to have their phone numbers. How they got mine is still a mystery. Set rules at the beginning: please pay me at the event or before because I don't know when I'll see you all again. If someone does not pay up, refuse to go in with her again until she does.

RULE 7: Don't skimp at the office, but don't get taken advantage of. We all have life cycle events and our offices often collect cash to give us gifts. However when a new secretary shows up every month, gets married, you chip in 30$ for a gift and they leave the next week things have gotten out of hand. Speak to your supervisor about coming up with an actual office policy on gifts.

Rule 8: Ask for your money back. Before dropping a friend or refusing to ever lend them again you should gently remind them once to pay you back. Often they really have forgotten and are grateful for the chance. So a few weeks after the have borrowed the money remind them before your next meet-up. If they still forget, let it go. But be wary about loaning in the future.

Rule 9: Never be ashamed of your finances. You are managing your budget and doing the responsible thing. If your friends really cannot fathom why you may not want to spend upwards of 50$ on a small backyard barbecue or why you refuse to splurge on their birthday party at the fanciest place in town - which they are hosting but asking the guests to pay for - then maybe they are not really the best friends to have. A good friend is sensitive to others and so should you be. If your friends lavish spending makes you uncomfortable or if the standard of living in your crowd is way over your budget and nobody is willing to bend a little or cut back a drop to include you, you need to think about finding a crowd that is willing to work with you a little. True friends do that. It's not worth going into debt and forgoing retirement savings to hang out with "friends" who won't.


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