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Friends and Money: How to Handle 4 Tough Scenarios

This article is from our friends at LearnVest, a leading site for women and their money.

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 by have 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 about the 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-hunting for the next month. Sarah bought 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.