Thursday, 7 May 2015

Many people find it hard to talk about money, even with family and close friends.

Whether you're splitting a lunch bill, planning a group vacation, or celebrating your promotion, money issues are impossible to avoid, however. 

Sometimes, it is hard to know what to say, how to disclose or what questions are off limits. And saying or doing the wrong thing can cause awkwardness, arguments and even break up friendships.

Here are some tips to help you navigate seven common situations.

1. A friend asks about your salary

According to a New York Times report, millennials tend to be much more willing to discuss how much they earn than previous generations. Even if norms are changing, it is still your decision whether to divulge your salary.

If you earn a lot more, or less, than your friend, disclosing could prompt a chilly reaction. If you decide you don't want to disclose? A vague answer like "enough to pay the bills" or "not as much as I wish," could be your best response, according to Kiplinger Magazine.

2. "How much did you pay for....?"

If a friend is in the market for the same car you just bought, then you might feel comfortable answering. But sometimes people ask the cost of things out of pure nosiness. You may not want to answer how much your engagement ring or new house cost, for instance. Again, money etiquette experts suggest polite evasion, such as "We really got a great deal."

If the questions persist? Diane Reid, a licensed counselor at the University of Alabama at Birmingham's Employee Assistance & Counseling Center, recommends deflecting with humor. You could joke, "my mother always told me it was impolite to discuss money."

3. You're invited to an outing that is too expensive

Reid recommends being upfront with a friend. Otherwise how will your friend know? A good friend will respect your honesty and wouldn't want you to go into debt.

4. A friend asks for a loan

"Friends and loans don't mix," Reid said. "But that doesn't mean you're not going to be asked, or that you don't want to help a friend out."

If you want to help your friend out and can afford to do so, go ahead, but think of it as a gift. "Chances are good you'll never see the money again, so why not go ahead and give the money as a gift," she said. "This eliminates the awkwardness of having to ask for it back."

What if giving friends the money will hurt you financially? Be honest. "Just say you can't afford to help them out," Reid says. "Tell them, of course, you wish you could." You might also see if there is another (non-financial) way you could help your friend. For instance, perhaps your brother is an accountant and would be willing to give your friend some pro-bono advice.

5. Your friend is always borrowing money from you

Can't remember the last time your friend offered to chip in to pay the bill after a round of drinks? You're not alone. According to NerdWallet, ongoing spending differences may strain your relationships and hurt your financial goals.

So how do you respond to mooches? Experts suggest politely saying no; some also suggest planning ahead by deciding whose turn it is to pay or just asking for separate checks. If it's a close friend, give her the opportunity to change. But if the behavior persists? You might want to re-evaluate the friendship.

6. You just got a big raise and want to share the great news

You're excited and proud. That's natural. But be mindful that your friends may not be enjoying the same success right now. So, don't spell out just how amazingly big your bonus was, and share the news with friends you know will be happy to hear your news, according to Money Magazine.

7. Your friend is too generous

Being treated occasionally by a well-off friend can be fun, but being treated too many times can cause an imbalance in the relationship. Try finding non-monetary, thoughtful ways to treat your friend in return, like pet sitting or making something special for them, Kiplinger Magazine suggests.

All these situations, Reid concluded, are relationship tests. "Good, close friends can find ways to navigate these waters," she said.


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