Dealing With Financially Challenging Friendships
Poet Ralph Waldo Emerson once said, “It is one of the blessings of old friends that you can afford to be stupid with them.” What’s left unsaid is that many times, it’s the friendship you can’t afford! Some friends can be a severe drain on your savings. If you recognize these people in your life, it can be challenging to know what to do. Giving up a friend is never easy, but neither is the reckless financial habits some of them can encourage. Dealing with financially challenging friendships is a struggle. Here are a few examples of financially dangerous friends and how to handle them.
GOING OUT EVERY NIGHT
It’s great to blow off steam with friends or coworkers at a happy hour every once in a while. The chance to cut loose and catch up after a hard work week is a real treat. The keyword here, though, is “occasional.” Some friends may struggle with that word.
When your friends want to turn every night into an “epic” one and want you to come along to dinner, drinks, movies, concerts, and other expensive outings, costs add up quickly. Even a $20 bar bill every night can drain more than $5,000 out of your savings in a year! Without being rude, what can you do?
First, try suggesting lower-cost alternatives. Instead of drinking at a bar, you and your friends could go running at a park or play tennis at the gym. These are less costly than sitting around with drinks — and they’re healthier options too! If cocktails are the order of the day, look for “BYOB” events that let you have fun without breaking the bank. You can also volunteer to be the designated driver, keeping your friends safe and saving money along the way.
Second, set firm limits. When you go out with the “party animal” in your group of friends, develop an exit strategy in advance. It’s not rude to have one drink and call it a night. Your friends might hassle you, but real friends will respect your boundaries.
THE SALES FRIEND
Watching a friend get sucked into a pyramid scheme or multi-level marketing arrangement can be painful. They invite you for a fun get-together, and the next thing you know, some stranger is selling you expensive Tupperware or overpriced (and perhaps underperforming) nutritional supplements. You know there’s no official pressure to buy, but this is your friend’s new business, and you want to be supportive.
Worse yet, some people get suckered into selling low-quality financial products like high-commission life insurance or annuities. They expect you to trust their financial wisdom because you’re friends. If you do, you could end up hurting your current finances and putting your retirement at risk.
The best thing you can do in these instances is to say “no.” Of course, “no” doesn’t have to be direct. You can be too busy to go to a product party or too broke to buy anything once you’re there. Regarding financial services, be proactive so you can say you’ve got those needs managed.
FRIENDS WHO BORROW MONEY
There’s nothing more heartbreaking than a friend in financial need, and nothing can jeopardize a friendship faster than lending to a friend. Unfortunately, there’s no easy way out of this situation. Just say “no” to friends who ask for a loan.
Dealing with financially challenging friendships doesn’t mean you have to leave them high and dry. You can help your friends in ways that don’t involve a handout. For example, you can tell them about personal loans from Elevate Credit Union. They may not realize there’s an alternative to high-interest credit card debt besides begging from friends and family. You are pointing them toward resources that can help them get out of a bind without harming your friendship.
