Lending money to family and friends is a very delicate situation.On one hand you want to help out your loved one, but on the other you don’t want to sacrifice your finances.
Happily, there are a couple of solutions that can make this awkward situation less stressful.
You don’t have to open your wallet to help others. In fact, the alternatives may be exactly what they need to get their finances in order.
Spend Time, Not Money
Are your friends broke because they can’t say no when it comes to girls (or guys) nights out? Sometimes we don’t realise how our finances differ from each other and it can be a source of stress with our friendships.
I’m not suggesting that their overspending is your fault. I’m letting you know there’s a healthy way to keep your friendship.
Instead of paying your friend’s way constantly or avoiding your friend, plan on activities that are low cost or free a few times a month.
Encourage one another to have movie night and potlucks at each other’s places instead of always going out to eat. Look for local museums open nights for free entry and have a night of culture on the cheap.
You’ll have a great night with your friend without breaking your budget.
Share a Financial Goal
Peer pressure can be a bad thing, but it can also be a powerful and motivating force. A great way to help your friend and yourself is by having a fun challenge together. See if you can rally some friends to start a group, sort of like an investment club, but for general finances instead. Don’t call out anyone when forming a team or deciding on a financial goal.
One idea would be a 6 month savings contest among the group. Each of you put $20 to enter and those who make their goals split the ‘prize’ money. Hold weekly get together to track one another’s progress to keep each of you accountable.
Focus on saving a percentage of your money instead of a specific amount if each of your have different financial situations. A single parent may not be able to compete with those with dual incomes.
By keeping it positive, encouraging and practical, you can also avoid tensions developing within the group. The bonus is that even if someone doesn’t win the contest, they’re more than likely have more money in their pocket.
Thoughts on Friendships and Money
This is a sticky subject with several different perspectives. I’d love to hear yours. Have you ever had a friend that you’ve had to bail out or lend money to constantly? Has your friendship suffered due to money? What did you two do to fix it?