FARGO — A friend borrowed $200 months ago and hasn’t paid you back.
But she shows up to lunch swinging a new handbag.
In the hole or in the black, awkward money situations can be challenging.
“I feel that money is a touchy subject with most people,” says Debby Mayne, an etiquette expert who lives near Charleston, S.C. “It seems as though it creates a lot of conflict. When you can leave money out of the picture, you’re better off.”
Most experts recommend keeping friends and family separate from finances.
Relationships can suffer if someone feels taken advantage of, says Nancy Kvamme, who owns In the Black Money Coaching in Fargo.
She typically doesn’t recommend loaning money to people, but some situations, like debt from medical expenses, warrant an exception.
If a friend isn’t paying you back, Kvamme suggests explaining that the friendship is valuable and you want to know why they’re not paying you back.
“It’s difficult to say no (to borrowing money), but you should consider the relationship, too,” she says.
Sometimes, awkward money situations are unavoidable, but with a few tips, you can learn to gracefully handle any situation.
Mayne’s No. 1 tip is to be nice in any money situation.
“When you smile and handle things graciously, it kind of turns things around and they might pay it forward,” she says.
- A friend asks how much you make or how much your car cost.
People’s fascination with money often stems from assuming everyone else makes more, Kvamme says.
“A lot of people might be living beyond their means,” she says. “You don’t know what they owe on new cars, extravagant houses. You can’t base your thoughts on what people make or save based on ‘stuff’ they have. With credit, you don’t know how much stuff people actually own.”
But disclosing personal finance information can change relationships.
People might feel jealous or expect you to pick up the tab if they know you make more money than they’d thought, Kvamme says.
Avoid the awkwardness by saying you don’t discuss finances or use a general phrase, like you paid average price or the market value, she says.
“Find a polite way of brushing it off, and change the subject,” Kvamme says.
Mayne also tries to change the subject, and if the person is persistent, she has a few responses.
For a nosy salary question, she suggests saying you make “enough to pay the bills but not enough to buy the Lamborghini.”
“That lets people know you have a wit, you’re using humor and basically saying it’s none of their business,” she says.
- A friend or family member asks for a loan.
Only give it if you can afford to lose it, Kvamme says.
“You don’t want to be in trouble, too. Think of it as a gift. That way, if they don’t pay you back, the relationship isn’t ruined,” she says.
Mayne agrees it’s best not to lend money to friends and family, although she’s more likely to help a family member if she can.
“I think it takes a lot of gall for a friend to ask another friend for money,” she says. “Unless you can afford to lose that money, you’re better off sitting down with your friend and saying, ‘Let’s talk about other ways you can borrow money. Maybe you can take out a loan from a bank.’ “
If you lend money, set up a payment plan and have each person sign it.
“A handshake is not good enough when it comes to money,” Mayne says.
- A friend constantly complains about a lack of money but spends it freely.
“Distance yourself from them or explain that they might be better off saving the money for what they really need, like bills,” Kvamme says.
If the person isn’t a close friend, Mayne recommends keeping quiet.
- At dinner you order an appetizer, but everyone else has meals and dessert. They want to split the bill evenly.
Mayne recalls being in this situation many times.
“Before you go out, discuss it. That way everybody knows up front. Avoid it before it happens,” she says.
Servers can typically give separate bills to each patron, eliminating the problem.
- A friend asks you to support their charity, but you don’t have the cash or you give to other causes.
“When people ask me, I might give a small amount or say, ‘I’ve given my charitable contributions already this month, but thank you so much for asking me to donate,’ “ Mayne says. “If you thank someone, it really softens the ‘no.’ “
- Friends want you to contribute to an expensive gift, but you don’t want to spend that much money.
Again, Mayne says to soften the “no” with gratitude.
“Say ‘Thank you so much for including me on this, but I already have an idea of what I’d like to purchase. I appreciate the offer of letting me in on this,’ “ she says. “It’s a gracious way of handling it without saying, ‘Hey I just don’t have the bucks.’ “