Money and friends: what’s the etiquette?

By Bryna Howes 26 November 2019 5 min read

There’s a Jennifer Aniston movie called Friends With Money that explores the trials and tribulations a friendship group goes through when some of the friends have solid earnings and assets, while some of the other friends make a pittance.

Have you been there? Most of us have been there.

These problems tend to start as we enter our university years. Some people are fully supported by their parents through university. Others have to rely on Centrelink, casual jobs, or a mix. Some of us don’t go to university and enter the workforce. Whatever the situation, the outcome tends to be that we are all juggling different wads of cash.

A few years later, things escalate further. Most of us are dealing in careers, not jobs, at this point. Our earning can skyrocket; fluctuate; waiver. Your boyfriend might get a “sign on bonus” while you’re struggling to make ends meet. Another friend might be saving to go travelling, while you want to celebrate your pay rise with fancy champagne.

And let’s not forget what comes next. We start to save for houses while other friends have children. Some of us use our annual leave to take round-the-world trips, while others of us are struggling to build businesses or grow a freelance career.

So, the question is, how can we be our best financial selves and live our best financial lives while supporting our friends in their quest for the same? Let’s discuss.

1. Talk about money.

The first step might be the hardest step, but it might also be the most important.

You need to talk to your friends about your money sitch.

Let’s say your friends love going to dinner every Friday. Each week, someone picks a new restaurant. You get the pricey set menu. The wine is freely flowing. But you — you — are struggling to keep up with the ongoing costs of this Friday night dinner club.

Of course, they don’t know this because you’re oh-so-quiet about the situation.

What would happen if you told them?

Well, they might scoff, wonder why you’re so bad with money, downplay your situation, mock you behind your back, offer to pay in a passive aggressive manner, give you not-so-subtle savings tips, or stare you down when you order a glass of red wine.

But they’re your friends, so maybe, just maybe, they’d understand you.

By being open about our financial situations — whatever they might be — we are starting a conversation that needs to happen. We are asking for compassion and understanding and also suggesting that we can be compassionate and understanding in return.

Who knows, maybe another friend is struggling to keep up.

The short version: Be open and honest with your friends about money. Trust they will understand. And make it clear you’ll do the same in return.

2. But don’t be nosy for the sake of nosiness.

We believe in being open and honest about money — but for the right reasons.

The point of starting a conversation about money is so that we can be aware and sensitive. If you want to ask a question — who paid for their holiday, where does their money come from, how do they divvy up rent payments with their partner — consider your motives first.

Are you asking out of curiosity?

Or are you asking because you have a genuine need to understand?

Maybe you and your partner are moving in together and you’re running an informal poll among friends so you can make an informed decision for yourself. That’s okay! You’re asking for the right reasons, so all is good in the hood.

On that note, though, if your friends don’t want to answer your questions, don’t be offended. Revert back to coming from a place of understanding and compassion and understand their desire to keep their money situation to themselves.

The short version: Always consider your motivations when starting up a conversation about money and respect your friends, whether they do or don’t enter the conversation.

3. Be your best self when it comes to borrowing and lending money.

There’s always one.

That is, there is always one friend who borrows $20 from you because they forgot their wallet or their bank card doesn’t work — and then they don’t pay you back. And then you enter this limbo where you want to ask them to pay you back, but you don’t want to appear a nag, but you need the money, and why don’t they understand that it’s the right thing to do?!

Both lending money to friends and borrowing money from friends is tricky business. It must be handled with care. So, let’s all agree to abide by a few common guidelines.

To start, if you need to borrow money from a friend, don’t be offended if they say no. That is their prerogative and it’s not up to you to question it.

If you do borrow money from a friend, pay it back as quickly as possible. Also, remember, it’s your responsibility to pay it back. Your friend shouldn’t have to chase you down for it.

If you lend money to a friend, be clear about your boundaries (if you have them). If you expect to be paid back within a week, say so. If you expect regular payments, say so. It’s best to get everything out in the happen at the outset, so there can be no confusion.

And finally, perhaps sadly, if you lend money to a friend, do so with the knowledge that you may never see it again. If you enter into every transaction with that in mind, then hopefully you won’t be disappointed with the outcome and your friendship will not suffer.

The short version: If you borrow money, be mindful about paying it back as soon as possible; if you lend money, prepare for the worst and hope for the best.

4. Split bills fairly.

Picture the scene: You’re at dinner with a few friends. You order a salad and skip the booze, while one of your friends orders a steak and downs a glass of wine. At the end of the evening, someone suggests you just split the bill evenly. Fair? Not really.

So, what do you do? If the difference amounts to a few dollars, you may feel it’s easier to bite your tongue. Or maybe it all evens out. Maybe last time you went to dinner, your order was a little more pricey, but you split the bill evenly. Consider the scenario.

But if you feel it’s worth speaking up, do so. You can say something as simple as: “Look, I think mine was more like $35, so if you don’t mind, I’ll throw that in and let you guys split the rest.”

By using this method, you’re ensuring you only pay for what you ate, but you’re also not calling anyone out on what they ate. Hopefully, your friends will understand. Or, if it’s you with the steak and the wine, you’ll understand if a friend wants to pay only his or her share.

The short version: Be happy to divide bills up fairly, no matter what the outcome.

5. Be considerate.

The main guideline to follow when it comes to financial etiquette is to follow your ABCs: Always Be Considerate. (That makes it easy to remember.)

You can apply the ABC rule to even the smallest things.

Let’s say you and your friends are going in on a birthday gift for one of your other friends. The considerate thing for the organiser to do is ask the entire group for suggestions. That way, there is room for people to suggest gifts that fit their budget. By being considerate about these issues at the outset, you kinda nip them in the bud.

You can also apply the ABC rule to bigger life moments. If a group trip is in the works or someone is getting married, it’s up to everyone to be considerate about everyone else’s money capabilities and expectations.

The short version: Keep in mind that everyone has their own financial burdens, worries, expectations — and be considerate of those. Knock ‘em dead!

Words by
Bryna Howes Right Chevron

Bryna Howes is the Head of Content at Spaceship. She's equally obsessive about cinnamon donuts and scouring the web for great reads.

Money and friends: what’s the etiquette?