Bring up the topic of money, and a pleasant conversation can quickly take a turn for the worse. But why? What is it about money that makes it such a touchy subject? You probably already know the answer.
“We feel so much shame around money,” said Dr. Brad Klontz, a financial psychologist and associate professor at Creighton University. “We feel ashamed that we have too little. We feel ashamed that we have too much.” And when the topic comes up in conversation, we feel that we’ll be judged by others, he said.
As a result, it can be hard to know how to handle situations when personal finances come into play. From talking to a significant other about money to dealing with a cheap friend, use the following tips to handle these awkward situations without breaking a sweat.
Your Colleague Asks How Much You Make
Talking about your salary can be difficult and awkward in any situation — especially this one: You’re making small talk with a colleague in the break room at work, and he asks, “How much do you make?”
How do you answer? If you know you’re making about the same amount as he is, it can be easier to talk about, Klontz said.
“It becomes more stressful when our friends are at different socioeconomic levels,” he said. “It’s more of an awkward moment, and you may not want to answer directly. It can shift the relationship when people assume you have a lot less or a lot more.”
How to handle it: If you don’t want to answer a question about the size of your paycheck, Klontz recommends using humor. You can respond by saying something like, “Oh my gosh, not enough!” Very few people will press you to be more specific. If they do, repeat yourself and laugh it off, he said.
You’re Asked to Donate to Charity But Don’t Want to
The phone rings and someone asks you to donate to a cause you have no interest in or simply can’t afford to support. But you’re afraid if you decline that you’ll look stingy or uncaring.
How to handle it: This happens to Jim Wang, founder of the personal finance blog Wallet Hacks, from time to time.
“What I say is something to the effect of, ‘I’m afraid I can’t. At the beginning of each year, I pre-plan my charitable giving so it’s included in my budget throughout the year. We go over this at the end of the year, to plan for the following year, so if you have information about the charity, I’d love to know more so we can include it next year,'” he said.
Someone Asks to Borrow Money From You
There’s nothing like a request from friends or family to borrow money to make you feel uncomfortable. You want to help, but you don’t want your relationship to be ruined if they don’t pay back what they owe.
“I had a college psychology professor say that if you ever want to get rid of a friend, loan him 20 bucks,” Klontz said. Then that friend will avoid you after getting the money. That’s why lending money to friends and family is usually a bad idea. But you need to be ready with a response if you’re asked.
How to handle it: If you can’t afford to help or don’t want to, Klontz recommends yielding to a higher authority. For example, he said you could say, “I’m going to need to talk to my wife about it.” Or, say that you need to discuss it with your financial planner, who tracks every dollar you spend.
If you are willing to lend money to friends, Wang recommends setting firm ground rules. “For example, I don’t lend more than $100 to a friend, and it’s for emergencies only,” he said. “If we have to say no, it’s important we give clear reasons — go back to your ground rules — so people understand why.”
But Klontz said you’re better off thinking of any money you give friends and family as a gift rather than a loan because there’s a good chance you won’t get your money back. So, you need to know how much you’re comfortable giving.
Someone Forgot to Pay You Back
It’s been weeks since you paid for your colleague’s lunch because she left her wallet in the office, and she still hasn’t paid you back. You want to ask her to repay what you’re owed but you’re not sure how to do it without making the situation uncomfortable.
How to handle it: Wang said that when this happens to him, he politely reminds people that they owe him money and gives them several options to pay what they owe. If he thinks they can’t afford to pay back what they owe, he’ll ask if they need more time.
“I find that keeping the lines of communication open and the friendship intact is key because if that shuts down, you lose a friend — and you lose the money,” he said.
Your Friends Always Want to Split the Check Evenly
No doubt you’ve been in this situation: You go out to eat with a friend and order water and the half-priced appetizer because that’s all your budget allows. Your friend orders the priciest item on the menu, dessert and a bunch of drinks then suggests splitting the check evenly. You want to shout “Are you kidding?” but reach for your credit card instead.
How to handle it: You should expect to split the check evenly if you agreed to a large group outing, said Erin Lowry, author of “Broke Millennial: Stop Scraping By and Get Your Financial Life Together.”
But if you have a friend who frequently wants to split the bill when it’s just the two of you, then you should take it upon yourself to divvy up the bill.
“You could also just start carrying cash so you can give your friend the amount you owe, and have him or her charge the remainder on his or her credit card,” she said.
Or, you and your friend can download an app that makes splitting the check easier and fair.
Your Date Asks About Your Finances
You’re out on a date and all is going well until the person you’re with starts asking about your personal finances.
“Questions about money, on dates, can be awesome — or horrifying — depending on how they’re asked,” said April Masini, an etiquette expert who runs the relationship advice forum Ask April.
How to handle it: If you’re asked a question that’s uncomfortable, you can handle it in different ways.
“For instance, you can call the person on it by saying, ‘Gee, that’s kind of personal for a first date!’ And let them know they’ve crossed a line,” Masini said. “By doing this, they can apologize, explain further or create an awkward moment — but it’s their choice, and you get to know people by their choices.”
Although it might feel awkward, couples should talk about money. If you want to make a conversation about money early in a relationship more comfortable, talk about financial goals in life instead of your financial details.
You Can’t Afford to Keep Up With Free-Spending Friends
It’s no fun being the broke friend if you’re struggling to keep up with your friends’ spending habits. But rather than strain your finances, exercise restraint.
“If your friends are always inviting you to places you can’t afford to go, don’t accept all the invitations,” Masini said.
How to handle it: To avoid feeling left out, invite your friends to do things you can afford — perhaps a hike, a free gallery hop or a potluck at your home. Or, you could simply be upfront about your finances.
“Lose the shame and explain the situation, and see if there are bridges in the relationship that allow you to do things together without being left out because of money,” Masini said.
Your Friend Doesn’t Tip Well
You know it’s customary to leave a tip for good service. But you have a friend who doesn’t understand tipping etiquette and never bothers to tip whenever you go out together. As a result, it creates an awkward situation when the bill comes.
How to handle it: “If you know a friend is a bad tipper, add some extra money when you’re present,” Masini said. “If they confront you about it, let them know that you’re more comfortable leaving a bigger tip and you’re happy to add on.” It might open the door to a conversation about tipping etiquette, or you might learn that your friend simply has a tight budget.
If you’re dating someone who is a bad tipper, this might be a red flag, Masini said. “Typically, bad tippers are not generous in other areas of relationships,” she said.
You Can’t Afford to Be a Part of Someone’s Bridal Party
It’s an honor to be asked to participate in someone’s wedding, but the cost of being a bridesmaid or groomsman can be high. It certainly creates an uncomfortable moment between friends if you know you can’t afford to be a part of the bridal party.
How to handle this: The best thing you can do is prepare your finances once your friends get engaged.
“Starting saving now for looming money drama,” Lowry said. “Trust me, wedding season is coming. So are friend group reunion requests, and birthdays and holidays. Instead of feeling the need to desperately claw through your pants’ pockets and couch cushions for spare change, you can start saving proactively.” Lowry said she has a savings account earmarked for gift giving and other people’s weddings.
However, if you don’t have a cash cushion and can’t afford to be a bridesmaid or groomsman, Masini said it’s best to tell your friend sooner rather than later.
“The reason to fess up sooner is so that the bride has options — she can help you out, choose someone else, or talk it over with you and work out some interim solution,” she said.
Your Roommate Isn’t Paying His Share
If you have a roommate, you likely count on him to pay his share of the rent and utilities. But it can be a problem if he falls behind or constantly makes excuses about not being able to pay.
“That is an incredibly awkward situation,” Klontz said. “You’re going to have to confront them. If you don’t, you’re just going to be building up resentment.”
How to handle this: Start by asking yourself whether the situation is your fault because you didn’t agree in advance how to split expenses, Klontz said. If that’s the case, you need to be clear with your roommate about how you’d like to share the cost of rent and utilities.
If there’s already an agreement about how the rent should be handled, Klontz suggests saying: “I noticed you haven’t paid your part of the rent. What can I do to help?”
Be specific about ways you’re willing to help, from offering to provide reminders to helping your roommate find a cheaper apartment if he can’t afford the one you share.
Your Significant Other Is Keeping Money Secrets from You
You notice that a lot of new credit card bills have been arriving in the mail for your significant other. You’ve also seen a few collection notices and start to wonder if your partner has been racking up a lot of debt. These might be signs your significant other is lying about money. You want to ask, but you don’t want the conversation to turn into a fight.
How to handle this: “First, understand that having a big fight is less important than getting to the truth in a relationship,” Masini said. “Sometimes, fights are important, and avoiding fights can create layers of lies and miscommunication or misunderstandings.”
But that doesn’t mean you should accuse your significant other of keeping secrets. If you want to have a productive conversation about money, offer information about your own finances first, Klontz said. If you open up about issues or concerns you have about money, your significant other might feel more comfortable sharing his or her problems.
You See That Your Parent Needs Help Managing Money
Now that your parents are older, you’re worried that there might come a time when they can’t manage their finances well on their own. But you don’t know how to talk to your parents about money because you don’t want them to get defensive or think you’re being too controlling.
How to handle this: When you start a conversation with your parents about their finances, you need to make it clear that you want to help. Klontz recommends starting the conversation by saying, “Mom and Dad, we haven’t talked about this before, but we want to make sure we, your children, can help you as you get older.”
Then, you can ask general questions, such as whether they have a will or estate plan. If they don’t, you can encourage them to meet with an attorney.
Or, you could ask how they would like their finances to be handled if they get to a point that they can’t do it themselves. They might open up and admit that they already need help.