Money-toxic friends will encourage you to spend beyond your budget or attempt to take control of your finances. This can include pushing your to buy extravagant items, suggesting pricey restaurants that make you succumb to peer pressure, or even giving you costly gifts so that you feel the need to return the favor with something equally expensive. They mean no harm and are usually not aware that you may be having money issues; just want you to join in the fun.
According to an recent CreditDonkey article it is predicted that Americans collectively hold over 1 trillion in credit card debt in 2011 with one in seven Americans having more than 10 cards. With this high rate of credit card usage, it is easy to see how toxic friends can entice you to whip out that card to pay for expensive purchases. Before you know it, your monthly credit card payments have skyrocketed and you are knee deep in debt.
Awkward Situations
At some point, everyone encounters awkward situations involving money. It could be colleague asking for loan until payday or one of your closest friends who presumes on that friendship by asking for financial help to make a down payment on a new car. Neither of these people account for the fact you may not have the money and feel too embarrassed to come out and say so. Rather than think they are trying to embarrass you, consider their request as a sign of the respect for your friendship.
In the end, you have four options:
- Plan ahead. If it isn’t an overly close relationship or the person only asks for big spending every once in a while, it’s perfectly fine to think of some advance strategies. For example, if your friend’s choose the most expensive restaurant in the area, you can always plan to ask for a separate check. If your friends by the most expensive new gadget and exert peer pressure for you to do the same, you can simply state that you are saving for another purchase.
- Talk openly about financial issues. Whether toxic money people are family friends, co-workers, it is likely that they aren’t trying to offend you or make you feel uncomfortable. Regardless of the reasons you need to be careful with money, be open and honest and don’t come up with false excuses. Nothing wrong with trying to sticking to a budget and your friends and family may actually admire your effort. Substitute a “no” with an alternative suggestion that you can afford. For example, suggest browsing a museum or art gallery, perhaps a nice long hike.
- Don’t become a Money-Toxic Person. Now that you know how damaging money-toxic friendships can be, take care not to suggest any outing that will require group embers to overspend. Before planning any event, poll your family or friends to find out what they will be comfortable spending. Be sensitive to the needs of others just as you wish them to understand your issues. While a $20 burger may not be a bid deal to you, it may be outside the spending limit of others in your group. Rather than get frustrated, plan together how to remain within everyone’s budget.
Save the relationship. We all run across awkward money situations when the person involved is close to us. For example, your best friend asks you to contribute $100 to her favorite charity but you don’t have this amount of money to spare. Don’t get angry and blame the person for now knowing your personal financial situation. Rather, discuss your financial issue openly and offer to contribute an amount that you can afford. After all, it is the thought that counts most! The priority should be to save the relationship and that can only be done with honest communication. Rather than $100. donate what you can; after all, it is the thought that counts most
Daniela Baker is a mother of two. As a social media advocate with CreditDonkey, she helps families stay financially prudent with credit.