Money talks, buys us freedom, greases the wheels.
But let's face it... it can also be really awkward.
In fact, no topic induces as much squeamish conversation, passive-aggression and etiquette confusion as the green stuff. Forget sex, politics and religion--try asking someone how much they make and watch conversation come to a screeching halt and the awkward silence descend.
Money is our society's last taboo, and we'd like to change that. We at LearnVest believe in trying to make money more of an open topic of conversation, so we can start sharing and supporting each other in our journey to financial freedom and living richly.
1. You get asked "How much do you make?", "How much is your rent?" or "What did that watch cost?"
People can be curious about money matters, but don't feel obligated to answer if you aren't comfortable. The key is to decline answering gracefully and not make them feel badly for asking. A vague joke or addressing the value rather than the dollar amount can do the trick: "I bring home the bacon...I do all right," "A lot more than I wish it was!" or "I got a great deal on Gilt.com."
If you feel comfortable answering, go ahead--just keep in mind that some people can be strange about money, so keep your audience in mind. The information to keep closest to the vest might be your salary--be more cautious about mixing your livelihood with company politics.
2. Your friend does some graphic design work for you and gives you a discounted price for the work, but you don't like how the job turned out.
Mixing friendship (or family) and business can be a wonderful thing, but it can come with its own unique set of etiquette challenges. There are questions of whether special discounts should apply, and whether there should be leniency for the results. We suggest treating this situation like any other business relationship, with about 10-15% wiggle room for the personal relationship--otherwise the personal relationship might suffer for the business deal. On the service provider side, only provide a discount if your business can sustain it. On the customer side, only hire the person if he or she is right for the job, and then expect the same results you would from any other vendor.
In this specific situation, treat your friend like any other service provider--show appreciation for her efforts and the discount, but let her know that you'd like to see something different instead.
3. Your friend forgot her credit card when you were out shopping together, and you loaned her $50. Now she's forgotten about paying you back.
Yikes--this has happened to one too many of our LV staffers. These loans are awkward because they're too small to make a huge fuss over, but they are significant enough that they can make a dent in your budget. If you're all too quick to spot someone a $20 here and there and your bank account reflects this "death by mini-loan," there is something you can do immediately: stop making them.
Tell your friend next time that you don't feel comfortable charging extra on your card because it's almost maxed out, or that you need your extra cash for dinner later. One or two casual reminders to get paid back are well within reason, but we stop at two--after that, let it go. And if you can't afford it, don't do it again.
4. The dinner check comes and the group wants to split it evenly though you ordered much less than everyone else.
We've all been there--on both sides, probably. So keep in mind people aren't being rude or callous when they decide to split the bill--they're just thinking about convenience. You also don't want to make your budget the focal point of a social outing. The LearnVest philosophy is that when you sign up for a group dinner, you are agreeing to split the check, so know the dining habits of your group and the restaurant's price point ahead of time.
If you can't afford splitting evenly with the group but still want to attend, ask the host or organizer ahead of time: "I'd love to come, but I'm on a budget so will probably just order a salad or appetizer--is that okay or will that make splitting the check difficult?" In a more casual setting, announcing something similar to your dinner companions as you're perusing the menu will set the tone early on to avoid awkwardness later. And in all of these situations, make sure to bring cash--there's nothing more annoying than asking the server to separately swipe your $13 tab.
5. Your friend makes much more than you do, and every time you go out with her, you end up spending way more than you can afford--and you get jealous hearing about her fabulous lifestyle.
At LearnVest we firmly believe that friendship can (and should) transcend financial lines, with awareness and communication. Disparities in income can be tough in friendships--you want to be happy for your friends, but sometimes it can be hard hearing about the gorgeous new Prada bag she just bought when you can barely make rent and have been eating ramen.
If you are close friends, let her know that while you love sharing in her excitement, talking about her vacation to the Maldives or her new car makes you feel bummed and stressed out about your own situation, since you can't afford these things. With awareness, you both can work to balance the conversations a bit more. If you're not as close, a joke or topic change can work.
6. On the flip side, you make much more than your friend does, and you feel guilty or uncomfortable shopping, going out, or talking about your vacations and lifestyle in front of her.
Being on the other side of this equation isn't easy either. How much of your lifestyle can you share without making your friends feel badly?
If your friends seem interested in sharing aspects of your lifestyle they can't afford, consider treating them once in a while (if they don't mind), and scoping out deals so you can share experiences together (such as restaurant, beauty, vacation, and shopping deals on deal aggregator sites like Yipit). Allow your friend to propose plans so she can set the price point.
One rule of thumb: Never lie or go out of your way to cover up your lifestyle. Your friend may find out anyway, and it's just condescending and hurtful if she finds out that you went to Hawaii last weekend with your other friend and didn't tell her.
7. Your significant other's credit card gets declined a few times, and you suspect there are money problems.
There are red flags to look out for regarding your partner's financial stability (read about them here), but what to do when you start seeing them? If you are considering getting serious or are already there, it's time to have the money talk.
Start off by letting him know this issue is important to you--not that you spot all these problems with his finances, which can make him feel attacked and put him on the defensive. Start the conversation away from the "red-flag" situation physically and emotionally (a few days later, when you both are in a good mood), and say something like: "Hey, as we get more involved and think about the future, I want you to know that financial security is really important to me. Can we just talk about it, and what it means to both of us?"
Read more about financial power dynamics in relationships and who should sign the lease if you're moving in together.
8. A family member comes to you for a loan, but you feel uncomfortable making it.
Personal loans can be challenging to navigate. It's especially difficult if the person requesting the loan knows that you are in a position to make the loan--how do you turn down the loan then, without hurting the relationship?
If the relationship is very important to you, consider whether you can loan a smaller amount that you're more comfortable with, or whether you can draw up terms for the loan that you'd be happy with--an interest rate higher than what you could get at a bank, with regular payment plans. In any loan situation, between friends or family, we recommend you write up an agreement that you both sign that clearly outlines the terms of the loan.
If you decline, which is absolutely your prerogative, make sure you let the person know that you are simply not comfortable with it (no further explanation is necessary), but (and this is important) offer your support in another way, so the person doesn't feel as if you don't care about his or her situation. Offer to help your aunt apply for a bank loan to start her business, or help your uncle get the best prices for his antique baseball card collection to pay for his medical bills. Say something like, "I'm just not comfortable loaning money, but I want you to know I'm here for you in every other way--how else can I help?"
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