Updated March 23, 2015

5 Signs Your Friends are Bad for Your Money

Is Your Friendship Money-Toxic?

We've all experienced an awkward money moment at one time or another. Whenever it happens to me, I find myself attempting to hide a strained expression while trying really hard not to let something as frivolous as a few bucks interfere with our relationships.

Usually such tense moments blow over quickly. (“I thought we would split the check, but we could use the calculator on my phone to figure out our share. No, no, it’s okay, really.”) Occasionally, though, the tension lingers. It’s perfectly normal to have minor disagreements with friends, but if money turns into a consistent source of stress, you and your friends may be on different financial wavelengths.

Over time, if money tension is left unchecked, friendships and relationships can become more frustrating than fruitful. When others make us feel bad about ourselves or coerce us into spending unhealthily, the relationship can even become toxic.

Here are some warning signs that your friendship may be entering the money-toxic zone:

1. You leave social encounters frustrated about money.

On the one hand, maybe you had to spot someone cash for the umpteenth time. Or, on the other, maybe you felt peer-pressured to spend more than you wanted to or to gamble with your money, such as through a game of credit card roulette to pay off a tab. Either way, you should ideally feel happy after each social encounter, not frustrated.

A friend of mine used to suggest we go out to eat and then decide at the last minute not to order anything and mooch off my plate instead. I understood that we were in different situations - he was unemployed while I had a steady job - but I wished he would just level with me. Instead, I started to dread hanging out whenever food was involved.

Friendships aren’t money-toxic simply because you and your friends are on different ends of the income spectrum. The bigger issue is when you’re feeling a lack of respect, either from a friend who mooches or persistently encourages you to spend or risk your money when you don’t want to.

2. You feel guilty about your finances.

This, too, applies at both ends of the spectrum. I saw it happen with another friend who visited me from out of town. She was fresh out of college and her first real job paid her accordingly, so I understood that money was tight. Yet I felt agitated when she kept counting her expenses aloud, like tallying up the $20 fare on the Chinatown bus or the $12 bottle of wine we split. She claimed she was okay with the expenses at the time, but I was on edge because I couldn’t tell whether she was really just keeping track of the costs or if she was making passive-aggressive jabs. Was she resentful that she had to pay for the bus? Was she upset when I suggested wine? It was exhausting to feel guilty every time we rode the subway because I wasn’t sure whether she begrudged the $2.50 fare.

I’ve been on the other side, too. I agreed to go on a vacation with a group of friends but didn’t want to spend very much. For many of them, it was their one big vacation of the year, so they were willing to spend money on pricey meals and a fancy hotel. Meanwhile, I was saving up my travel rewards points for a different vacation later in the year, and I wasn’t prepared to drop up to two grand on an extended weekend. Although they were understanding when I tentatively suggested lower-cost options, sometimes someone would push back and I didn’t want to be a party pooper. I felt guilty for agreeing to go on a trip without first fleshing out the financial details, and whenever I spoke up, I felt guilty for putting constraints on the vacation my friends had been dreaming about for months.

3. Your friend doesn't take no for an answer.

I have one friend who’s a “cajoler.” That can be really great, like if I’m feeling lazy and she convinces me to get out of the house and do something fun. But in some other contexts, like when it comes to spending money, this behavior can get awkward. Luckily, if I state my position firmly enough (“I love you but I really can’t make it” or “That seems awesome but I just can’t spend the money right now”), she respects it and lays off. If she didn’t, I would feel disrespected and the tension would escalate.

4. You stop viewing your friend as a peer.

Certain relationships are meant to be unequal, like the one between parents and kids. I don’t feel awkward when my parents treat me to dinner or even if my friend’s parents do so. With friends, though, we should be on equal footing. One of my close friends comes from an extremely wealthy family, but that shouldn’t change the way we interact. I don’t expect him to treat me every time just because he could, theoretically. And he doesn’t offer to randomly pick up the bill, which is how it should be. If money were in the mix, he might wonder whether his wealth is a reason for our friendship, and it could cast doubt on many of his interactions. I consider us equals in virtually every way, but it might not feel that way if he always paid for stuff.

Similarly, your friend might be a starving artist while you have a stable job, but it isn’t fair for that friend to expect you to always pick up the bill. Not only can it feel unfair, but it changes the dynamic from one of equals to one of dependency.

5. You don’t feel comfortable talking honestly about money.

This is the solution to all of the other warning signs listed here. No matter where the tension comes from, the key is to talk it out. Obviously this isn’t necessary for an acquaintance you see once a year, but if money is getting in the way of your real friendships, the best way to solve the problem is to face it head-on.

In the end, a money-toxic friendship isn’t necessarily a bad friendship - just one in need of a heart-to-heart. And if you can’t have an open and judgment-free conversation, well, money may not be the only issue for you to work through.

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