Wednesday, November 16, 2005

Finances between Friends

There are always awkward moments between friends when it comes to money.
I have a good friend who I'll call Tina. We often have dinner together, sometimes in restaurants, sometimes cooking in. Sometimes we split the check, sometimes we just take turns picking up the whole check. It balances out, pretty much.
Unfortunately, Tina has a lot of debt. Between student loans, family crises, and some career decisions that didn't work out, she's gotten to the point where her paychecks are being garnished to pay off some of her creditors. Knowing her situation, I try to offer to pay for things more often, but she usually doesn't let me. I'm happy to find cheap ways to spend time together, so it's not really a problem but it can just be awkward to talk about our lives when I'm all excited about buying an apartment and she is just wondering how she'll get out from under mountains of debt.
I have another friend, "Wanda," with whom I have a similar kind of financial disparity. Wanda doesn't have debt, but she works part-time so she can have time to be an artist. She makes a little money selling her art, but barely enough to break even, so she is always worried about making ends meet. Our lives, and our priorities are totally different-- we each respect the other's choices, but sometimes it can be a little tense. I tend to pick up the check if I go out to dinner with Wanda, knowing that she only goes to restaurants when she's with me. There have been times when I've lent her money, not huge amounts, but not all of it repaid. The last time I was with Wanda we went shopping, and she fell in love with a $150 belt and bought it, saying it's the kind of thing she rarely treats herself to, and that one special accessory like that is what can make an outfit out of otherwise cheap, thrift shop clothes.
Do I begrudge her the occasional splurge? No-- in the scheme of her life, it's pretty rare. But I couldn't help having a little twinge of resentment, knowing that I don't treat myself to $150 belts and that she could have paid me back first instead of buying that belt. Actually, I think I was just jealous-- it was a really nice belt and they only had one in the store, and I was the one who had seen it first. I stood there thinking "yikes, could I really spend $150 on a belt? I haven't even bought a belt in years... do I deserve a new one? Do I need a new one? What about all the other things I could spend $150 on?" etc. But she took one look and said, "wow, that is a great belt" and bought it. Sometimes I wish it was that easy.


Anonymous said...

Are you sure you think you were just jealous? Because I personally wouldn't fault you the twinge of resentment; I think I would have felt it too. If I were Wanda, maybe I WOULD treat myself to something special before I paid back a friend, but maybe not a $150 belt--and I certainly wouldn't have bought it in front of said friend!

I'm not trying to get you mad at your friend; I just think you had a right to feel the way you did.


Anonymous said...

absolutely, my girlfriend is in a similar position as your "tina." we are both in school and we both work (for the most part) but it seems like my girlfriend never has money and i do. and i feel bad if i make her pay (for her turn on dinner) so i usually pick up the tab. we talk about this, but i am sure as anyone could guess, it most probabbly ends in a fight.

Anonymous said...

My wife has a couple of friends exactly like the two you described. This is made even more dificult by the fact that we really are millionaires, while some of our friends and family are barely scraping by.

They are not victims, their predicament, like your friends, is usually the result of either bad choices in life and relationships, horrible saving/spending habits, de-prioritizing the need to make money, and sometimes plain old laziness.

They might be wonderful people in some respects, but terrible with money. And instead of seeing us as an example of how to make it (because we started with nothing), they just somehow think we got lucky. Well specifically that my wife is lucky to have married a high-earning professional. Yet, when my wife started dating me, I was a college drop-out, had lost my job, and was terrible with money. She didn't marry a rich guy. She married a diamond in the rough guy, and then helped me achieve success through her coaching, supportiveness, and the occaissional cracking of the whip!

Anyhow, these friends of hers don't understand that she has what she has because she has made a lot of extremely wise decisions and we have worked very hard - we have the kind of luck you create for yourself.

But, more to the point, we end up paying for dinners, concerts, even loaning out money from time to time. Fortunately, our friends and family don't even know how much money we have - they know it's big, but not exactly how big. We down play it, try not to get upset when we're not paid back for things, etc.

It's not worth it, and they behave that way out of ignorance, not spite. I once lent my mom several thousand dollars for an investment. When she got the money back from the investment, do you think she repaid me. Why no, she lent the money to a friend of hers instead - A FRIEND WITH GAMBLING DEBTS!!! And this back when we didn't even have much money ourselves. We borrowed the money to lend to my mom from the bank. Shessh! I have to admit, I read her the riot act on that one and the money was returned soon enough. But, that's just the way her brain thinks. No money sense whatsoever.

You just have to pick your battles. Sometimes you let it go, other times you have to bring it up. Just depends on how badly it's eating at you.

Anonymous said...

Lending money to friends is always an area of difficulty until you come up with a plan of what you are and aren't willing to do. Mine is simple. I lend only if I never expect to see the money back. Sometime I never do, but othertimes it can have wonderful consequenses. Either way, it never becomes an issue with the friendship when I do it that way.

Caitlin said...

Not that I have had many requests or opportunities to loan money, but I am like pfadvice (I think), If I am in a position to afford to consider the money a gift, I "loan" it and don't expect to see it again. But I have never been in a particularly awkward situation either.

But it's a very interesting topic overall -- i know sometimes friends (and family) in "worse" financial shape than us have gone ahead and purchased things I'd want (landscaping, gizmos, etc) and its such a flood of mixed feelings. Jealousy is one of them. Until I remind myself of what my goals are and then i can relax a bit. But I also am concerned for them sometimes because it seems their decisions don't match up with their true "desires". I totally have to work on letting all that go.

Anonymous said...

I agree with pfadvice, I never lend money to friends that I would expect to get back. The story about lending to my Mom, was a exception. In that situation, the "investment" was pension-related and necessary to allow her to get the maximum penion benefit she was allowed. It's complicated, but basically, this was a matter of making sure she would have adequate retirement income - we had no real choice but to go out and borrow the money and lend it to her because her credit was too bad for her to get a loan on her own.

Also, Caitlin, I can totally identify with your comments about seeing people of lesser means make silly choices. It's their money of course, so who are we to judge. But, those same people are the ones who complain about not having enough money, not knowing how they will retire or send their kids to college, etc., and then look at us like "hey, you guys are loaded, you don't have to worry about any of this...".

But, one of the reasons we have money is that we don't blow it on gadgets and new cars and stuff. Our TV is 10 years old. Sure, I want a giant flat screen TV. I don't even own a car. It's not that I don;t want one. I'm as materialistic as the next guy - I just don't act on all my impulses. I'd love to buy a new BMW 750, but I just can't bring myself to - not yet. I would get one right now, but our "extra" money is funding my wife's new start-up business this year. Someday, that business may make us ten times the wealth we already have. I'd rather have that satisfaction, than drive a new car.

I could go on and on. It is a fasinating topic.