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Psychology Of Money

Do You Have Money-Toxic Friendships? Avoid Stress And Peer Pressure

Allison Kade
Allison Kade
Posted on Jan 11, 2011

We couldn’t help but feel a twinge of both pity and schadenfreude when we found out that Britney Spears was a source of inspiration for Gwyneth Paltrow’s self-destructive, alcoholic character in Country Strong. You know how some people just bring you down? Certain friends may be physically or emotionally toxic a la Britney, and, alas, some can be financially toxic.

Do You Have A Money-Toxic Friend?

Money-toxic friends tend to put you in situations that encourage you to overspend or strip you of control over your money. This can include ordering lots of expensive drinks on a communal tab, suggesting pricey group activities that leave you feeling peer pressured, or even giving you a present that’s uncomfortably costly—making you feel obligated to reciprocate with something equally expensive.

Stickier Situations.

At some point, everyone encounters a sticky money situation. Say that an old college roommate asks you to be in her wedding party—and then proceeds to choose really expensive bridesmaid dresses. Or, your coworker asks you to contribute to her charity for underprivileged kids in Uganda, but you simply don’t have the cash. Don’t blame them for not thinking of you first and foremost; just accept that, no matter who you are, awkward money moments are bound to happen.

When push comes to shove, you have two real options:

1. Strategize Your Way Out.

If this isn’t a close relationship or this person isn’t a big repeat offender, it’s okay to skirt confrontation by planning your move in advance. If your roommates order the most expensive cable package even though you hardly watch TV, state your idea of a fair contribution now, rather than at the end of the month. If your friends tend to order lots of expensive cocktails—and you only plan to have one beer—plan ahead by requesting a separate check when you sit down. (If anyone asks, you can always say that you might leave early and don’t want to stick them with the bill.) Similarly, if you don’t want to be a bridesmaid because you can’t afford the $600 dress your friend chose, give her early notice. Show her you care in a different way, like arriving early to help her set up the flower arrangements.

2. Talk Out The Toxins.

Whether they’re friends, sisters, a significant other, or even your mom, know that the toxic money people in your life probably aren’t doing it on purpose. No matter the reasons for watching your wallet, be direct and don’t make up fake excuses. Say that you’d love to get together, but that you’re trying to watch your budget in the new year. Replace your “no” with a suggestion for what you can do. For example, suggest wandering around a free museum or art gallery rather than spending the day shopping. If you’re saying no to something bigger or more important, like our bridesmaid example, be sensitive to your friend’s feelings by emphasizing that your decision isn’t about her or her choice of dress (or restaurant or charity or whatever). Blame outside factors. Blame the need to save for grad school. Blame the fact that you don’t yet have an emergency fund. Make the refusal about you, not her.

Don’t Be That Money-Toxic Friend.

As a rule of thumb, never plan any group outing that requires spending more than $20 per person unless you know in advance that all invitees can afford it. Be open and sensitive, even if you normally wouldn’t think that it’d be a big deal to, say, pay $15 for a cab ride to get you home faster than the subway. We know that it can be frustrating to be on this side of the equation: Your out-of-town friend doesn’t want to spend a lot of money, but you don’t really feel like cooking for her or spending yet another night watching Hulu. Don’t take the burden on yourself. Ask your friend to help you brainstorm for more creative solutions. You understand her financial limitations, so she should also accept responsibility for helping to find something fun to do instead.

Oh, and if you’re planning a wedding, please do us all a favor and keep the bridesmaid dresses under $200.

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  • Kodemonki

    Good thing to do with out of towners in certain cities: http://thebeautybar.com/index.php

  • Marnie

    I think it’s even worse to have a friend who’s overly frugal. I had one of those, and she wouldn’t do anything because she didn’t want to pay for it. It made me want to tear my hair out.

    • http://www.JamillahWarner.com Jamillah Warner

      Yes, there has to be a balance, because that can be frustrating. Especially if they fail to help brainstorm for other fun things to do.

  • Boots1807

    I am embarrassed that GP thought it was appropriate to play a country star. Or a singer. How very un-GOOP of her.

  • Epgunn

    i had a friend whose idea of a cheap restaurant was definitely pricier than mine. She also tended to pick pricey restaurants for her birthday fetes, where her friends would order multiple rounds of wine by the glass (hello!) and run up $100+ per person tabs. She was making easily twice what I was and I don’t think she realized that. After i while I made a point of suggesting the restaurants where we met ($30 mexican, not $60 sushi). And I started taking her out for her birthday on my own to avoid having to share the tab with her credit-card wielding friends. it worked out OK. Now she’s back in school so her budget is more in line with mine again. :-)

    • Marie

      Slate had an interesting article a while back on why birthday dinners as an adult can be a bad idea (http://www.slate.com/id/2202646/). It’s difficult when the people at the dinner make very different salaries, but there is some sense of obligation to treat the birthday girl and really “celebrate” (i.e. spend lots of money). I think you came up with a good solution!

  • http://twitter.com/NonneyNonsense Kennon Holton

    I just went out this past weekend with a neighbor/friend. She invited us to go to an Improv, and said that she was able to get free tickets (which definitely works with my budget!). We were excited to go, my roomie and I, b/c normally we don’t go out (saving our money for groceries and school expenses_we both work f/t)…basically, while the Improv was good…it ended up being a $70 night… We legitimately purchased $55 worth of food/drinks (including tax) but then the waitress came back and said the table was $30 short. The girl who had organized the entire venture put “ten in the tip line” which is just wrong b/c basically NO ONE tipped the waitress! I put another $15 in my tip-line b/c I was hoping $10 to make up some of the gap and $5 for tip…but what was a realitively cheap night (if you split the $55 btwn my roomie and I, it went from about $27 to $30…) turned pricier than we intended. Also, I WATCHED as my “friend” and her friends deliberately underpaid…and it just…was frustrating me. The night was not what we had thought it would be. nnAlso, when we first sat down I asked for a separate bill for my roomie and I and the waitress said she wasn’t able to do that. . . So for all of the great advice this article might have, none of it is practical. There is no graceful way out of money awkward situations. If I learned anything from this last weekend, it’s to never go out with people I’m not very close with b/c strangers could end up taking advantage of the situation. I’ve had similar awkward situations when planning my sister’s baby shower. . . My sisters friend has money to spare, but then proceeds to say “we’ll split all the expenses” I flat out told her that I am working on a budget, so if she wanted to prioritize one item and not the others, I would have to take the other items back. I FLAT OUT said this. When I arrived at the house, she had already opened ALL of it up. It was ridiculous. I could keep going about different situations that I did speak up, nicely, to let them know that it was MY issue but I wasn’t able to “keep up” with what they wanted to spend, and quite frankly it was rare for someone to graciously take what I was saying and adjust their budget accordingly. Everyone pretty much just did what they wanted to anyway. I mean work is a GREAT example of people not understanding that I don’t have money to go out to eat and split the bill btwn everyone. I’ll order an $8 item and be done with things, but then they expect me to split the cost of an appetizer I don’t eat and desserts I don’t even try. Unfortunately the only fail-proof way to stay on budget around money toxic people is to pull away from them socially. None of these nice words actually work. I know because unfortunately I have tried.

    • Anonymous

      Hi Kennon,nnThat’s so unfortunate that you were stuck in such a lousy situation. I’m sorry to hear that your best efforts were ineffectual — I definitely feel like that sort of thing only happens once, as you’ll never put yourself in that situation with the same people again!nnI was going to recommend this article as well: http://www.learnvest.com/living-frugally/psychology-of-money/my-friend-loves-her-cosmos-but-must-i-bankroll-her-buzz/. Sounds like you did your best, and it’s no longer on you.nnAlso, as someone who has worked in a restaurant, the waitress should have been able to help you out with separate checks. Being unable to accommodate that isn’t standard.nnBetter luck next time!

    • http://twitter.com/amkade Allison Kade

      Hi Kennon,nnI’m so sorry to hear that! In this article, I didn’t want to be too excessively negative… But, sadly, the bald-faced truth is that sometimes, despite our best efforts, people simply aren’t accommodating. In my mind, that’s not an issue of money-toxicity specifically, but a more generalized lack of respect. nnAs much as it really sucks, sometimes we don’t have a lot of choice except to avoid those situations by avoiding the people who put us in them. Most of the time, the people I’ve come in contact with aren’t being intentional in their money influences and they try to be accommodating, but, whether or not they understand or sympathize, if they can’t respect something that matters to you when you tell them that it does, that may be a sign about how they’d respect you with non-monetary matters, too.nnAgain, I’m sorry to hear about your experiences, but thank you for sharing them!nnAllisonn

    • http://www.JamillahWarner.com Jamillah Warner

      Hi Kennon,nnI hate what happened to! But I am glad it’s in the past. Your experience (and some of my own) definitely reinforces my love for the direct approach. nnI start out very polite. As Allison puts it, “Say that youu2019d love to get together, but that youu2019re trying to watch your budget in the new year.” And like you, I am not available for social settings with people who don’t respect me (and that includes my financial dreams and goals of freedom sooner than later). nnBut these days I have found a savvy group of women who are both budget and pleasure minded to hang out with. In this group, we are very honest about our spending before we go out. And the person who suggests the place has to find out the full pricing disclosure ahead of time.nnOur money is too serious to let somebody else spend it for us. nnWe are setting our standards with grace and a smile and sticking to them. I believe we will find people heading our way, socially and financially (and convert some along the way). nn-Ms. J-

  • Sallyagnew

    You failed to mention in your article, the friends that are overly frugal, penny pinching at every social event and activity.  They constantly remind everyone how expensive things are, talk circles around everyone about the deals they got by standing in the “mark-down meat line” at the grocery store and how they bought 10 boxes of the same cereal because it was on sale.  Oh yeah, they try desperately to get out of paying any kind of tip at a restaurant. I say, “keep those kind of “friends” home.

    • Nina

      Sounds a lot like my “old” friend.  Is it any wonder why she NOW avoids my calls…Oh wait! Chili’s isn’t such an expensive place to eat out, besides – she always admitted how “cheap” she likes to be and try asking her what her MOST favorite activity is at home? It’s an activity simply called “The Sleeping Marathon”.  Honestly, who really needs friends like that?!

  • Annmarie Erian

    Great article!