Social (Money) Etiquette: Don’t Let Fun With Friends Tank Your Finances

200391264-001Just three weeks after graduating from college in 2011, Erin Lowry finally had the chance to do what she’d been fantasizing about for years.

She packed up her life in the small college town of St. Bonaventure, N.Y., and relocated to the big city—quickly landing a gig as a page for “The Late Show With David Letterman.”

Unfortunately, her dream job didn’t quite come with a dream salary. So to make ends meet, she supplemented her income with side gigs—working 25 hours a week as a barista at Starbucks and babysitting for multiple families on nights and weekends.

In an effort to stretch her limited income—and avoid draining her nest egg—Lowry also focused on living frugally, following a strict budget and taking home Starbucks leftovers at night.

Lowry’s carefully constructed game plan was going well. That is, until she agreed to attend a friend’s birthday dinner. As is often the case with big group gatherings, partygoers wanted to split the check evenly—and Lowry hadn’t budgeted for the expense.

“I was living quite hand-to-mouth, so I would scout menus at a restaurant, find the cheapest item I could get away with ordering, and abstain from any drinking,” Lowry says. “At that birthday dinner, people declared that we owed $50 each, but I’d only had a $10 appetizer.”

Lowry was faced with a conundrum: Engage in an awkward “I can’t afford it” conversation in the middle of her friend’s joyous celebration, or cough up the cash in order to save face.

Fortunately for Lowry, a friend’s boyfriend asked people to contribute their fair share instead, but the damage was done. “After that, I started to avoid birthday dinners unless I knew a majority of the people in attendance or that I’d only be on the hook for my meal and a portion of the celebrant’s dinner,” she says.

If you’ve found yourself in a similar situation, you’re not alone.

It turns out that many people (78% of Millennials, to be exact) feel the pressure to keep their spending in line with their friends’, according to a 2013 study from the American Institute of CPAs and the Ad Council—even if it’s at the expense of their own financial well-being.

In fact, a 2013 CouponCabin survey found that nearly 10% of those polled actually went into debt just to attend someone else’s wedding!

Translation: Americans seem to be getting a bit too comfortable with the idea of going into debt simply to avoid social awkwardness and keep up appearances.

It’s a trend that, as in Lowry’s case, has the potential to torpedo even the most airtight of budgets, but there are ways to approach such predicaments with grace and aplomb—and help prevent your social calendar from plundering your hard-earned cash.

RELATED: 5 Ways to Fend Off Contagious Bad Money Habits

  • http://www.lbeeandthemoneytree.com/ Lauren Bee

    Obviously weddings/reunions can’t be avoided, but I use the six month rule for wedding travel..if we haven’t had a personal, one on one conversation either by phone or in-person the last six months (social media doesn’t count) I don’t go. I know a couple who used this rule to cut down their wedding guest list. Brutal, but effective.

    http://www.lbeeandthemoneytree.com

    • http://thebrokeandbeautifullife.com/ Stefanie @ brokeandbeau

      That seems like a pretty reasonable rule. I struggle most with my cultural community. It’s literally hundreds of people who I see ALL the time and am VERY close to (think my big fat greek wedding)- compound the number of people by all the traditions and expectations and it’s a peer pressure spending nightmare!

  • http://www.mylightison.blogspot.com/ Monica M

    I think it is absolutely unfair for someone watching their spending at a group dinner/event to be roped into paying for more than what they’ve had. That means someone else got some of their order for free or had to pay for less than what they had. I got sucked into spending over $80 at a dinner one time when all I had was one small entree and one glass of wine. The people I was with all ordered several appetizers, at least 3 different bottles of wine and expensive plates. These were people I’d just met but they were good friends with the person who invited me so, I sucked it up and handed over my card when they suggested we split everything evenly. But I wouldn’t do it again. I’ll always cover all of my order plus tip and maybe a little extra if someone shared their wine or appetizer with me. But I’m not paying extra to cover parts of other people’s dinner because it’s “easier” to split things evenly.

    • http://thebrokeandbeautifullife.com/ Stefanie @ brokeandbeau

      I have personally spoken up in such occasions (though it is uncomfortable). I don’t think it’s a matter of being cheap, so much as what’s right.

    • T_r_u_t_h

      Depends on the group size. Past a certain number of people, 6 or 8 perhaps, maybe even 10 if it’s not a tapas or small plates type restaurant, it just isn’t practical for everyone to go around and add up their total, and inevitably, when everyone does this, there isn’t enough money at the end, because in all the fun, someone forgot they ordered this dish or that drink, or shared something with someone else, or a diner forgets to add tax (you didn’t mention it in your “order plus tip”, either, but presumably are including it with that you would offer to pay). There was a woman some friends and I once knew who always asked to pay separately for her share at meals – guess what, she never put enough in and then everyone else had to akwardly figure out how to confront her faulty math and bad tipping or everyone had to chip in more or one guy just had to throw in more money and be done with it. Needless to say, people stopped wanting to hang out with her. If it’s a large group, I’d have the conversation up front and ask for a separate check, or if you can’t or don’t want to and can’t afford to or are not willing to split it all ways, then passing on the event is probably the best policy.

      • http://www.mylightison.blogspot.com/ Monica M

        Oh, yeah that is awkward. Well thankfully I’m good at math and always totally cover my portion or get my own check. :)

  • Lauren

    Nifty, I went to Bonaventure.