I’m sure there are a number of people who read the name of this post and reacted with a, “Oh, HELL NO!” Paying for your friends potentially opens up a can of worms that none of us want to even begin to deal with.
There are a number of ways that you can find yourself “paying” for your friends. And several ways to pay for your friends include exchanges of time, goods, or even services. Has it been awhile since you’ve had to deal with that issue? Good for you! But, it’s a matter of time before you find yourself potentially paying for a friend.
Let’s walk through the moments when it’s ok to pay for your friends and moments when it’s not.
The friend payment tiers.
First, let’s acknowledge that there are different tiers (or levels) that requests for payments may find themselves. Let’s go through a couple of scenarios.
Scenario #1: You and your friends go hiking for the day. Your friend chips in and pays for gas because you’re driving. In this scenario, there is an acknowledgement that the friend is experiencing an expense that the other friend can contribute to.
But wait, there’s more! Before the day is over-you stop for a cup of coffee. Your friend (who gave you gas money) no longer has cash and you offer to buy them a cup of coffee. In this particular situation everything pretty much balances out. This friend normally is pretty good about remembering these types of situations, so you know that a cup of coffee is in your future.
A cup of coffee is usually around $5 or less so this situation shouldn’t upset your friendship.
Scenario #2. I recently had a friend pay for some other friend to attend a Tony Robbins event. My friend paid for everything-because this person CAN. They make around $200,000 a month (I kid you not) and have the ability to give gifts that in no way affect their financial life.
For the rest of us who aren’t making a couple of hundred thousand a month the question you need to ask yourself before paying for your friend is the following, “Will paying for this harm my finances directly or indirectly?”
If the answer is yes, then you should not offer to pay for whatever it is you’re paying for.
Loans vs. gifts.
I don’t loan money-to anyone. And, when you talk about paying for someone else’s expenses, whatever they may be, you’re basically talking about loaning someone money. Loaning money to a friend is a “Don’t Do it” zone.
If you’re the friend who is putting your other friend in the situation where they need to loan to you-not cool. I’ve been the friend who has borrowed money from a friend and it took YEARS to heal the rift that occurred because of it. I was borrowing money because I was broke and so it’s not surprising that I was unable to pay them back. I was a financial mess.
If you’re the friend who is being put in the position of loaning some money-you will have to ask yourself some questions. The most important one is: are you comfortable loaning money? And if you loan it, are you ok with potentially losing that friendship if your friend fails to repay you?
The next question you should ask yourself is: “can I help this friend by giving them a gift versus giving a loan?” Again, I don’t loan money to people. I give money and I typically have an account for family and friend expenses.
These expenses always come up unexpectedly and when it’s inconvenient for EVERYONE. I strongly recommend having a “my friend’s/family member’s money is funny-and I’m not laughing account.” But, the key is to never let anyone know that you have this account.
Hey, you slackers!
Has your friend picked up the tab for you several times in the past couple of months? If you’ve answered “Yes” then it’s time to do two things, pay back your friend and treat them to something nice. And, it’s also time to consider why this situation keeps coming up and your friend keeps paying for stuff for you.
We’ve talked about literally paying cash for things for your friends but we haven’t talked about other types of payments you may find yourself doing for your friends. Here’s a few examples of non-cash payments that you may find yourself gifting to a friend.
Driving your car-less friends around town.You’re basically always the designated driver (sigh). I hate to admit this, but I learned how to drive as an adult. My friends drove me around for YEARS. That means I now find myself (happily) driving people around town and into the mountains because I have YEARS of being driving to make up for.
Yep, I was that girl. I’m absolutely happy to drive people around as much as possible because I appreciate all of the times my friends drove me around town.
Maybe your friend has helped you out with your new puppy, every time you went on vacation, saving you hundreds of dollars in boarding fees. Now, they have a dog. It’s time to offer to puppy-sit their dog and give it the love that they gave yours.
Maybe your friend has babysat your teeny tinies a couple of times. If your friend doesn’t have kids, think about what would make their lives better? A grocery gift card (plus cash). A special experience? If your friend has kids, it’s a no brainer-just babysit their kids and call it even.
The longer you’re in a friendship with people the more your boundaries may get blurred. Don’t take your friends for granted and check in from time to time to make sure you’re both on the same page in regards to financial expectations within your friendship.
Are you usually the lender or the borrower? What boundaries do you have to make sure your choices don’t ruin your friendships? Let us know in the #Adulting Facebook community.