What should you do when friends and family ask you to borrow money?
I’m waiting for my friends and family to pay him back. You can lend money to burden the relationship. Here’s how to avoid stress:
Friendship and money aren’t mixed in, new research suggests.
More than one in three Americans lost friends over money, according to a summer report on personal finance site Lendingtree.
Of the 2,000 adults surveyed, 36% said they lost friendship through money. Two-fifths reported tension with friends over money. And almost a third felt the pressure to keep up with my friends’ spending habits.
But none of that tension seems to stop Americans from mixing money and friendship. In the Lendingtree survey, 77% of respondents said they lent money to their friends. A third of the lenders didn’t get the money back.
“Money is complicated and emotional,” says Traci Williams, an Atlanta-based clinical psychologist and certified financial therapist. “And because our friendship is part of the closest relationship in the world, it’s no surprise that the two of us get mixed up and complicated.”
The risk of mixing friendship and funds
Other recent studies have come to similar conclusions about the dangers of merging friendship and funds.
In a 2024 survey by financial services firm Bread Financial, 21% of Americans reported losing friendships over money. The survey reached 1,670 consumers.
Money can in other ways make friendships tense. In the Pan Financial Survey, 65% of consumers said they “break the budget” because of social activities. And 26% said they felt financially incompatible with their friends.
In the Lendingtree survey, 69% of consumers said they opted out of going out of social outings due to costs.
Communication, or lack of it, appears to be a major draw to the financial conflict between friends. One friend expects the loan to be paid back, while the other isn’t. One diner opposes the cost of the group’s meals, but does not speak out.
“I think people get injured in a place where their expectations aren’t met,” said Jessica Calaway, senior manager of consumer insights at Bread Financial.
Young Americans may be more used to money and friends than older generations. In the Pan Financial Survey, 61% of Gen Z and 70% of Millennials said that borrowing money from friends is a common practice.
Young consumers “grown up in a world where talking about money wasn’t a taboo,” Karaway said. “There’s tension about that, but that tension isn’t necessarily a bad one.”
There are several rules for dealing with money with friends drawn from everygirl and Bustle from the above experts and publications.
Be careful when lending to friends
As research suggests, loans to friends don’t always end well.
Lending money to a friend in need can strengthen friendship, experts say. But what happens when you lend money to a friend who is complaining of poverty and then see them splurge at the mall the following weekend? There can be harsh judgments and feelings of hurt.
“If you’re going to lend someone money or borrow money from someone, it’s really important to sit down and talk through expectations on both sides and what will happen if those expectations aren’t met.” “Because it’s much easier to have a conversation in advance than when things are on fire.”
If a friend asks you to borrow money, Schultz said, it’s okay to say no.
If you borrow money, or dress, or power tools from a friend, the experts should quickly return it.
It’s okay to return the money
If you lend a large amount to a friend or lend a precious record album, there may be a time when your friend is afraid that he has forgotten his loan.
It’s difficult to find the right way to return it to invite a friend.
If that’s money, Bustle suggests and you can send a reminder to your favorite payment app.
Also, “Hey, can you hit me for that Taylor Swift ticket?”
But be careful how you write it.
“Remember, this is your friend,” Williams said. “Treat this person like you care.”
Don’t ask for rewards for small things
You may feel that you’ll be wiped out by finding a friend for a coffee drink for $7. But if you harass them endlessly to pay you back, you risk building friendships.
Friendship sometimes means a small exchange of favors. You buy this coffee and I buy the next one.
Bustle surveyed readers about money etiquette and found that 90% don’t bother Venmo requests under $10.
“For one person, $10 might not seem like that much,” Williams said. “And for others, that might be true.”
Find a fair way to split the bill
Splitting up restaurant tabs is rarely easy. One diner can eat and drink twice as much as another.
In large groups, the server may be helpful in enquiring about individual checks. If you’re worried about splitting the bill, that’s the moment to speak up.
“People usually want to pay for what they consume,” Williams said. “They don’t want to split all over the place.”
Fortunately, splitting the bill has never been easier. Many restaurants do it for you. There are many bill split apps.
Plan your spending in advance on large trips
Splitting the restaurant tab is one thing. For weekends in Las Vegas, the bets are much higher.
For group vacations, experts say it’s important to plan your expenses in advance.
“That’s when you really want to be clear about what your expectations and plans are and what deadlines are for paying things,” Williams said.
It is human nature that we feel we are resenting a big bill. To avoid antipathy, she said she would consider creating a spreadsheet that cuts the exact costs and showing who is paying for what.
