When it comes to finances, most consumers will agree they have encountered awkward money situations in their life. No matter who you’re dealing with, money is a sensitive topic. Managing awkward fiscal situations, especially with family members, can be taxing and stressful. However, there are better ways to go out about it than others. Some of these situations can lead to greater personal financial worries and you may end up drowning in debt. Therefore, learning to identify and navigate through these situations is essential.
How to Navigate Awkward Money Situations
1. Lending to Family or Friends
- Be honest about your own financial situation – As always, be honest and open about your decision of either lending or not lending. At times you may have to fib a little as to not hurt the recipient’s feelings. Hopefully, they will respect your honesty and your decision.
- Set the expectations up front – How much are you willing to loan? If this truly is a loan or has been presented as such, be clear of that. With a loan, there are expectations that must be met. These can include things such as the time frame for paying back the loan, and if there will be any interest on the loan amount. It’s probably best to write up the terms of the agreement and have both parties sign.
- Always discuss with a partner/spouse before agreeing to the loan – Remember your spouse or significant other may not feel as strongly about lending money. This can lead to stress in the relationship. If this becomes an issue, be upfront with the person and tell them that you are unable to give them the loan. The person in need will understand if they are at all reasonable.
2. Splitting the Bill
- Plan ahead and bring cash when going out to eat with a group so that you can escape the awkward conversation about splitting the bill. Pay your way efficiently to avoid paying more than your share and adding even more consumer debt. If there is a large disparity between the amount that each person spent, then you can suggest that everyone pays what they owe rather than an even split. This way, you can handle the awkward money situations more gracefully.
- New phone apps, such as Splitwise or Foodivide, can help to determine the exact amounts to split after a meal. If you prefer to transfer money directly to a friend or family member at the table, try using apps such as Venmo or PayPal which allow you to automatically transfer funds using the person’s email or phone number.
- Talk the bill over with your parents too. Who is picking up the meal tab? Should your parents cover it just because you are their child? Avoid the situation altogether by having this conversation ahead of time. They shouldn’t feel as though they need to pay for you or vice versa.
3. Declining an Invitation to a Social Event or Vacation:
- Present alternative options that are both fun and affordable. Everyone has been invited to lavish dinners out or activities that might be well out of your budget. When this happens, rather than immediately declining, you can try this tactic.
- Be honest about your financial goals. When asked to join an event, vacation or expensive outing, say you’re actively trying to save money or working towards debt relief and that you are unable to attend. It’s worse to commit and then not end up having the money to participate.
There may be any number of awkward money situations that you face on a daily basis. Facing this situation with your personal finance goals in mind can take you in the right direction.
If you are in need of debt assistance, reach out to a certified credit counselor at American Consumer Credit Counseling by calling us on 800-769-3571.