Dealing With Family, Friends, and Money

How to split the bill and say no to a relative's or friend's loan requests without feeling like a cheapskate.

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If you've ever had a family member ask you for a loan or been asked to split the bill when all you got was a salad, then you are familiar with the awkwardness that can surround money and relationships. In Isn't It Their Turn to Pick Up the Check?, Jeanne Fleming and Leonard Schwarz offer strategies for dealing with the most cringe-inducing scenarios.

In addition to answering my questions below, Fleming and Schwarz offered to respond to readers' questions, which will be published in an upcoming Alpha Consumer post. As an extra incentive to share your own sticky situation, I will mail a copy of the book to the person who asks the most intriguing question. Send your questions to alphaconsumer@usnews.com or post them in the comments section below.

When discussing whether to lend money to a relative who asks for financial help, you suggest basing the decision on how much the person needs the money, whether he or she has been generous to you in the past, and the potential impact on your own finances, as well as the probability that you will be repaid. Does lending money within families usually hurt or help relationships?


Forty-three percent of the people we surveyed told us that when it came to the largest amount of money they'd ever lent a friend or relative, they were never repaid in full. Moreover, 27 percent said they never got so much as a dime back. That's a lot of people being stiffed and, in turn, a lot of resentment being created. And what these statistics don't capture, of course, is the amount of effort many of the people who weren't stiffed had to put into getting repaid—a chore no one enjoys. When a friend turns out to be less than honorable about a loan, at least you have the option of no longer socializing with him or her, if you choose. But when the people who stiff you are family, you may have to suffer through, say, a Thanksgiving dinner at which they brag about dining at a new upscale restaurant—a place you feel they had no business patronizing until their long-overdue debt to you had been repaid.

So, to answer your question: While there is often good reason to lend money to a relative and real satisfaction to be gained by helping out a loved one, the fact remains, you are entering a relationships minefield when you do so.

It seems as if a lot of questions people have revolve around a hesitancy to be honest because it might hurt someone's feelings. You often advocate for honesty, but when, if ever, is it best to fudge the truth?


You're absolutely right: We're all for honesty, for being direct. But more fundamentally, we're for sticking up for yourself—whether it's by asking for a loan to be repaid, by refusing to let your sister help herself to all of your mother's nicest things after the funeral, or by explaining to your neighbor that it is a problem that his new fence is 2 feet over the property line. Not that there aren't occasions when there's good reason to let things go. Let's say, for example, your brother, with whom you are close, borrows your car and puts a large dent in the hood—a dent he is unconscionably slow in having repaired. If you can afford to pay for the repair yourself, you may be better off to do just that and stop being mad at your brother. That said, you should also stop lending him your car.

What's the most common awkward financial issue that couples face within relationships?


Conflicting expectations. Consider this: Some people believe you should never charge interest on a loan to a family member, while others see nothing wrong with doing so. Some people expect the parents to always pay when the family goes out to dinner, even when the children are working adults, while other people do not. And some folks believe the only fair way to divide up an estate is evenly among the children, while others think it's appropriate to consider how loving, supportive, and helpful each child has been. Conflicting expectations such as these are common. And since courtship typically doesn't involve vetting your spouse-to-be on such issues, an otherwise happy marriage can run into real turbulence when, for example, the husband discovers that even his wife never expected her brother to repay the $1,000 the couple lent him.

Another trouble spot is secrets. It may be that the wife is slipping money to her family and not telling her husband. It may be that the husband is a spendthrift and the wife feels she needs to hide her bonuses from him. Or it may be that the husband is secretly investing in the stocks of companies that he knows his wife feels are not socially responsible. Whatever the secret, when it comes to light, the person who was kept in the dark feels betrayed, and a sense of betrayal is, need we say, never good for a marriage.

The arrival of the bill at the end of a meal can be very awkward. What should you do when your dining companion insists on treating you, but you don't really feel comfortable with that? What about when you ordered a cheap meal and no alcohol, and your martini-downing friend wants to split the bill evenly?


There are three rules for dealing with a money-and-relationship problem: Nip it in the bud. Learn to say no. And don't lose sight of who the good guy is—you, not your friend or relative who's trying to make you feel petty for caring about money. All three apply in these dining dilemmas. In particular, if you don't want a friend to treat you, say "No." Or make that "No, thank you. It's nice of you to offer, but I insist on paying for my own meal." If he or she refuses to take no for an answer, the next time you go out to dinner together, take the waiter aside at the beginning of the evening and tell him you want the check delivered to you. Then insist on paying it. If you like, you can tell your friend as you do so, "This time it's my turn. But in the future, why don't we just split the check?"

Why is this important? Of course, it's fine to allow someone the pleasure of buying you a meal. But if you allow that person to treat you to every meal, you are assigning to your friend the higher status that comes with being your patron. That's a dynamic best nipped in the bud.

As for the opposite type of problem—that is, the friend who wants you to pay for half of his martinis and chateaubriand while he pays for half of your iced tea and pasta primavera—the solution once again is to speak up. You won't be the first person to reach for the dinner tab and say, "It looks to me like your share is about $80 and mine is about $40." Nor will you be the first person to request separate checks or, if he does all the drinking, a bar tab separate from the food tab.

Please help me with my own awkward money situation: What should I do if my friend always suggests meeting at restaurants that are beyond my budget?


We mentioned earlier that money-and-relationship trouble often brews when siblings or friends have significantly different levels of income. This isn't much of a problem in, say, Saudi Arabia, where, if you have a lot of money, everyone you're close to does as well. But in America, significant disparities in wealth among friends and family are quite common. The only solution in the situation you've described is to tell your friend upfront that you prefer to go to restaurants where the tab is not likely to be more than, say, $50 a person or whatever your budget permits. There is no need to be apologetic. Remember: You've done nothing wrong—though, of course, it's important to be polite.