Starbucks recently announced a new super premium coffee. The blend, "Costa Rica Finca Palmilera," will be sold for $7 a cup.
If they would never pay $7, even if they could afford it: Your friend is an accumulator of wealth. They value things for their practical value, not for bragging rights. It's highly unlikely they own a luxury car or a McMansion. They plan for their future and work their plan. You're probably looking at tomorrow's millionaire next door. They're willing to share their knowledge and will do it in a matter-of-fact manner. If you hit them up for a loan, they'll ask how you got into financial trouble and consider giving you the money.
If they wouldn't drink a $7 coffee, even if someone bought it for them: Your friend is accumulating wealth, but they're not enjoying the journey. Don't spend too much buying them gifts—they won't appreciate the gift and could even think less of you for spending the money. Their home and car will be basic. They'll be private about their net worth. Their estate will be much larger than expected. You can ask them for a loan, but expect them to want to hold the title to your car as collateral.
If they wouldn't let someone buy a $7 coffee for them: Your friend not only believes in living frugally, but also thinks the whole world should join them. They probably donate old clothes to a local thrift shop. Looking for a bargain? They're the person to ask. If they don't know where to find one, they'll research it for you and come back in five minutes with an answer. They may also be a good source of information on retirement accounts and other wealth-building strategies. There’s a good chance that they belong to an investment club or spend time on investment site forums. If you ask for a loan, they'll suggest you try a budget plan instead.
If they plan on buying Palmilera on special occasions Your friend generally lives a financially responsible life, but they have one or two areas where they enjoy indulging themselves. The area could be small (the occasional coffee) or large (a theater-quality home entertainment system). They'll be happy to share their luxury item with you; they may even pick up the tab. They'll be willing to let you borrow money and won't make a big deal out of it.
If they plan on buying super-premium only when they're trying to impress someone: Your friend is a social climber. You'll find them in designer clothes (if the brand is easily recognizable). It's likely their home is larger and fancier than their income level would justify. Their car, too, is a luxury brand or model. They probably have an IRA or 401(k), but neither receives regular contributions. It's also unlikely they have an emergency fund or a long-range plan for their finances. As they near retirement age, they'll wonder why they didn't save more money. You can ask them for a loan, but they probably won't have any money.
If they already plan on making Palmilera their regular coffee drink: Your friend lives for the moment. They're either very wealthy (the cost of any item isn't important) or they'll have trouble with debt at some point in their life. Impulse buys occur often and many are expensive. They believe they have a special ability to appreciate the best of any item—and that they deserve the best in everything. If they aren't independently wealthy, later in life they'll complain that Social Security doesn't provide enough to support their lifestyle. Oh, and expect them to ask you for a loan at some point.
Gary Foreman is a former financial planner who founded TheDollarStretcher.com. The site features thousands of articles on how to save your valuable time and money.