Are some of your friends actually financial frenemies?

By Hayley Hemmings

Friendships that are tighter than skinny jeans are a blessing. Unless friendships have a bad habit of making you broke.

We’re often influenced by the people we surround ourselves with and so our friends can have a direct impact on many parts of our lives, including finances.

To give you an idea of how great a financial impact our friends could turn out to be, check out this article which covers some research recently undertaken by TopCashback. Apparently, simply maintaining a friendship with your best bud could set you back with a lifetime cost of around £23,870!

Then there’s the fact that borrowing from friends seems to be on the rise. According to StepChange Debt Charity, more and more people are seeking debt advice who owe money to their friends - with the average amount borrowed being more than £4K.

Friends can most certainly influence and impact your financial health in various ways. Do you recognise any of these characteristics and behaviours below in any of your own friends? You’ll find some tips on how to handle them if so.


How friends can impact your financial health

We’ve All Got One – a “Spendy” Friend

If your friend is a spender, always buying the latest gadget or constantly wasting money on things they don’t need, you can’t help but witness this. And sometimes, you might just find yourself following the same kind of attitude towards spending, when you’re admiring their latest purchases. “Wow, that new tablet’s great, I might just treat myself too!”

A “spendy” friend may not necessarily think twice about costs incurred that directly impact you. For example, when they insist on buying a round of drinks and you feel like you have to get the next one in, even though you’re drinking the cheap stuff. Or when they want to split the bill at a restaurant, after you’ve only ordered the starter caesar salad as a main course but they’ve ordered the whole shebang.


How to handle: Realise that the newness of material goods will wear off after a certain amount of time. Whilst you may feel good about yourself when you make an impulse purchase, you could regret it later, especially if you’re trying to work towards a financial goal.

If you’re worried about facing a bill splitting saga at a restaurant whilst dining out with your “spendy” friend, there are some things you can do before you go which may help. Firstly, let your friend know in advance that you’ll only be paying for what you order as you’re trying to save cash this month.

Then, see if you can choose the restaurant. Doing this puts you in control and gives you the advantage of checking out the menu beforehand, so you’ll know roughly how much you’ll need to spend.

When Your Friend Becomes a Pressurizer

A good friend wouldn’t want to pressurise you intentionally of course. But, we’ve probably all done this ourselves at some point – wheedled away at another friend to get them to spend money on going out or for a weekend break or some other activity – so we can enjoy their company.

Just because your friends think you can afford to do something, that doesn’t mean that you actually can. But subject to a little peer pressure, it’s easy to give in and spend money anyway so that you can take part in whatever your friends are doing.

Another subtle way that your friends can put pressure on you to spend money is by telling you how much you deserve to treat yourself. E.g. “You work hard, you need some enjoyment!” or “Oh, stuff the cost, you only live once!”


How to handle: Recognise your friends that have a tendency to do this and be firm with them if you don’t want to spend. You could be honest with them and say you can’t afford to do something or make up an excuse, but make sure you say “No”, rather than “I’ll think about it.”

Not saying “No” leaves the way open for your friends to keep on pestering you in the hope that you’ll give in. Not sure how to say “No”? It’s a word that two year olds are more than happy to say frequently, but one that adults sometimes struggle with. Check out this article for some tips.

When you want what your friend already has

No-one likes to think of themselves as envious, but most people have experienced a bit of the green-eyed monster at some point before.

If your friend seems to have a lot of disposable income to spend or even to save, then it’s not unusual to reflect on your own financial position to compare where you’re at in life. This can actually be a good thing, as doing so could make you work harder towards your own financial goals.

On the other hand though, enviously watching your friend purchasing clothes, shoes, gadgets and holidays and then wanting what they have could end up leaving you in debt or broke if you decide to follow suit.

How to handle: It’s difficult to do, but try to stop comparing your situation to others, not least because appearances can be deceiving. For example, just because your friend has a nice new car, they could well have bought it on finance and may have some hefty debt repayments to contend with that you don’t know about.

Material possessions come and go. They inevitably wear out and in 6 months’ time, you probably won’t feel quite as excited by them. Before you make a purchase, sleep on the idea for a couple of nights. If you still want to make the purchase at that point, fair enough.

When you get treated like a bank

If a friend needs financial help, and you can afford / want to give it, that’s all well and good. But some friends may take advantage of your good intentions and keep on asking to borrow from you.

This is fine if they’re able to repay you, but if they can’t... well, it’s awkward to keeping on asking, right? A friend who frequently treats you like a faceless bank may end up leaving you with less cash for yourself.


How to handle: If you have a friend who is a frequent borrower and whose financial habits are now starting to affect your own finances, it may be time for a frank and honest conversation with them. Or get them to take a look at this article.

Tell them how your own finances are starting to suffer because of lending money to them. Suggest other ways that they can raise money themselves, such as selling a few bits on eBay or getting a part-time job. Be strong enough to say “No” to further borrowing if you need to. And check out these tips on how to further support your friend without handing over cold hard cash.


When your friend becomes your financial advisor

Qualified financial advisors can be expensive, so understandably we sometimes turn to our friends for advice on loans, savings, mortgages and investments in the hope of saving a quick quid or two.

Well, what may seem like a good financial decision now may not be the case in a few years’ time. This is when taking your (unqualified) friend’s advice on such matters can prove detrimental to your own financial health.

How to handle: Advice from a qualified financial advisor can be worth its weight in gold. So if you’re facing a big financial decision e.g. considering your first mortgage or need help with getting a pension sorted out, professional unbiased advice is the best - even if you will have to pay for it.

Top Takeaway

Sometimes, your friends can get in the way of you achieving your financial goals. For example, if you’re trying to pay off debt and you’re also trying to fit in with friends who are of the “spendy” variety, the chances of you achieving your goal may be hindered.


If you want to achieve your financial goals, you may need to rethink how to handle some of your existing friendships. Work out which friends have similar financial priorities and surround yourself with these people a little more often.


Use likeminded friends as a support network. So, if you are trying to pay off debt, see if one of your indebted friends will become your debt buddy. That way, you can both motivate each other.

What impact are your own friends having on your finances?


Author Bio: Hayley Hemmings is a freelance writer, blogger and tea addict from Yorkshire. She’s passionate about money matters, frugal living and loves anything handmade. When Hayley’s not writing, she’s most likely to be found enjoying snuggles with her little girl or walking her border collie through the beautiful Yorkshire countryside.  

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