Etiquette For Splitting Bills And Lending Money

Forbes

Matt Schulz, a personal-finance expert and author of Ask Questions; Save Money, Make More, joins “Forbes Talks” to discuss ways to successfully navigate money with friends and family.  00:00 Introduction 00:18 What's The Etiquette When Dining With Friends 02:52 How To Have Finance Conversations With Friends 04:19 Should You Loan Money To Family And Fiends? 13:42 How To Ask For Money That's Owed To You  Subscribe to FORBES: https://www.youtube.com/user/Forbes?sub_confirmation=1  Fuel your success with Forbes. Gain unlimited access to premium journalism, including breaking news, groundbreaking in-depth reported stories, daily digests and more. Plus, members get a front-row seat at members-only events with leading thinkers and doers, access to premium video that can help you get ahead, an ad-light experience, early access to select products including NFT drops and more:  https://account.forbes.com/membership/?utm_source=youtube&utm_medium=display&utm_campaign=growth_non-sub_paid_subscribe_ytdescript  Stay Connected Forbes newsletters: https://newsletters.editorial.forbes.com Forbes on Facebook: http://fb.com/forbes Forbes Video on Twitter: http://www.twitter.com/forbes Forbes Video on Instagram: http://instagram.com/forbes More From Forbes:  http://forbes.com  Forbes covers the intersection of entrepreneurship, wealth, technology, business and lifestyle with a focus on people and success.

Transcript

00:00 Hi everyone, I'm Rosemary Miller here with Matt Schultz, a personal finance expert and

00:07 author of Ask Questions, Save Money, Make More, here to discuss successfully navigating

00:14 money with family and friends.

00:16 Thank you so much for joining me today, Matt.

00:17 Thanks for having me.

00:18 So Matt, we're going to jump right in with what people really want to know.

00:22 Okay.

00:23 What are the etiquette norms regarding splitting bills, especially in group settings or when

00:28 dining out with others?

00:30 Well, it's really all about communicating and making sure that people know what to expect.

00:38 Because the last thing anybody wants to have happen, even though we've all been there,

00:43 is to end up splitting a bill and you get stuck paying two-thirds of it, right?

00:50 So the best thing that you can do, especially if you're in a bigger group with a lot of

00:56 people, is to say, "Hey, I know we're all getting together, going to dinner, whatever.

01:04 How do we want to split this?"

01:05 Or if you're the person who's kind of wrangling things in the text chain that you have, say,

01:12 "Hey, are we good just, are we good splitting this every way?"

01:18 Or just being as open as you possibly can with that information to make sure that people

01:26 understand.

01:27 Because nobody wants to go to a dinner and get a sparkling water and a salad and get

01:34 stuck paying evenly with a bunch of folks who split five bottles of wine.

01:39 Exactly.

01:40 But what if you're the only person in that group who got the sparkling water and the

01:45 salad?

01:46 So now you feel like, "Oh my gosh, am I wearing my financial circumstances basically on my

01:53 chest?"

01:54 Yeah.

01:55 And that's a tough thing too because as long as you kind of know that going in, you can

02:01 kind of adjust and kind of know what is happening.

02:07 But really a lot of times with a situation like that, it gets down to kind of how you're

02:13 treated within that friend group.

02:16 And I mean, it's a little bit like your mom and dad would tell you that if they get all

02:21 judgy and they have an issue with you not wanting to, or if they have an issue with

02:34 you not buying enough or you not spending enough or you're not keeping up with them,

02:38 maybe they're not your real friends.

02:41 That sort of thing.

02:42 So that can definitely be, that can be a tough thing to, can be a tough pill to swallow.

02:50 But it's something that you kind of have to be aware of.

02:53 So let's say I'm a doctor and my friend is a teacher and I want to go out with my

03:00 friend.

03:01 Maybe they can't afford the places I typically eat.

03:04 Do I decide to go to a cheaper place?

03:08 Do I ask them if they're okay?

03:10 And how do I have that conversation without it being uncomfortable?

03:14 Yeah.

03:16 It's not an easy conversation to have.

03:18 And if, depending on how well you know the person or how long you've known them kind

03:24 of depends on how you would approach it.

03:27 But really as long as you're coming to it with a, from a place of understanding and

03:35 wanting to help, that's kind of what it's all about.

03:39 Because the last thing anybody wants to have happen is for somebody to feel pity on them

03:48 or to talk down to them or stuff like that.

03:53 So if you are, if you are the doctor and your friend isn't on the same income bracket as

04:00 you are, really probably the best thing to do would probably be to offer up a lower cost,

04:10 a lower cost option and just kind of circumvent things to the degree that you can.

04:16 So let's switch gears a little bit.

04:18 Let's talk about lending money.

04:21 How do you set boundaries when lending money to friends and family?

04:25 Well that's tough because you, again, you certainly need to do that up front because

04:31 as awkward as it can be to lend to friends and family, it's way more awkward when there's,

04:41 when everything has gone wrong and you don't have anything written down and there hasn't

04:46 been any communications of expectations.

04:49 So the more that you can, the more that you can kind of, the more that you can basically

04:57 put out there up front and the more open you can be about your expectations and the consequences

05:06 if something doesn't go well, the better.

05:10 There's a risk in that because you don't want to treat your friend or relative like a child,

05:17 right?

05:18 So you have to be cautious about not, again, talking down to them or anything like that,

05:24 but just being open and honest and presenting them as like, "Hey, I'm happy to help you,

05:33 but it's a significant amount of money, so let's lay the groundwork and maybe even put

05:40 it in writing."

05:41 It's not like you need lawyers involved or notaries or anything like that, but even just

05:47 having an email exchange where you say, "Well, okay, this is how much I'm lending you.

05:53 This is about how often you expect to pay me back or how long you think it'll take,"

05:59 just so you get some of that information down.

06:03 And then the other thing I would say is that it's important to make sure that the person

06:10 you're lending to understands that if there is an issue, that they should come to you.

06:19 Life happens.

06:20 Sometimes things go wrong.

06:22 Best laid plans go astray.

06:24 But if there is an issue and you're not going to be able to pay me back, let me know sooner

06:30 rather than later and we'll figure it out.

06:32 Right.

06:33 Let me know, don't disappear.

06:34 We've all seen that.

06:36 Yeah.

06:37 And that's really good advice in almost anything when you're dealing with financial issues,

06:45 whether you're dealing with a giant mega bank or your aunt or uncle.

06:52 If there's going to be an issue with paying back, the sooner you tell somebody, the sooner

06:58 things can get worked out because everybody has the same ultimate goal is to pay the person

07:04 back.

07:05 So a little bit of conversation is always a good idea.

07:07 Well, you mentioned, okay, you don't have to get a notary or get lawyers involved.

07:13 Could that have consequences on you if you decide not to do those things?

07:17 Yeah.

07:18 Yeah.

07:19 I mean, and there certainly are cases where you may want to get lawyers involved because

07:23 it's one thing if you are lending somebody 50 bucks.

07:28 It's a whole other thing if you are lending somebody five figures or something like that.

07:35 That's a whole other ballgame.

07:37 So there is definitely a, there definitely are levels to that sort of thing.

07:46 So I would say when in doubt, if you can make it to where lawyers and that sort of thing

07:59 don't need to be involved, then that's probably better for the relationship.

08:06 But sometimes if there's enough money involved, there's just no other way around it.

08:11 Well, let's say someone asks me for financial assistance.

08:16 How can I respectfully decline but still let them know that I still support them?

08:21 Yeah, that's a really hard thing because one of the things I talk about in the book is

08:29 that if you are somebody who is being approached for to borrow money from, and if you're somebody

08:41 that that happens to all the time, it could be something that your friends or family recognize

08:51 in you where you aren't necessarily great at setting boundaries.

08:57 And as much as we like to help, as much as we want to be gracious, there is value in

09:05 being willing to set those boundaries, especially when it comes to money.

09:12 And sometimes it's a situation where you're just honest, making yourself vulnerable, and

09:21 you say, "I would love to help, but my own financial situation is such where I don't

09:28 feel comfortable lending that amount of money."

09:31 And maybe you could offer up something else that you could do to help them financially,

09:38 whether that's childcare or any number of things that we're offering to connect them

09:47 to somebody that might be able to get them a job.

09:50 There's a million different things that it could be.

09:53 The more that you can make things kind of a win-win situation, even if you are telling

10:01 somebody, "I'm not going to lend you that money," the better off you'll be.

10:06 You kind of touched on this, but how exactly do you handle situations where friends or

10:15 families, they're asking you for support and you know your financial situation isn't where

10:21 it should be to support them?

10:24 How do you navigate that without feeling humiliated yourself?

10:28 Yeah, it's not easy.

10:31 And again, it's really about kind of that open and honest conversation.

10:38 Because so many times we fear those really difficult conversations, and we're thinking,

10:49 "Oh my God, what's going to happen?

10:51 They're going to hate me forever.

10:53 They're going to punch me in the face because they really need this."

10:58 We just go to these places with these scenarios as to what's going to happen, and it's scary

11:04 and it makes us nervous.

11:05 But oftentimes the truth is that if you are just willing to have that conversation and

11:15 to do that thing that makes you uncomfortable and kind of power through the sweaty palms

11:21 and the rumbling stomach, then oftentimes things aren't quite as--the conversation isn't

11:29 as bad as you might think.

11:34 Because it's difficult on the person who's asking as well.

11:38 So depending on the relationship, they probably aren't going to want to badger you about this

11:46 and be like, "Please, please, please," and asking you 10 different times.

11:50 They'll probably move on to the next person, ideally.

11:54 So it's really about being upfront and having that conversation instead of waiting.

12:03 This conversation is making me think of this TikTok trend called "loud budgeting," which

12:08 is basically when you're just being open about it, like, "I'm saving right now, okay?

12:12 I don't have it to go to Maui, to Fiji with you guys."

12:17 Yeah, yeah.

12:19 And it's a real thing.

12:20 And it's about people being vulnerable and putting themselves out there.

12:27 And I've heard it described where it's kind of related to a diet, where if somebody is

12:39 struggling or having a difficult time, your natural reaction might be to say, "Let's go

12:47 to dinner," or "Let's go buy something or go somewhere to help them feel better."

12:53 But if part of what they're struggling with is financial, then that actually makes it

12:59 worse.

13:01 It's a little bit like trying to make somebody feel better by giving them a pan of brownies

13:09 or a cake when what they're really worried about is the diet that they're on.

13:14 You just wouldn't do that.

13:17 And so the more you know about where people are and what they're struggling with and what

13:26 they're working on, the better.

13:27 And really, the only way that we can generally know these things is if people are open about

13:33 it.

13:34 So the whole loud budgeting thing, I think, is generally a positive thing.

13:41 So speaking of being open about things, this question just popped into my head.

13:45 Sure.

13:46 So if someone owes you money, you know they owe you money.

13:48 They know they owe you money.

13:51 But you don't want to make the situation awkward.

13:54 They're not saying anything.

13:55 You're not saying anything.

13:56 And you're almost kind of testing their character to see, "Are they going to own up to the fact

14:01 that they owe me money?"

14:04 How do you navigate that situation?

14:11 My initial reaction to that would be to not test them and to just ask.

14:19 Because things tend to get more complicated when we try and do kind of end-arounds on

14:29 having these kind of awkward conversations when really if we just have the conversation

14:34 and ask, it's like, "Hey, what's the deal?

14:38 I haven't heard from you.

14:42 Is there anything that I can help you with?

14:43 Or is there anything that's going on?"

14:46 Rather than kind of like stalking them in social media and that sort of thing.

14:54 And that's a hard thing too.

14:56 And it's something that the person borrowing needs to be aware of.

15:01 It's the old story of if I lend you money for groceries and I see that you're on social

15:09 media at a fancy white tablecloth restaurant, we're going to have some problems.

15:15 And so a lot of it's about kind of respecting the other person on both sides and just being

15:25 open and honest.

15:26 Well, Matt, are there any other tips you could give us on successfully navigating money with

15:34 friends and family?

15:36 Again, I think that it's really just about being brave in having that conversation across

15:47 the kitchen table or across the living room during a football game or whenever you have

15:55 it that you really have to just have that conversation.

16:01 And yes, there's certainly plenty of cases in which these things go wrong.

16:11 And it's important to understand that.

16:13 And sometimes there's nothing you can do.

16:15 It's just a bad situation.

16:18 And friends and family can be very, very intense.

16:23 There's a lot of emotion.

16:24 There's a lot of baggage.

16:25 There's a lot of history.

16:27 But ultimately what you need to do is understand that that money that you lent is important

16:37 to you as well.

16:38 It matters to you.

16:40 And that person needs to understand that.

16:42 And the more that you can do to get that point across early in the game, the better off you'll

16:53 be.

16:54 Thank you so much for joining me today, Matt.

16:56 Thank you.

16:57 [BLANK_AUDIO]

Category

Transcript

Recommended