Few things are as divisive as finances, and tensions can rise when your loved ones don’t handle their money the way you do.
Every month you work according to a budget. You know exactly how much you’ll have left after all your monthly expenses and savings are taken care of, and the rest is set aside for incidental spending.
But a few days after payday a friend you haven’t seen in a while suggests a night out and the couple of hundred rand you thought you’d spend somehow ends up being much more.Then a week later your sister borrows some money because things are a little tight at the moment.
She promises to pay it back – with interest – but the bottom line is, your carefully worked-out budget is now out of the window. Suddenly you have less cash to get you to the end of the month, and now you have to do some clever accounting to make it to your next payday.
Sometimes friends and family can make it incredibly difficult to stick to your financial guns. Here are eight spending types to be aware of, as well as tips on how to handle them so they don’t keep costing you money.
The spending enabler
This is the friend you can’t take on a shopping trip because it’s a risk being with her anywhere that money can be spent. You need to pop out to buy only milk and bread but if she comes along you end up with a packet of croissants, a huge slab of chocolate and that beautiful notebook that caught your eye the last time you were there (and now it’s marked down!).
Need a pair of shoes for a wedding you’re going to? Take the spending enabler along and you’ll end up with a new dress and bag as well. Why? Because she persuaded you you’d look fabulous in it. The solution is simple – just don’t take her shopping with you. Ever.
Possibly the worst of all the types, this is the person who borrows money so frequently – usually around the sam e tim e e ver y month – that you start thinking you might as well include an allocation in your budget.
Well, don’t. That thinking is the reason it’s become a problem – you’ve allowed it before. You wanted to help and that made it easier for the person to ask again. The best thing to do would be simply to tell the person that their repeated borrowing (and questionable payback habit) can’t happen anymore.
It doesn’t need to be confrontational – say it in an as matter-of-fact way as possible, pointing out that you have a budget to stick to. If you’re worried that it’s going to turn into a confrontation because of the type of person, simply tell them you don’t have the disposable income available.
That wouldn’t be a lie – in today’s economic climate, who has loads of disposable income? Besides, it’s your money – you worked hard for it and it’s your decision how you want to spend it.
Your friend just got a promotion at work and she wants to celebrate! She made her weight loss target this month – time to celebrate! Her dog just had puppies – you guessed it, she wants to celebrate! With this friend, every occasion calls for bubbly at some trendy new spot.
And each time your budget takes a knock. There’s nothing wrong with celebrating both big and small achievements in life, but not every celebration should make a dent in your spending. Either politely decline the more frivolous events or suggest these celebrations take place at someone’s home, where each guest brings something to make it more affordable.
The awful entrepreneur
You have to admit, your cousin always has really impressive ideas. The only problem is, they’re simply not feasible. This is the kind of person who tells you it takes money to make money. Well, yes, but it doesn’t have to be yours.
Don’t get dragged into investing in someone’s business idea simply because you don’t want to rain on their parade. There’s nothing wrong with being the voice of reason. Simply say that while you’d like to be supportive you don’t have the money, and suggest they approach outside investors with their ideas.
The extravagant gift-giver
Every time your birthday rolls around, the gifts get more expensive. And it’s difficult because they’re from your sister. She knew how much you wanted that new Kim Kardashian West perfume, and she got it for you. So what do you get for her? What do you do when your budget for presents doesn’t allow you to spoil her in the same way?
The problem doesn’t lie with her – it lies with you. You need to accept that you can’t afford to match her expensive gifts and teach yourself to shake off the feelings of guilt and shame this evokes. You might even find that extravagant gift-givers don’t expect gifts of the same value in return.
“Some people actually hope they’ll receive less, because giving feels great – it feels better than receiving,” Cape Town-based clinical psychologist Yoav van der Heyden explains. It seems it really is the thought that counts – often the reason behind the gift matters more than the gift itself.
The early adopter
They’re always the first in line to buy the latest gadget, which tends to elicit some good old envy . . . But why do you feel pressure to keep up? Van der Heyden suggests acknowledging the feeling of envy, but not necessarily acting on it. Take note of your feelings rather than simply reacting to your emotions.
"It helps to notice the discomfort in such situations and to learn to accept that feeling with- out having to act on it. Emotions are alarms, not commands."
Don’t buy to keep up. Shop within your price range. Your purse will thank you.
They have a heart of gold and are motivated by helping others, but don’t let philanthropic friends or family pressurise you into giving. There’s nothing wrong with donating to the needy, but your giving is your business and shouldn’t be done to get the approval of others.
“We give because it feels good,” Van der Heyden says, adding that guilt and social pressure are often the main reasons people give to charity. He advises thinking carefully about what you’re giving, to whom and why. “Try not to rush into decisions about giving as you’re often guided by emotions you may not agree with rationally.”
If your philanthropic friend wants to donate a few thousand rand to a worthy cause, that’s fine. But don’t dig holes in your pocket to try to keep up or make your friend think better of you.