Should You Talk To Friends About Money?

Should you talk to friends about money?

Personal finance seems to be a taboo subject amongst friends. Often, people don’t like talking about money, about debt, about salaries, or anything else related to their finances. But should people worry about being open about their finances? Should you talk to friends about money?

Yes. You 100% should take to friends about money and finances. Article over. Next.

Okay, maybe it’s not quite so simple.



The dangers of not talking about money with friends

I’ve seen many times in my life, people falling out over money and finances. But, I’ve never seen anyone stop being friends because they cost of autodesk inventor lt license talked about their finances. Don’t treat money as a taboo subject. This is an important thing to understand. It’s not talking about money which loses you friends, it’s not talking about it when you should be.

According to research from Scottish Friendly, 7 million people in the UK say that they have lost contact with a friend because of a financial dispute, with 28% of people between the age of 24 and 35 admitting to losing friends over money.

Let’s have a guess at what these “money issues” might be. I would be shocked if any more than 1% of them were due to people having different opinions on how much they should put in their pension. Or what their preference was between the snowball and avalanche methods of debt repayment.

No, much more likely is that friend A asks friend B for £x to help them out of a pickle. Friend B doesn’t want to pry into friend A’s problem (because talking about finances just isn’t done). They lend them £x because they want to be a good friend. £x doesn’t solve the underlying problem that friend A has and they can’t pay friend B back.

However, friend A still doesn’t want to talk about the underlying financial problems, so they simply make excuses or avoid friend B. All of a sudden, friend A and friend B are no longer friends; they are simply person A and person B and form part of the 7 million people in this statistic.

It’s a sad story, but I would be very surprised if you have never come across it. I personally believe that over 80% of these 7 million people would have a similar story.

In my experience, this seems to be more of a problem among men (maybe due to their more closed personas) and this is supported by the study which shows that 30% more men admit to losing friends due to finances than women.



cost of autodesk inventor lt license Why not talk about it?

Would it not be better if friend A went to friend B and explained why they were struggling with their finances? Friend B is a friend. He would want to help in a more productive way than just throwing £x at the problem. They may be able to offer advice to solve the underlying problem. If not, they may know someone who could.

What I don’t understand is why should it be any difference with finances? Imagine the same situation, but friend A needed his shower fixed. He would quickly ask friend B what he thought or if friend B knew a plumber or electrician who could help.

I don’t see why finances are taboo amongst friends. It shouldn’t be. And the only way to stop it is to talk. Talk to friends about money and finances. Have open discussions. Don’t be afraid to ask questions and answer honestly. I’m sure it would reduce that 7 million number quite significantly.

If the only solution is friend A lending money to friend B, then the previously linked Scottish Friendly article actually includes has some very good advice of how to manage the situation to ensure that you don’t lose a friend:

  1. Only lend what you can afford
  2. Everyone should benefit from the agreement in some way (make it a “business deal”)
  3. Discuss terms
  4. Don’t involve yourself in the act

The second piece of advice here is very good and something that we discuss in our alternatives to payday loans article. You can find that lending £50 off a mate and paying him back £52 a month later may be hugely beneficial for both parties (you get a deal much better than a payday loan and your friend gets a 4% monthly interest rate (over 50% APR) which is much better than they would earn in the bank or even through investments in stocks or property.

Just make sure everything is agreed up front!


Talk to friends about money, people. Be open and honest. Finances are just another topic of conversation (like the football!) and you should not be worried about being open with your friends. After all, they are your friends. That is what they are there for!

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Note: this post was written by moneystepper following agreement with Scottish Friendly that their research would be referenced in the article

21 thoughts on “Should You Talk To Friends About Money?

  1. I agree to not making money as a taboo subject, but don’t pry too much into your friends’ finances either. I personally don’t talk about it because I try as much as possible to just rely on myself about finances, because I just don’t feel ‘right’ if I borrow my friend’s money in a big amount. Nevertheless, if someone tries to borrow money from you, be transparent with them so you won’t end up losing money and losing friendship at the same time.
    Suburban Finance recently posted…3 Things Parents Should Stop Teaching Their Children About FinancesMy Profile

    • Good points SF. However, I have found that you can learn a lot about your own finances and ways to improve your approach by talking to friends about money and finances. Others may have ideas on investing or real estate that will encourage you to do more research in certain areas. I’ve found, in my experience, that being open about these things can be greatly beneficial.

      That said, I’m not saying be nosy. There is always a line with privacy and you shouldn’t pry into subjects that your friends don’t want to talk about themselves. However, often its just not spoken about because…well, because its just not spoken about!

  2. I’ve had both kinds of discussions with friends, those where they needed advice or just a little money to tide over to the next month, and those where we just talk about something like what do we consider things to worthwhile to spend on.

    I always offer friends to help them with budget or anything if they need a little money, but I also make it clear that in the end they are adults and so long as they don’t ask me for money for stupid things we’re good.

    As for discussions, treat it like politics. If it gets too heated then drop it. There can be strong personal feelings about it, especially if people feel like they are being accused. However it can lead to some interesting new insights as well, hence I agree it should not be avoided.
    Nina @ recently posted…Learn how stores get you to spend to avoid being fleecedMy Profile

    • That’s a good point Holly. Talking to friends about money is a good thing, unless your friends don’t care about it. Then its just like talking about your love of cricket to a group of rugby fans!! 🙂

  3. I think it’s fine to talk about money in a general sense but when you start getting into certain numbers, it can get a little tricky. I generally don’t talk about things like how much money we bring in or what we have saved for retirement, but to talk about a general sense or that we are saving is perfectly fine. On the flip side, I really don’t want to know the specific numbers of my friends just as I don’t want to advertise mine.
    Money Beagle recently posted…What Will Drive Black Friday Sales This Year?My Profile

    • True. I wouldn’t recommend walking into a pub and saying “Hey guys, I earn £x, what do you earn?”. Specifics in numbers aren’t usually necessary (although they may be if friends are looking to borrow money from each other) but a more general conversation about money and finances with friends is very healthy in my opinion.

  4. Great post Graham.
    Definitely friends should talk about money. I’m not a big fan of friends lending money and business deals are tricky but its so important to have a support system with your finances.

    Too many people struggle with debt. First, they may not know what to do or how to get started in debt management. Even if they get started, a lot of people lose the will and motivation to build those good personal finance habits. Talking with a friend and setting goals is a great way to make sure you get where you want to go.
    Joseph Hogue recently posted…America’s Money Answers Man, an interview with Jordan Goodman: part 2My Profile

    • Sharing financial goals with friends – that’s another great one Joseph, thanks!

      The accountability of sharing these things with friends and family greatly increases the probability that you will achieve these goals when you have the pressure of meeting a promise that you made to people you care about.

  5. I’ve found that talking with friends about money is one thing. I don’t think it’s a good idea to let anyone know how much you have. You’re just opening yourself up to getting solicited for loans. And then if they can’t pay you back for some reason, a contract may get you your money back, but it certainly won’t keep your friendship in tact if you have to take them to court. Whenever I lend money it is when someone needs a quick $20 or less. I never expect to get it back, but I always do. Anything more than that might keep me up at night. Likewise, I would never sell a car to a friend or buy one from them. I’ve seen too many unhappy endings to those arrangements. Lots of hurt feelings and resentments.
    kay ~ recently posted…SPRING CLEANING FOR MINIMALISTS Challenge Part 4 ! 😀My Profile

    • Yeah, I would never suggest shouting things from the rooftops, but discussing these things with true friends has more advantages than disadvantages in my opinion. Good plan on the less than $20 – this is usually when people can’t be bothered to go to the ATM round the corner and its their round! You tend to get these back.

      The argument on buying a car from a friend is a strange one. I personally would as a friend wouldn’t be selling me a car at an unfair price if they knew something was wrong with it. They certainly wouldn’t be more likely to do so than a stranger or a garage!

  6. I usually start with the success I’m having with my money to try and get others to open up and talk abut money. It’s a good ice breaker. If I have the money I may consider just giving the money to a friend instead of loaning it, this way there is no weird payback that needs to happen, but if the friends needs the money because they are simply mismanaging their money I neither leaning or gifting.
    Brian @ Debt Discipline recently posted…Interview Series: Simple Financial LifestyleMy Profile

    • Great point Brian and this is where people really need to talk to friends about money. Without discussing these things openly, its difficult to know if the friend is mismanaging their money or not (although its probably obvious for the guy with a BMW who needs £100 to pay the rent this month….)!

  7. This is absolutely something I struggle with. I (obviously) love talking about personal finance, but it’s super awkward to broach in social settings. We do have friends who seek us out and ask specific questions because they know we’re PF nerds, and I’m always totally happy to chat with them. But, I never bring it up if people don’t ask. I guess I just don’t want to make anyone feel uncomfortable.
    Mrs. Frugalwoods recently posted…Weekly Woot & Grumble: Many Woots of GratitudeMy Profile

    • Its funny when you get that kind of reaction, but it isn’t uncommon. “Oh, all that stuff isn’t for me”! Its often tempting to push too far with these people as you know its for their own good, but you have to know your limits!

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