Good Morning DINKS. Today we are discussing one of the benefits of having friends… the benefit of friends with money. Let me ask you a question, if you were experiencing financial hardships would you ask your friends for money or would you ask your family? They say that family and money don’t mix, but do friends and money mix any better?
I have definitely had my share of money problems with certain extended family members. However, I have also had some great experiences with my immediate family members. My Mother, my Father, and my younger Sister are all very open with me and with each other about our money. This is mostly because my sister and I both work in personal finance, but it’s also (probably) because we feel comfortable enough with each other to discuss our personal finances.
Finances and Friends
How honest are you with your friends about your money and your personal financial situation? Most of my friends are currently my colleagues at work, or they were my former colleagues in the past. Therefore we are all very open with each other regarding our personal finances because we are surrounded by money all day. As we grow up from careless and broke college students into young professional adults our personal financial situation changes but hopefully our friends remain the same. It’s nice (and sort of comforting) to discuss money with other people my age because they may have the same questions as I do and they may be experiencing the same situations that I am. Very often birds of a feather flock together and people with same approximate income and lifestyle usually hang out in the same circles. I like talking to my friends about money, but more importantly I like knowing that if I ever needed some financial help my friends would always be there for me.
Finance as a Competition
Many people don’t talk about their money with their friends because personal finance is just another reason to start a friendly competition. Our bank account balances may become a reason for us to show off in front of our friends, but no one likes to hang out with a know it all. Finance doesn’t need to be a competition amongst friends, our friends can actually be a source of knowledge and a helpful resource for discovering new money management tools, choosing a new bank, as well as investment options. We don’t necessarily need to compare our Net Worth with the Net Worth of our friends because everyone’s financial situation is different; just because someone has a lower (or larger) bank account balance doesn’t make them less of a friend.
I feel that comparing personal finance is like comparing something else in our personal lives…we have to use the rule of three. We should always take peoples money talks with a grain of salt because not everything can always add up. However, we can definitely talk to our friends about different products and services to hear their opinions and get their recommendations. Comparing finances amongst friends could also lead to animosity or jealousy if our bank account balance is less than our friends. The balance of someones bank account is not important, but as our friend their opinion should definitely be valued.
(Photo by L Lemos)
Kristina Tahnyak
Tahnya is a Certified Financial Planner and former Investment Advisor turned marketing and communications professional She holds a degree from Concordia University, is debt free and currently works in the field of digital marketing.
Can you explain how the rule of 3 applies here?
Your post shows that you have good close friends. Don’t know if discussing money is so much of a should or shouldn’t so much as we are able to share our lives with those close to us without feeling like we will be competed with or taken advantage of. I have had friends like this as well and value them greatly. Though money does not often change hands when one is in need we have extended our hands to one another without asking. Maybe that is the key. If you are close enough to not have to ask then you are close enough to receive it.
oooooooh…. I never discuss personal finance details with friends or relatives. Concepts, yes, details, no. Just a bad idea all around. Lending money to friends or relatives is also out of the question. Great way to ruin a friendship. Carol makes a good point. if you are close enough not to have to ask, then yes, its ok to accept the money that is offered. I’d add that the giver should give planning to never get any of it back, because in all probability, they wont.
The rule of 3 (as it relates to something else) just means that sometimes people inflate their numbers to show off or make themselves look superior. Sometimes people do this with money, and sometimes people do it with other personal stats.