Helping women gain confidence
when dealing with money

Why Friends and Money Don’t Mix

by Elizabeth Falke on December 19, 2012

It’s been said time and time again: friends and money don’t mix. GGF contributor Elizabeth Falke shares her personal story about how money and disagreements about money can ruin a friendship.

Her name was Laura; she was my boss; she was also my best friend – emphasis on the word was.

The arch of our friendship, from its beginning over lunch-hour talks over bad Mexican food to its horrible end, surprised us both. Although we worked in the same office, had husbands who worked in the same field, and cheered for the same sports teams, I never expected my best friend to be the person who told me what to do 40 hours a week.

It wasn’t a work conflict, though, that spelled the demise of our relationship. It was the drastically different way we handled money and, just as importantly, how we felt talking about money that spelled our doom.

When Your Best Friend is Your Boss

Since Laura was my direct supervisor, she was also in charge of facilitating my annual contract negotiations. In other words, she knew exactly how much I wanted to make as well as how much I ultimately received. And because Laura’s husband worked in the same industry as my spouse, she had a vague idea of how much he made, too. Basically, she had a pretty good idea of how much we were bringing in as a household.

While I also had a basic idea of how much Laura’s husband made at work, I had no idea how much Laura herself pulled in. At our company, it was strictly forbidden to ask a coworker about their compensation package; in fact, this was written in to our HR policy handbook. So while Laura knew everything about my salary, I could only guess at hers; I knew it was higher than mine, but I didn’t know how much higher.

Disagreements about how to spend money

At first, Laura’s hovering over my finances wasn’t a problem. I remember one time when we went shopping, and I was tempted to buy an overpriced pair of shoes. “You can’t afford that!” she told me, adding, “Remember, I know how much you make.” Maybe it should have felt patronizing – it certainly did in hindsight – but at the time, it felt like a good friend watching out for my bottom line.

Over time, though, Laura’s so-called “protectiveness” started to rear its ugly head in ways that were clearly out of line. She started making references to my financial situation in social situations, where she and I weren’t the only ones around. It made me feel self-conscious about not only my money, but about our friendship as well.

Meanwhile, Laura wasn’t practicing what she preached. Although she had no problem admonishing me for thinking large while living small, she was doing just the opposite with her own finances. This was back in the pre-housing crisis era, and I was shocked when Laura and her husband openly talked about buying a monstrous new house with nothing down. I wasn’t a homeowner myself at this time, but I’d read enough to know that zero-percent financing wasn’t the best option. She always leased her vehicles, and showed up every six months driving a brand new sports car. She wore the latest fashions, ate at all the trendiest restaurants, took lavish vacations; she also bragged that it was all on her credit card.

The End of a Friendship: Why Friends and Money Don’t Mix

After almost a year of close friendship, I couldn’t take it anymore. While Laura’s financial philosophy was that you only lived once, you might as well enjoy it (even if it meant piles of debt), mine was quite the opposite; I was a saver. I already had tens of thousands of dollars in student loan debt, and the thought of accruing credit card debt like it was water frankly terrified me.

Talking about money – or anything tangentially related to money – became a point of contention. Laura felt defensive whenever I mentioned it, and I felt the need to be secretive.

We’d already started to drift apart when I got a job offer in a new city. Thankfully, Laura hadn’t let our personal differences get in the way of an outstanding professional recommendation. I must admit, my decision to take that new job was heavily influenced by our failed friendship; it was too hard working with Laura, with so much water under the bridge.

Thanks to her, though, I’ve learned that when it comes to friends, the less you know about their financial situation, the better. Although our friendship ended years ago, I still take the lessons I learned from it with me into new relationships.

 

{ 4 comments… read them below or add one }

1 Jon @ Grown Up and Stuff December 19, 2012 at 1:20 PM

Jeez that’s absolutely terrible, I’m so sorry that you basically lost a friend over this.

That was a very tricky and sensitive situation to be in in the first place and I don’t believe she handled it very well.

I actually work in the same office as my girlfriend’s mother! (she helped me get the job) – but even just being in the same work environment means I have to pay a little more attention to what I say and do!

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2 Elizabeth Falke December 19, 2012 at 7:14 PM

Beginning a friendship with a coworker is tough – but working with a family member, I imagine, would be even tougher! Kudos for you for making it work!

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3 Paula December 27, 2012 at 1:01 PM

I have been struggling with a similar issue for several years. I have a friend who comes from a mid-middle income family. She is an only child and, to say she has been spoiled her entire life, is an understatement.
She and I have known each other for more than 20 years. During that time, I have watched her spend money like it’s going out of style, buying luxury hand bags, designer shoes, season tickets to pro sporting events, etc. She has told me that sometimes she charges a $1,000 on a shopping spree because it helps feel better when she’s feeling depressed. She has told me that her mother was paying her credit card bills (or, at the very least, helping her pay her bills) – and she is now in her 40′s! Her parents also gave her and her husband the $20,000 down payment for their home that they purchased in 2009.
Unlike her, I come from a very low-income family and have had to pay for anything and everything I ever had. My mom died when I was still in college and for the next 10 years, my father regularly called me when he “needed” money, pretty much depleting whatever money I was able to save.
My friend knows this about me and yet she never hesitated to tell me how much money she spent on a particular item or how much money she and her husband made at their jobs. She married a man who is very successful in sales and who enjoys high-end items as much as she does (although, I dare say he is better at managing his money than her).
For the last several months, my friend has been very stressed due to her current financial situation. She has racked up thousands of dollars in credit card debt, none of which her husband is willing to pay for, and has been trying to negotiate with the credit card companies to pay off the debt. She has closed all of her bank accounts and she and her husband refinanced their house and put it in his name, all in the sake of preventing the banks/credit card companies from suing her.
She has shared all of this information with me and has even suggested that she might try to find a way to file for disability so that she doesn’t have to pay taxes. It has been difficult to empathize with her given the fact that I know her history regarding her spending habits and the fact that her mother has always paid her bills.
So, in the midst of all this financial turmoil she has been dealing with, imagine my surprise when she told me her husband just bought her a 2010 Mercedes! He doesn’t feel obligated to help her with her credit card bills, is okay with her not paying her credit card bills, and still goes out and buys her a practically brand new luxury car?!! Oh, and here’s the kicker – she said they haven’t ruled out filing bankruptcy, but will have to wait until next summer because of her husband’s year-end bonus.
Not to mention the fact that she still has someone come in and clean her house on a regular basis, they still regularly go to pro sports games, and she still goes for her regular manicures/pedicures and “salon” days.
I don’t know that I can continue being friends with her because her irresponsibility with money and flashiness with materialistic items is becoming increasingly more irritating to me. She and her husband are in their mid-40′s and it does not appear that either wants to take responsibility for her bad spending habits. Am I wrong to let this get to me?

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4 kaye January 30, 2013 at 1:38 PM

Paula, I don’t know how you have stood it for as long as you have! The problem is how to let a friend go, over something like that. Maybe begin by telling her how uncomfortable these stories make you feel, and you would prefer that she stop confiding in you about financial matters. Speaking from experience, she may be offended and not wish to speak to you for a while, but at least you will get some relief and maybe she will actually take a moment to think.

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