Do you value your friends? Do you value them more than money? We hope
you can answer yes to these two questions, but even if you can, there
still is a chance you might lose friends because of money. This happens
from time to time and can ruin even the strongest friendships. To help
keep all of your friendships intact, learn these five common problems
involving friends and money and try to avoid them.
Starting A Business
Starting a business with a friend might seem like a wonderful idea for several reasons. You'll be working with someone you trust, you'll be doing something you enjoy, and you'll be making lots of money. These are all good and valid reasons to start a business with a friend, right?
The fact is that a good friend doesn't always make a good business partner. Just because your friend is fun, and shares similar interests to you does not mean he or she can run or manage a business successfully. Another important thing to remember is that most businesses end up failing. A failed business can be a huge financial burden that can haunt you for years. And even if your business is successful, you and your friend must consider several important questions to avoid even bigger problems. How will the profits be split up? What position within the business will you and your friend take? Who has more power over the business? Does either friend have the option to buy out the other friend? If you can't thoroughly answer each of these questions before getting started, it is very likely things will go awry.
The best thing to do is to find business partners outside your circle of friends.
Lending And Borrowing Money
When money is lent and borrowed between friends, the trouble starts when the money is never paid back. This happens for two main reasons. The first reason is that the borrower assumes the lender won't mind a delayed repayment, because of the friendship. The second reason is the lender doesn't feel comfortable enforcing the repayment, again, because of the friendship. These two reasons illustrate how lending and borrowing money between friends just isn't a good idea.
To avoid this problem yourself, consider adopting a policy to never lend or borrow money with your friends. There are a few exceptions to this rule, however. For example, if your friend forgot his or her wallet at home, and wants a beer, go ahead and pay for it. But if your friend needs a $10,000 business loan, be firm and just say no.
Hiring A Friend
Maybe you're looking for a photographer, caterer, or editor and want to hire a friend for the position. It might seem like a good idea and is more convenient than going through the process of finding and hiring a freelancer. But as you might guess, there are some problems that can pop up if you hire a friend. The biggest problem occurs when your friend ends up performing below your expectations. When this happens, it puts you in a very difficult position. You will feel bad for wasting your money on a poor quality job, and you might have to hire someone else later. Now, getting poor quality results is not uncommon in the freelance world, but there is less conflict between the client and freelancer because they usually never see each other after the job is complete. But when the freelancer is your friend, this just isn't the case.
To prevent this problem from happening to you, avoid talking about things that your friends would be interested in working on. And if a friend ever offers their services to you, say no, but be polite and respectful. If you are a freelancer yourself, simply resist the urge to offer your services to your friends, and find clients outside your circle of friends.
Gift Giving
Gift giving is a healthy and fun activity to do between friends over holidays and other special occasions. But there are a few problems that can arise when gifts are exchanged. The first problem occurs when one friend gives another friend a gift that is overly expensive or extravagant. Gifts like these are often given with the best intentions but are usually both inappropriate and unnecessary. To avoid this problem yourself, don't spend a fortune when buying gifts for your friends. Use your best judgment and remember the old saying, it's the thought that counts. And if you are ever the recipient of an overly expensive gift, be gracious and simply accept what is given to you.
The second problem occurs when one friend gives another friend a gift that he or she will never use. When this happens, the recipient might feel uncomfortable and pressured to use something he or she might not want to. And if the gift isn't used, or not used often, the gift giver might feel offended or hurt. To make your gift giving experiences more pleasant, put more time and effort into your gift decisions. If you are ever the recipient of a gift that is unwanted, be honest if confronted about it. Tell the gift giver that you do appreciate the gift but it doesn't quite fit into your life. If the gift giver is more of a social acquaintance and not a close friend, it may be acceptable to tell a white lie in this situation.
Difference In Salary
How often do you see CEOs and factory workers spending time with each other after work? Probably never. We tend to associate ourselves with people in our own socioeconomic class because of social pressures and our own discomfort with people different from ourselves. It is perfectly natural to feel this way, but what happens when our old friends become much more or much less wealthy than we do? Should we keep these friends or lose them? It might be difficult to answer that question. A more important question to ask is: are friendships worth losing over differences in wealth? Try to remember that we're all still human no matter how much money we have or don't have. Reach out to your old friends regardless of their wealth. And if you're ever snubbed, take comfort in knowing you at least tried, and that you don't value money and status over friendship.
Starting A Business
Starting a business with a friend might seem like a wonderful idea for several reasons. You'll be working with someone you trust, you'll be doing something you enjoy, and you'll be making lots of money. These are all good and valid reasons to start a business with a friend, right?
The fact is that a good friend doesn't always make a good business partner. Just because your friend is fun, and shares similar interests to you does not mean he or she can run or manage a business successfully. Another important thing to remember is that most businesses end up failing. A failed business can be a huge financial burden that can haunt you for years. And even if your business is successful, you and your friend must consider several important questions to avoid even bigger problems. How will the profits be split up? What position within the business will you and your friend take? Who has more power over the business? Does either friend have the option to buy out the other friend? If you can't thoroughly answer each of these questions before getting started, it is very likely things will go awry.
The best thing to do is to find business partners outside your circle of friends.
Lending And Borrowing Money
When money is lent and borrowed between friends, the trouble starts when the money is never paid back. This happens for two main reasons. The first reason is that the borrower assumes the lender won't mind a delayed repayment, because of the friendship. The second reason is the lender doesn't feel comfortable enforcing the repayment, again, because of the friendship. These two reasons illustrate how lending and borrowing money between friends just isn't a good idea.
To avoid this problem yourself, consider adopting a policy to never lend or borrow money with your friends. There are a few exceptions to this rule, however. For example, if your friend forgot his or her wallet at home, and wants a beer, go ahead and pay for it. But if your friend needs a $10,000 business loan, be firm and just say no.
Hiring A Friend
Maybe you're looking for a photographer, caterer, or editor and want to hire a friend for the position. It might seem like a good idea and is more convenient than going through the process of finding and hiring a freelancer. But as you might guess, there are some problems that can pop up if you hire a friend. The biggest problem occurs when your friend ends up performing below your expectations. When this happens, it puts you in a very difficult position. You will feel bad for wasting your money on a poor quality job, and you might have to hire someone else later. Now, getting poor quality results is not uncommon in the freelance world, but there is less conflict between the client and freelancer because they usually never see each other after the job is complete. But when the freelancer is your friend, this just isn't the case.
To prevent this problem from happening to you, avoid talking about things that your friends would be interested in working on. And if a friend ever offers their services to you, say no, but be polite and respectful. If you are a freelancer yourself, simply resist the urge to offer your services to your friends, and find clients outside your circle of friends.
Gift Giving
Gift giving is a healthy and fun activity to do between friends over holidays and other special occasions. But there are a few problems that can arise when gifts are exchanged. The first problem occurs when one friend gives another friend a gift that is overly expensive or extravagant. Gifts like these are often given with the best intentions but are usually both inappropriate and unnecessary. To avoid this problem yourself, don't spend a fortune when buying gifts for your friends. Use your best judgment and remember the old saying, it's the thought that counts. And if you are ever the recipient of an overly expensive gift, be gracious and simply accept what is given to you.
The second problem occurs when one friend gives another friend a gift that he or she will never use. When this happens, the recipient might feel uncomfortable and pressured to use something he or she might not want to. And if the gift isn't used, or not used often, the gift giver might feel offended or hurt. To make your gift giving experiences more pleasant, put more time and effort into your gift decisions. If you are ever the recipient of a gift that is unwanted, be honest if confronted about it. Tell the gift giver that you do appreciate the gift but it doesn't quite fit into your life. If the gift giver is more of a social acquaintance and not a close friend, it may be acceptable to tell a white lie in this situation.
Difference In Salary
How often do you see CEOs and factory workers spending time with each other after work? Probably never. We tend to associate ourselves with people in our own socioeconomic class because of social pressures and our own discomfort with people different from ourselves. It is perfectly natural to feel this way, but what happens when our old friends become much more or much less wealthy than we do? Should we keep these friends or lose them? It might be difficult to answer that question. A more important question to ask is: are friendships worth losing over differences in wealth? Try to remember that we're all still human no matter how much money we have or don't have. Reach out to your old friends regardless of their wealth. And if you're ever snubbed, take comfort in knowing you at least tried, and that you don't value money and status over friendship.
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