How to handle awkward money conversations
For many Canadians, talking about money is taboo. Yet, struggling with money is almost a universal experience - nearly everyone has had a tight budget at some point, even if only for a short time.
But what do you say when your friends have invited you for lunch to a place you can't afford? How do you get out of an expensive group gift that's way beyond your means? Or how do you broach the topic of payments owed on a joint credit card when your fellow cardholder isn't contributing payments like they should?
Here's how you can navigate some awkward money conversations with ease, and some helpful apps and card features that make splitting a bill easy.
A 2016 CIBC survey found that nearly all Canadians (99 per cent) believe it's important to discuss how to manage finances together, yet only 35 per cent talk seriously about money with their future spouse.
Of those who haven't yet discussed finances, 63 per cent say they don't even know when or how to bring up the topic.
But it's not just couples - we all have trouble sharing our financial reality with others, says Lisa Orr, a Toronto-based etiquette expert and founder of Orr Etiquette.
"There's often a nervousness in discussing financial matters, as though, somehow, people will equate how valuable we are as people with how many dollars we have in our pocket," she says.
This is often not the case. Orr says the more people open up about their financial situation, the more they'll find out that their friends likely feel the same way.
"Everyone has been there," says Orr. "Often, what happens when you're clear about your budget is other people will pipe up and say, ‘It's beyond my budget, too, actually.' So your honesty can take the pressure off the whole group."
1. Going out
When you're going out with friends, Orr recommends deciding on the venue and the budget in advance.
If your group wants to go somewhere that's out of your price range, you have two choices. First, you can opt out. If you are uncomfortable telling your friends you can't afford the activity, Orr suggests saying, "Sorry, that night doesn't work for me" to give yourself an out.
Your second choice is to go and stay within your budget. Be upfront with your group on how you want to split the bill - if you usually split it evenly (and end up paying more), you should tell your group that you want to pay for your tab individually.
That way, you can order a less expensive item off the menu, or forgo drinks, appetizers and dessert to keep your costs down. You'll still get to socialize, but you control how much you spend.
"If anyone says, ‘I would like to pay for my meal individually,' that trumps everything," says Orr.
On the flip side, if you are not the one struggling financially, be sensitive to what others are saying. Don't insist on splitting a tab equally if someone else doesn't want to, and don't pressure your friends into coming out if they say they can't.
Of course, it's often easier to be direct and honest with your close friends, but how do you talk about money around acquaintances, work colleagues or employers?
2. The business
There may be times when money matters must be decided in much less comfortable company. However, Orr says it's possible to preserve your budget and professional relationship in these situations.
"If it's a relationship that's not as close or not as comfortable, you can be a little less direct in the way you communicate," says Orr.
Rather than bluntly saying a venue is too expensive or not in your budget, Orr suggests saying you just prefer not to go to that venue and suggest an alternative.
You can even play up your alternative by saying something like, "Venue X has way better dessert options than Venue Y - why don't we go there instead?" Or "Your venue sounds great, but I know this great local place that serves the best burger in town."
"In the end, everyone has a budget," says Orr. "It happens in every financial stratosphere. We all have limits, so you have to respect people who wish to operate within their means."
3. The group
If you're going together with friends on a group gift, it's important to decide on a budget first.
"If the gift that is decided is beyond your budget, all you're going to do is say, ‘I budgeted and I have six weddings this summer and that amount exceeds my budget, so I think I will have to do my gift alone,'" says Orr.
Then, you can purchase a less-expensive item off the registry, or still give a monetary gift that's less than what you would have contributed to the group gift.
For less formal occasions, such as birthdays, you could forgo a group gift in favour of a gift card or prepaid card purchased at a discount or with credit card rewards points.
you're owed money.
If you share something financial with someone - say, you cover their tab at dinner or you share a joint credit card - Orr says the key is setting up your monetary expectations beforehand.
"Often, what causes these awkward moments around cash and sharing expenses is when you haven't set expectations around when payments are going to be made or how you're going to use or deal with that shared obligation," says Orr.
When you discuss the time frame for repayment, it doesn't have to be hostile. You can say things like, "I'm sure it's on your mind," which implies you're giving them the benefit of the doubt, but then say, "Can you let me know when you'll be paying back money for X?"
Orr also suggests giving them options for payment, such as an e-transfer or P2P payments app and subtly reminding them the impact it has on you.
"You can talk about how this could affect your credit score and remind them that there are consequences to being forgetful," says Orr. "In the end, hopefully the relationship is more important."
If a joint credit card account gets out of hand, don't be afraid to cancel the card, pay the obligations and then have an independent discussion about how you probably shouldn't share expenses on that card.
technology to your advantage
It may be easier to ask someone for money they owe via an app than face-to-face. There are many apps that can help you reduce the awkwardness of money conversations.
For instance, Splitwise helps you calculate who owes what when splitting the bill, no matter how many ways you need to divide it. This can help alleviate the pressure to calculate the bill by hand at the end of the meal, or in situations in which a restaurant or venue won't split your ticket.
In the case of the latter, apps such as PayPal and Venmo, or even an e-transfer come in handy to repay your friends without cash - that way, you can do it instantly and not leave your friend in a situation where they must hound you for it.
Since these apps are almost instant in transferring money, no one should be left out of pocket after putting the entire party's meal on a card or waiting for a joint credit bill payment to arrive.
When it comes to gift-giving, apps such as Giftagram allow you to pay for a curated gift via credit card and then the app will ask your recipient for their preferred shipping address.
While these apps can make some aspects of talking about money less awkward, Orr says you shouldn't rely on them to eliminate talking about money altogether.
She reiterates that no matter which app you're using, we still have to talk about money a little bit.
"The conversation still has to happen," she says. "In the end, we still have to communicate as people and apps can help facilitate that, but in the end, we still have to have the conversation."See related: Having 'the talk' about money with your spouse, Ways to overcome the stigma of debt
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