Frugal Living » Money Etiquette

Money Etiquette

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Finances seem to be on the tip of everyone’s tongue lately, but it’s one (often taboo!) subject you should address! Years ago, it was uncouth to ask a person about their personal finances, including how much they paid for an item. Still, as of late- people seem to have lost all sensibility when it comes to basic money etiquette.

Addressing sticky financial etiquette situations with your friends and family requires a bit of finesse, here are a few tips on dealing with standard money etiquette faux pas without losing your cool.


Blatant Nosiness

The Issue: You recently purchased a big-ticket item, such as a home, a car, tv, etc. and your nosy friend inquires as to exactly how much you spent on it, and quite frankly, you don’t feel that it’s any of her business.

Our Take: Financial inquiries tend to feel quite invasive; the key to handling this type of question is to realize that you are not obligated to answer. You can gently avoid this money etiquette question by answering, “perhaps a bit more than I should have, but I’ve wanted to get it” or “the price was definitely within the guidelines I’d been searching for” and then redirect the conversation by changing the subject.

Lending Money

Issue: A friend came to you in dire need of some money, and you generously bail her out, however, after she fails to make her payments on time (or not at all!) you spot her with expensive new shoes (or purse/ electronic gadgets, etc.) Should you say something or does having good money etiquette mean biting your tongue?

Our Take: You should say something, but don’t jump to conclusions! Her latest accessory may have been a belated birthday gift, or contest win, etc. Don’t naturally assume that she purchased the item on her own while owing you. Handle her gently and say, “Our friendship means a lot to me, and I don’t want anything to come between us, but you’re a bit late on your loan payment to me, and now you have this lovely _____. I’d really like to talk about it with you.”

If your friend experienced a bender, this might be enough to get her back on track. If not, and she becomes defensive, congratulations, my friend, you just learned the number one reason why you should never lend money to friends.

If you feel strongly compelled to lend money to friends or family, put everything in writing- the amount lent, the terms or repayment, interest, if applicable.

Splitting the Check- Who should foot the bill?

Splitting the Check

Issue: You meet with several friends for an evening out, and you dine lightly (entree salad and a glass of wine) while a few of your friends lavishly indulge in the more expensive fare. When the check arrives, someone suggests that the bill be split evenly with the rest of the table.

Our Take: The easiest way to avoid this sticky situation is to handle it before ordering. Most servers will happily divide the checks on the table if asked before ordering. If you have a friend that prefers to split after the meal, politely ask for the tab and tally your meal, taxes, and tip to cover your expenses.


Wealthy Friends

Issue: A good friend asks you to join them for dinner or an event that’s not within your current budget range, but you don’t want to tell them you’re too broke to go!

Our Take: We all have friends or family that are a bit wealthier, perhaps their kids are grown, and yours are still at home, maybe you’ve recently been laid off from work. Regardless, if the meal or event isn’t within your budget, suggest meeting for lunch instead, which is considerably less expensive, or if that too isn’t within your reach, be honest with your friend.


Tell them that it’s not in your budget right now, but you’d like to meet for a drink or dessert instead. There is no shame in living within your means!


Group Gifting

Issue: A collection basket passed around the office for a gift for a co-worker. Perhaps you just recently started and don’t know the person well; maybe you aren’t even friendly with her, are you obliged to contribute anyway?

Our Take: Chip in, if you WANT to. You are not obligated to buy a gift for anyone, if you don’t know the person, or if it’s not within your budget, or maybe you can afford it, but you don’t want to spend the money right now, don’t.


It’s a Gift- contribute what you can, if you’d like to. Some office celebrations occur so frequently that they become burdensome. As a real estate broker, our office often passed around the collection plate. People seem to forget that you go to work to GET a paycheck each week, not to have help in spending it.

If your office frequently collects for various gifts – suggest that they choose a month and have everyone contribute a minute amount weekly to the collection pool — perhaps $1 or $2 per person. By the time the event rolls around, there should be plenty of cash in the kitty to cover the expense.


Generous Friend- Lousy Tipper

Issue: Your generous friend invites you to dinner and covers the tab, but as you’re leaving, you happen to see that she jilted the server with a rather lousy tip, which makes you cringe. Do you walk away knowing the server got a bum deal, or do you call out your generous friend on her not so great tip?

Our Take: Having been a waitress for years as a teen, I can tell you that servers do NOT make a lot of money. People sometimes falsely believe that they get paid at least minimum wage on top of their tips; this is NOT so.


With that in mind, if a friend has generously invited you out to lunch or dinner and covered the check, you could politely say, “I enjoyed this lunch together, and I thought the service here was wonderful. Would you mind if I left her a little something extra?” or you could quietly slip a few dollars under your plate without your friends’ knowledge to avoid appearing ungrateful, or worse, as a judgmental guest.

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