Your friends might not be who you usually talk to about money, but it’s important to be able to open a conversation about it. Whether you need to cut costs when you meet up or want to share your plans or worries with them, you should be able to talk about it with your friends.
Telling your friends you can’t afford to go out
Your friends are your friends for reasons outside of how much money you make or have to spend.
And it’s unlikely they’ll stop spending time with you just because you can’t join them in activities that cost a lot of money.
It’s important not to assume they know what disposable income you have, or if you’re under pressure to keep up. If you don’t tell them, they won’t know.
Here a few tips that could help:
- If you're saving for something, explain that this is why you’re looking for ways to keep costs low.
- Take control of meet-ups and arrange to do free or cheap activities, which can be just as much fun as expensive ones. Make sure you only commit to things you can afford.
- Ask your friends if they would be up for being a ‘savings supporter’ – this is someone who helps you reach your saving goals.
- Tell them what you’re saving for and how much you need. Your friend can then have regular conversations with you to check on your progress and support you on your journey. Why not even exchange support – how could you help them?
Join our Facebook group
Join our private Budgeting and Saving Facebook group for money-saving tips and support from a community of savers.
How to deal with a friend asking to borrow money
If a friend is asking to borrow some cash, it can be really hard to say no. You don’t want to lose them as a friend because of a fight about money, but at the same time, you care about them, so want to help them out.
Lending money to a friend can put a strain on a relationship. This is especially if you would find it stressful to chase them for the money they owe or you’d would struggle if they didn’t pay you back. If this is the case, it’s probably best not to lend the money.
It’s important not to feel guilty about not lending a friend money. You can support them in other ways. For example, tell them about the guides we have on our website, such as how to improve your credit score and the other guides under Managing money well in our Budgeting section.
You can also support them by saying no – after all, building up debt that might damage the relationship isn’t going to help your friend.
If you’re thinking about loaning money, ask yourself the following questions:
Can I afford it?
Look at your own budget to make sure you’re not going to get yourself into money trouble first. Can you afford to not get the money back? To help you work this out, you can use our free and easy-to-use Budget Planner.
Can they afford it?
If they won’t be able to pay you back in full, you’re opening yourself up to a whole world of trouble. If they can’t prove they can repay you, don’t lend them the money. You could even suggest they read about the pros and cons in our guide Borrowing money from or lending to friends or people you know.
How formal is this arrangement going to be?
It’s a good idea to get something in writing, clearly spelling out how much will be repaid and when.
It’s also important to keep records of when the repayments are made, so you both know exactly how much is still outstanding.
Having a formal agreement in place can protect you. It’s hard to think about, but if the borrower died with the debt unpaid – you’d need proof to claim from their estate.
If a large sum of money is involved, it’s important to seek professional advice from a solicitor or an accountant to make the arrangement more formal.
Getting loaned money back
Asking friends to pay back the money they owe you can be stressful. It’s especially bad if you know they’ll struggle to come up with the money.
If you value your friendship, it’s important not to get confrontational when asking for your money back.
Perhaps always they’ve simply forgotten, and then try to jog their memory with a few well-placed hints.
Having discussions about lending and borrowing cash can sometimes be a bit easier if you do it through texts or email.
This also means you have everything in writing about how much cash is involved and when it’s going to be paid back.
It might be worth adding a sense of urgency, so your friend understands that you now need the money back. For example, phrases like ‘I’m sorry to ask this, but I really need that money back by XX because I have to pay XX back’.
If all discussions break down and you don’t think you’re going to be able to get your money back just by talking, as a last resort you can get legal help. This will involve making a court claim for the money.
Find out more about making a court claim for moneyOpens in a new window at GOV.UK
It’s worth being aware that making a claim isn’t free – it starts from £35 when you’re claiming up to £300.
If you do decide to go to small claims court, you’ll be asked if you want to use the Small Claims Mediation Service first.
This is free and will be provided by the court. If it doesn’t work, the case will be put forward for a hearing in court.
If loaning your friend money now means you are struggling financially, you might need to adjust your budget. To help you do this, use our free Budget Planner.
How to talk about money
If you need to talk to someone about money but aren’t sure how it will go, our guide Talking to friends about money (Opens in a new window) (PDF/A, 4.3MB) will be useful.
It includes tips on how to start a conversation, what to do if you think the conversation might be difficult, and how to deal with negative reactions.
