Why Friends and Money Don’t Mix

Think back to some of the most important times of your life… you’ve most likely experienced them with friends. Most of us has a BFF who’s been there for us through good and bad. There’s the BFF who helped you through more break-ups than you’d like to remember… she may have even helped you egg a few cars. There’s the BFF you go to coffee with, the one you party with and the one you go to the gym with.

If you want to keep that friendship strong, here’s one important piece of advice – keep money out of it.

Money and friendships don’t mix!

I used to laugh at this advice. I always thought my friendships were too strong to be affected by money… not so. Here are three ways to ruin your friendships by throwing money in the mix.

1) Lending friends money

A few years ago, one of my good friends asked me to lend him $800. He said he’d pay me back in a few weeks.  We’d been friends for so long and I hated seeing him in that situation, so I gladly lent him the money. I never saw the money again. Despite the fact that I didn’t harass him about the loan, he felt awful and couldn’t face me because he couldn’t pay me back… and then he disappeared.

I haven’t heard from him in years. I lost the money AND the friendship.

I’ve never lent friends money since. It’s just not worth losing a friendship over a loan. These days when a friends asks to borrow money, I tell them how much I can give them not lend them. If I can’t afford to give anything, I don’t. This has kept many of my friendships in tact and some have even paid that money back even though I never expected them to.

Give what you can afford and never expect to see it back. This is the only way to mix friends and money.

 2) Going into business together

Being best friends is one thing, but being able to work together is something completely different. You have to be like-minded to be successful as business partners, which is why finding a good business partner is such a hard thing to do.

Think back to school projects you’ve had to work on with classmates. Didn’t you want to strangle that one girl who never really pulled her weight?

The same goes for business – one may end up feeling like they’ve put in more work than the other, so they expect to get more of the profit. Unfortunately, it rarely works that way unless you’ve discussed it in advance. Even then, it can be awkward.

You can always sever relationships with business partners, you can’t do that with friends without severing your friendship as well.

3)  Co-signing loans for friends

Two years ago, a friend asked me to co-sign a loan for her. With a $34,000 debt, I wasn’t in any position to co-sign a loan for anyone. Another friend co-signed her loan and their 12-year friendship ended 6 months later when she defaulted on the loan and the co-signer got stuck with it.

Needless to say, it’s awkward being the friend in the middle.

We love our friends, they’re our coffee buddies, wine buddies, crying buddies and party buddies… but friends and money simply do not mix. It almost always ends up badly.

Have you ever mixed money with friends? How did it turn out?


Jen is a Headhunter who started her recruitment agency while juggling a $34,000 consumer debt. She decided to immerse herself in personal finance and managed to dig herself out of debt in one year. Jen writes humorously and candidly about her journey starting from the days she was swimming in debt to to debt-free living at shebloggs.com.

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