This post is by our regular contributor, Kristi.
Variety is the spice of life. Surrounding yourself with people from different backgrounds, belief systems, and practices helps keep your perspective on life fresh and exciting.
Having friends of all races, religions, and income levels keeps you grounded, genuine, and open to new ideas.
Most of the time, the variety of people’s quirks and living habits adds to their charm. It’s part of why you like to keep them around as your friends.
Sometimes though, certain behaviors and eccentricities can rub the wrong way. Especially when dealing with money and finances, uncouth or oblivious behavior may leave you questioning how much, if any, time you should be spending with certain people.
Here are 5 types of friends who can negatively effect your finances:
1) Cheapskate
We all have that friend who signs their name to the office birthday card without actually putting any money towards the group gift. They are the same friend who steals ketchup packets from fast food restaurants and falsely complains to companies about defects in a product to receive apology gift cards. They claim to be frugal, but they are really just big cheapskates.
Why they could harm your finances
They are willing to receive help, but they rarely give it to others. You might find yourself paying out more to cover your cheapskate friend. Cheapskates are the ones who will nickel and dime you to death to cover expenses that should be shared equally.
How to handle the cheapskate
Before letting them sign the group gift card, remind them that they haven’t chipped in for their share. If you feel comfortable approaching them, talk to them about behavior that you find offensive. Be firm and politely refuse if they try skip out on their percentage of a bill. If you can’t talk sense into your cheapskate friend, it may be time to cut them out of your life.
2) Moocher
The moocher has similar qualities to the cheapskate, but they are the friend that is more likely to take money from you without repaying it. They typically “forget their wallet” after dinner or ask if you can cover their movie ticket because they will “get paid tomorrow.”
Why they could harm your finances
Tomorrow comes but their repayment never does. They don’t take their debt obligations to their friends seriously. They may have every intention to repay you, but it never really happens.
How to handle the moocher
Explain that you are on a tightly managed budget, and you would be happy to help if you could, but it’s just not possible right now. Only carry enough cash to cover your portion of the meal or outing.
3) Jealous pessimist
This friend makes no secret of their contempt for success. They are practically green with envy towards anyone who has a better financial situation. Their relationship with money has been marred by life experiences or poor choices and they project the resulting negativity onto others.
Why they could harm your finances
Their bleak outlook on their own finances and their contempt for success may make you feel guilty. Their attitude could hold you back from achieving your financial goals.
How to handle the jealous pessimist
Encourage them to take steps towards financial independence. Show them tools they could use to make money on the side. If they are unwilling to try to change their situation, it might be time to put a little bit of distance between you. No one needs to be surrounded by constant negativity.
4) Competitor
The competitor is the one-upper. If you say you’re going on a trip to Disney, they tell you that they are going on a Disney cruise to the Bahamas. If you mention that you’re excited to see a rise in your portfolio, they go off about how their investments are flourishing. Every conversation ends with an explanation of how their life is better.
Why they could harm your finances
It’s easy to be tempted to engage in financial competition with this type of friend. Trying to reciprocate, by making them jealous in turn, will cause you to make poor money management choices.
How to handle the competitor
Competitors thrive on competition, so take away the competition. Don’t give in to the one-upping game. Keep your life details a little more guarded around the one-upping friend. Try to stay positive and grateful for your own situation without letting yourself become the jealous pessimist.
5) High roller
This friend wears expensive clothes, drives a luxury car, eats at fancy restaurants, and spends enormous amounts of money while shopping. They might be in a tax bracket that you could never even conceive of reaching.
Why they could harm your finances
It’s easy to get a bad case of keeping up with the Joneses syndrome when you spend a lot of time around a wealthy friend. You will probably let them talk you into attending events you can’t afford, and you will find yourself wasting money on items you don’t need.
How to handle the high roller
Most of the time, they don’t even realize that you are struggling to keep up with them. Be honest and tell them that you are on a budget. Ask them if they would mind going to dinner somewhere a little bit more in your price range. Instead of front row tickets to the concert with back stage passes, tell them that you can only afford mid-level seat tickets.
Be true to yourself
No matter which type of friend you are dealing with, try sticking to a budget when you decide to go out together. Be yourself and be true to your finances. Real friends won’t care if you aren’t in the same place financially, and they won’t pressure you into making any financial decisions that make you feel uncomfortable. If you have a friend who does make you uncomfortable, then it might be time to part ways, or just put a little more distance between the two of you.
Do you have any financially harmful friends? Do you recognize parts of yourself in any of these types of people?
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I’ve done a pretty good job of finding friends with similar financial values, but during college I was friendly with many “high rollers.” The sad part was that most of those people were living off of their parents’ money and getting accustomed to a certain lifestyle. Unfortunately, at some point most of them had to make it on their own, and it was much harder for them to learn to live within their means after they were used to living more extravagantly.
I’ve got a mooch family member. Some times I let it go when it doesn’t matter all that much to me, but I’m not afraid to draw the line in the sand occasionally.
We’re fine, for the most part, when it comes to friends and finances. Our issue is with family members. That makes it a bit of a different story I think – or at least the potential to be that way. :)
FrugalRules It’s definitely much easier to deal with issues with friends or acquaintances than with family members.
Mark@BareBudgetGuy Family can be tough. It sounds like you have found a good balance between amiability and respecting yourself and your finances to say no to them on occasion.
Ali_AnythingYouWant I had more “high roller” friends in college as well. I agree that they had a much harder time acclimating to living on their own after the parent’s money well dried up.
I’m blessed that my friends are almost never the problem. I think that comes with the territory of being in my 30s with kids. Friends are generally in the same boat and we are past the money issues of hanging out. We are lucky to get together! Now challenges with family? That’s another story!
indebtedmom Haha, troublesome family seems to be a trend! I am a relatively young mom, so most of my friends that I see regularly are moms in their 30s =] I had more trouble with friends and finances in college than I do now.
I have a few of each kind of friend, and you’re right, they can hurt your finances. My solution has been to try to be the person who spearheads the fun with activities that can fit any budget. Stuff like walking around the downtown area can cost anywhere from $0+ depending on if you choose to buy food, or shop, or if you’re just spending time with friends and taking int the sights.
Most of my friends are accepting of my lifestyle and choices and don’t pose a threat to my finances. I have has that high roller friend along with the moocher but somehow they’ve just been kind of phased out of my life as we’ve taken separate paths and it ‘s probably for the best.
Hannah UnplannedFinance that’s a great idea! Taking charge and planning out a budget neutral activity is a great way to stay friends with all types of people.
Chonce I have had the same types of friends who have taken separate paths as well. I agree that it was probably for the best!
I have reached a point in my life that I don’t care what people think about my lifestyle. I don’t beg or mooch off my friends but it is my money, my life, and my script.
Ooh, I know a few one-uppers. It’s really annoying!
I have definitely seen my fair share of the ‘Jealous Pessimists’ and the ‘Competitors.’ They – along with their negative energy – are best avoided.
Great post Kristi!! The jealous pessimist is the worst in my opinion, I try really hard to not be envious but to be genuinely happy for others when they are in a great financial situation and I find that to be hindered a bit when I spend too much time with someone who is always jealous.
Petrish @ Debt Free Martini Being true to yourself and living your life so that you are happy is great =]
houseoftre It really is!
Christina@EmbracingSimple Thank you! I try really hard to not be the jealous pessimist as well. sometimes jealously creeps in, but I try not to be vocal about it. I agree though, it really is hard to stay positive when you’re surrounded by constant negativity.
Excellent post. I have an associate that is a competitor. I stay clear away from them.
I got into a lot of trouble hanging out with high roller friends. Every time we went out to dinner, it was always an expensive night out and it was hard to suggest going somewhere cheaper. A few years ago, we adjusted our financial priorities and we see the high rollers a lot less, and I don’t miss the cash outlays associated with spending time with them.
Jason @ The Butler Journal Thanks, Jason! Having a competitor as an associate must be difficult! You don’t have as much say about how often you interact with them compared to having a competitor friend.
blonde_finance Good for you for sticking to what’s most important to you in your finances!
We have friends who love to have cookouts. Sounds frugal enough right? Not so much…They like to do it BIG! Ribs, Chicken, Burgers, Hot Dogs, Pork Chops, 10 sides, Beer, Soda, etc. I can’t even imagine putting that all together. They do it so big that you feel bad showing up with just baked beans and potatoe salad so we’ll bring a case of beer to gift as well. I tell Mr. Crackin’ it’s like going out to dinner at an all you can eat buffet.
Wow, you know I never thought about this, but you’re absolutely right. Luckily I don’t have too many of these people in my life. I do have 1 high roller who’s a great friend, which can be difficult when we go out to dinner, but we’re always in a group of 4 with my other budgeting friend who helps to balance it out. This is good advice to be on the lookout for these people.
Mrs Crackin the Whip That sounds like quite the spread!
BadassBudgets It’s definitely helpful to have like-minded people with you to help balance out your group of friends.
Jaime Lila Jealousy and pessimism are definitely not a healthy mix to have in a friend.