Sex, politics and religion used to be the three pillars to avoid at social gatherings, but there are more that could be added to this list – especially when it comes to personal finances.

A recent study from US bank Wells Fargo actually found that the majority (44%) of respondents found personal finance was the most challenging topic to discuss. To put this in perspective further, the next most dreaded topic was death (38%), followed by politics (35%) and religion (32%). Taxes were also included in the top five hardest topics to discuss, with 21% of people hating it the most – which also counts as a personal finance point in some situations.

Similar results have come from surveys around the world. A report from Lloyds Banking Group in the UK, for instance, found that a lack of adult conversation around personal finance could be hurting children’s financial literacy.

The report also said a there’s a number of reasons money is such a taboo topic, with 18% of respondents admitting they think it is impolite to talk about money, 17% not wanting to appear boastful, 15% saying they feel embarrassed when talking about their finances, and 12% feeling insecure when the subject comes up.

“It’s not surprising people don’t want to talk about money, investments, tax strategies, or even how much to put aside for a child’s education,” Wells Fargo’s director of Retail Retirement, Karen Wimbish, said when the results were released.

“But not spending time today to think about the future can be costly in the long-run. I think of personal finance in the same vein as my health—I wouldn’t keep concerns about my physical health private. I’d consult a doctor or talk to a friend or family member about it.”

Just as with many of the other topics Wells Fargo’s survey mentions, talking about money with friends and family can be incredibly uncomfortable. But there are times when it has to happen. Whether it’s money owed to you, a debt you haven’t paid yet or explaining you’re on a budget for dinner, eventually you will have to talk about it.

This guide aims to make it a little easier by looking at a range of common scenarios and ways to approach the topic that take some of the stress out of talking about money. That way you can keep awkwardness to a minimum and stay clear on your financial goals in any situation.

On This Page

Introduction

1. Splitting the bill
2. When someone owes you money
3. When you owe someone money
4. When you need to borrow money
5. When you can’t afford something
6. When you’re asked how much you earn

Conclusion

Splitting the bill

A situation that can often make people high strung, particularly when it’s not clear exactly how the bill will be split. Will you go for the easy division based on numbers, or by items you specifically ordered? What if someone wants to split straight down the middle, but there’s a big chunk of the bill that has nothing to do with you?

While splitting the bill can leave a bad taste in your mouth, there are actually ways to avoid splitting hairs over the scenarios above.

According to etiquette expert and Mannersmith president Jodi R.R. Smith, there is no set rule that all diners of all ages must obey when it comes to splitting the bill, but having a clear idea of what works for you and planning ahead will help. In an interview with Forbes, for instance, she recommends carrying cash if you want to pay for just your share.

“If you’re being cost conscious, make sure you have tens, twenties, fives and singles so that it makes it easier to split at the end,” she says. That way you will be able to pay as close to the exact amount as possible, and also put your money on the table before the question of how to split comes up.

It can also be a good idea to address the question before you even sit down. If there’s a big party of you, asking wait staff for separate bills at the start, or explaining what you want to do will clarify intentions so that everyone is on the same page and you can order what you want without worrying about how much other peoples meals will cost you.

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When someone owes you money

You know that friend who borrowed money from you ages ago for a concert ticket? How are you going to bring it up? Well, as Apple might say, “there’s an app for that”.

A number of mobile banking apps now let you set up payments owed and due, with notifications for the people involved so that they are prompted to address it. NAB’s mobile banking feature Flik is one that is actually designed around this kind of scenario.

“Did you ummm…ever pay me back?” the NAB Flik homepage says.

“Asking your friends to repay you can get super awkward. Luckily you can avoid this by creating a QR code in NAB Flik for them to scan, so they can repay you instantly. If you both have NFC enabled phones, you can also tap them together,” the site says.

But dealing with this situation also comes down to you and your friends. If sending your friends a notification out of the blue seems a bit indirect, for example, you could be better off bringing it up with them in a conversation. It’s not necessarily going to be the most fun thing to do, but it will at least get the issue out into the open so it can be cleared up as quickly as possible.

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When you owe someone money

Some people don’t know how to bring up the fact that you owe them money (and most of us have been there), so if you’re aware of it then it’s good to try and address it head-on. If you have the cash to repay them, you could give it to them in person, ask for their account details or clarify the amount owed to remind them of it.

Just as with being owed money, you can also make use of a wide range of mobile banking apps that will let you pay them by mobile number or email address. The important thing is to let them know that you are aware of it, rather than taking action or avoiding the issue altogether, which could alienate you and your friends.

While owing someone money is a less common issue than someone owing you money, it is a good idea to be aware of how to deal with it. After all, some people might not care so much about lending $30 for a meal, while others might hate owing anyone anything. Acknowledging the debt, however, will help both parties stay on track with both finances and friendship.

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When you need to borrow money

Asking for money is a hard thing to do, especially when it’s with your nearest and dearest instead of a more anonymous banker.

Canadian etiquette specialist Carey McBeth says that it’s important to consider both sides of the equation before asking anyone close to you for a loan.

“As soon as there is money involved both people get stressed,” she says in an interview with The Huffington Post Canada.

“Before you borrow money, let the person know in detail how you plan on giving them the money back.”

McBeth says this principle applies regardless of how much money is changing hands so that it is less likely to become a point of contention. The HuffPost article also points out that asking the right person is an important part of borrowing money from friends or family.

“Not only should you know and trust the person (how uncomfortable would it be if you didn’t), but you should also be able to communicate with them openly.” If not, it might be a sign to ask someone else or get by on your own.

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When you can’t afford something

Whether it is a meal at a fancy restaurant, tickets to a show or an invitation to a wedding, letting people know you can’t afford it is a pretty confronting thing to deal with. The Wall Street Journal has even published a whole article with different suggestions from experts on how to tell someone you can’t afford something. Three of the best tips are:

1. Telling people in advance what you can and can’t afford
2. Saying that you like the idea but need to check your budget and get back to them before making a commitment.
3. “Blaming” or explaining that your financial adviser is onto you about your spending.

As with other scenarios, the way you handle it could also be dependent on the people and situation. If it’s when you’re making plans for a trip, for example, it might be as simple as saying you’re on a budget but happy to find or plan for that (let’s face it, most people would be cool with saving some extra money anyway).

If it’s a friend’s wedding, on the other hand, it could mean offering to contribute some of your skills instead of buying a present from a store.

But whoever and whatever the situation is, it’s important to speak up about it as soon as you can to avoid further awkwardness, resentment or even financial hardship.

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When you’re asked how much you earn

This one depends on how well you know the person asking and whether or not you can gauge why they are asking.

If it’s a workmate, or friend of a friend, then it could be a completely inappropriate question. If it’s someone closer, on the other hand, it could be their way of opening up a conversation about their own money situation.

The Guardian reporter Oliver Burkeman also says that the question of earnings can also be a cultural thing, so someone might not realise it is inappropriate to ask about it.

“…according to a couple of recent surveys, only 17% of Americans are uncomfortable talking about their earnings, whereas 63% of Brits are,” he says in an article looking at the different salaries people in the UK earn.

Burkeman reminds us that our salaries are not really tied to our value as people or even to the work that we do. But perhaps the best part of this article is his response to the question he is asking:

“And my income? Higher than the average. Quite a bit lower than it should be. Thanks for asking, but I don’t really feel comfortable discussing it.”

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Conclusion

There are all kinds of situations when money could feel as if it’s getting in the way of your friendships, and personal finances are often a huge stressor for many people. But the scenarios and insights provided here highlight just how many ways there are to deal with money between your friends.

And whether you are choosing how to split a bill, explaining you can’t afford something, tackling the question of your income or dealing with any number of other money matters between friends, now you can do it with more awareness about the etiquette surrounding this touchy subject. In a way it means that personal finances don’t have to be taken, well, so personally.

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