5 Reasons Why I Always Pay Friends Back Quickly

Mixing friendship with finances is one area of personal finance that I don’t usually toy with.  Swapping money among friends and family is like swapping spit among friends and family: it always turns into an awkward, sloppy mess.  (So… maybe that wasn’t the best analogy, but it gets the point across, right?)

The whole situation just gives me all sorts of knotted, uneasy feelings deep in my stomach.  It sets off that red alert in my gut that I should always listen to because it’s always right.

Nevertheless, there are those instances where the situation of money crossing hands between people in your life just can’t be avoided.

Whether it’s a group road trip or a group dinner or a group of season tickets, the truth of the matter is that sometimes we either have to temporarily pay for others expenses or have someone temporarily pay for our expenses.  The unfortunate side of these situations is that not all people in our lives are as money conscious as we are (or, on the other hand, maybe they’re the money conscious ones).  So, if you’re going to foot the bill for some of your friends when they promise to pay you back for their share, it’s important to do business with the ones you can trust.

I always prefer to be the borrower in these types of situations.  My reasons are twofold:

1. I know I’ll pay the person back quickly.
2. I don’t want to be the one who has to incessantly nag my friends to pay back their overdue debts.

When I am lucky enough to be a borrower in these situations, here are the reasons why I always pay my friends back fast:

Your friends are not credit cards…  Say it with me now:  my BFF’s name isn’t Visa, MasterCard, or American Express.  If it was, they’d be charging your a$$ a sweet 30% of interest on a daily basis.  How nice of them to waive such a lofty fee!  When I go into these group-funded events, I always have the money ready to go before we pull the trigger.  Why?  Because if I were paying for the event on my own, I’d need to have the money ready to pay out of my own pocket of course.  Why would I ever buy something that I didn’t have the money to afford?  That right there would be a personal finance fail, my friends.  The moral is simple: if you’re going in on an expense with your friends, have the money ASAP or you risk using your friend as a credit card.  Not cool.

You get a reputation either way… Remember that girl from high school who had that reputation for being a partier?  And that other guy who had a rep for being a lazy student and a cheater?  Well, those reputations didn’t just appear out of thin air, they had to earn them.  And so will you if you start using your friends for their money.  How would you like your name to float around your circle of friends as the one who can’t be trusted with money or doesn’t even have $100 cash to their name or uses their friends when they don’t have cash?  Doesn’t sound like the reputation I want.  On the flip side, if you consistently pay your friends or family back on time, you’ll more than likely create a good reputation (unless, of course, your friends find it absurd that you pay them back on time…).  People near and far will proclaim just how sexy your debt pay-off skills are and you’ll forever be known as the friend that can be trusted with anything … or something like that.

Because my finances are under control… Being in debt always made me feel anxious and uncomfortable (thank God I don’t have to deal with that anymore!).  I’m sure those of you that are in debt (or have been) know exactly what I’m talking about.  It’s not fun going to work everyday knowing that most or all of your income isn’t even yours – it’s owned by some creditor.  In general, I just don’t like owing anyone or anything money, so I pay people as fast as possible.  It’s one less thing to worry about and stress over and who needs more stress added to their life?  I can’t imagine going through every day knowing that I owed someone money that I couldn’t pay and worrying about when they would ask me about it and how much longer I could avoid them.  In the end, it’s simple: don’t share costs with friends unless you have control of your finances.

It creates a good working relationship… On the bright side of this topic, there are those times where every friend in the deal is money savvy and pays up relatively quickly.  Not only does this make the situation that much more enjoyable, it also sets the groundwork for an awesome future working relationship.  If you know that Friend A always pays their personal debts timely, but you always have to nag Friend B endlessly before they pay you back, you’re much more likely to do business with Friend A in the future.  And let’s face it, Friend A is probably cooler anyway.

Because it’s just rude not to… Friends are friends for a reason.  They’re there for you when you need them, they make you laugh, they make you think, they make you happy.  A good friendship should be cherished, not tarnished with buried animosity from past debts.  In my opinion, when a friend uses you to foot the bill and doesn’t pay you back on time, they’re not really a friend at all.  In fact, they’re probably pretty lame.  Friends should be dependable and take stress away from your life – not add it.  Don’t be a bad friend: If you’re going to swap money among your pals, show them common courtesy and either pay them back on time or politely reject whatever the invitation may be.

Do you split costs on certain events or expenses with friends and family?  Have your experiences been good or bad?  Do you have a great story about swapping money with friends?  Spill the details in the comments!