13 Nov - 5 min read
Socialising, no doubt, costs money. When we go out to meet our friends or have them over at our homes – this invariably costs us. But this cost is a necessary part of everyday life and it is not what we mean by a money draining friendship.
Sometimes, however, a friendly relationship can turn into something much more dire for your finances if one or all of these friends start affecting your financial decisions.
There’s nothing wrong with having a little bit of friendly advice with regards to the stock exchange. The problem begins with the friend who is always looking for the ‘new’ or ‘avant garde’ way of investing in schemes that are either just a little shady or outright pyramid schemes.
Friends like these aren’t bad people – they really do want money pretty badly and are usually easily persuaded by the lure of great riches. You want to trust and believe ‘this time will be different’ but the past 28 times you invested in his proposed ideas came to naught.
Fix: Keep the friendship alive and your finances intact by keeping your wallet shut. If a new investment does appear legitimate; speak to a personal finance advisor or stock broker about this option and see what a neutral party has to say.
As mentioned, socialising will naturally come with costs but it should not be a case of Marini’s on 57 every time you want to have a quick catch-up. The ‘Fine Dining Approach’ doesn’t just mean food of course; it can even mean the kind of accommodation during a joint holiday or the gift expectations during a birthday.
This is difficult because peer pressure is real – no matter how old you may be.
Fix: Honesty is certainly the best policy so don’t be afraid to speak up when you believe you cannot afford the next luxury junket. Sometimes, more affluent friends simply don’t realise when their tastes are imposing on those with realistic budgets so speaking up may help keep everyone in the green and in each other’s good books. A good friend will understand that not everyone’s paycheque and commitments come in the same sizes and thus – some compromise is in order for a healthy friendship.
They don’t mean it – really they don’t. They just took the part in the salesman’s handbook about approaching your friends first a mite too seriously. The problem arises when you feel obliged to buy what they peddle – whether it’s a new MLM (multi-level marketing) product or an insurance product (yup, sure we all have that one overzealous insurance agent friend) simply to show your support to a good friend. It doesn’t help when they make it a point to bring up the topic every time you meet.
Fix: Sometimes, the zombie salesman approach isn’t meant and the friend may not be aware of the strain he/she is putting on the friendship. Again – calling them out on it is the only way to keep good ties to both your friend and your banker. Of course, be the supportive friend and assure them that if you do need whatever they are selling in future – you will be sure to contact them.
If the honest approach doesn’t work – call a communication time-out until they decide to respect the fact that your friendship does not equate constant access to purse strings.
It’s a regular occurrence to have our friends and family help us to choose a banking product. This is because of the level of trust. The problem arises however, when one blindly trusts every recommendation without first checking the options available.
In every category of banking product, be it a personal loan, credit card or home loan – variances exist in the type of product and how it caters to each customer. For example, you have flexi loans, fixed loans, Islamic loans – plenty in the market to suit different needs. The product that suits a friend or family member – may not necessarily suit you.
Fix: These friends mean well and in fact – are the kind of friends to keep around as they may one day bring you news of a fantastic new bank promotion. The problem however, arises when we take every recommendation without first checking the suitability for ourselves. It is always imperative to make your own enquiries, check the available products and consider your own financial status and needs before selecting.
Have you been told of a great banking product? Look it up on our product pages to find out if it is the goods or if there is something better for you out there.
Friends are an important part of life but that means they can also directly influence a lot of the big decisions we make in life. It’s imperative to ensure that whatever our emotional attachments; we keep a cool head and weigh the pros and cons when it comes to making financial decisions.
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