8 Friends Who Drain Your Wallet

Are your friends bad for our wallet?

by Jill Krasny

We all know them: the bridezilla who forces her bridesmaids to pay $500 for their gowns, the hapless friend who “loses” his wallet whenever the dinner check comes around and the spouse whose shopping addiction is threatening your mortgage, not to mention your marriage. In the world of money, these well-meaning friends do more harm to your wallet than good, and it goes without saying they can damage your self-respect, too.

[See the 3 Rules for Lending Money to Friends]We decided to round up these common culprits by asking a few readers to share their tales of wallet woe. The stories weren’t pretty, but thanks to our arsenal of personal finance experts who lent a sympathetic ear and their sage advice, these readers should never feel peer-pressured to overspend again and, more importantly, neither will you.

The Charlie Brown

Better known as the guilt tripper, Charlie Brown is the money-toxic friend who’s perpetually plagued by finance issues and makes you feel crummy for spending on things you enjoy. Here, we present Exhibit A:

Linus: “Hey, Charlie! Want to try Burger King’s new stuffed steakhouse burger? I heard it’s great!”

Charlie: “Aw shucks, Linus, I can’t afford it. I only have 35 cents to my name and that burger costs at least $4.”

“Whether you’re splurging or saved up, if somebody is expressing a sort of pressure to you for you to either say, ‘Oh my treat,’ just say, ‘What do you want to do?'” suggests Julia Scott, a journalist and founder of BargainBabe.com. “Say hey, ‘I’d love to see you, let’s get together,'” she says. But “if somebody is the worrywart about money, put the ball in their court so they can choose a low cost activity that takes the pressure off.” Or suggest something free to do instead.

The Bridezilla

Who doesn’t love poking fun at bridezillas? They’re catty, self-absorbed and love to splurge on their big day—that is, until you feel pressured to spend along with them. Before you know it, you’re shelling out $400 for a gown you’ll only wear once, a four-night booze fest in Vegas and not one, but two, bridal showers. Toxic!

Carl Richards, the brains behind those clever New York Times napkin sketches that explore consumers’ relationship with money, says the key to handling these brazen brides-to-be is to discuss these costs upfront. “It’s just really important to have boundaries,” Richards says. “Talking about it early and often can help. The last place you want to be having any discussion is at the cash register when all the preparations have been made and there’s no time to think about or explain the consequences.”

Scott agrees: “Declining to participate [in the wedding] is a great way to get out of money constraints,” she says, “especially if it’s someone who isn’t close with you.” But if the relationship means more and skipping the nuptials will put it on ice, Scott says not to do it. “Think of spending the money as an investment in the relationship instead.”

‘The Secret’ Spendthrift

The law of attraction might bring great abundance and joy into your life, but it certainly won’t pad your wallet—just ask the real estate agent Richards knew who once leased a Bentley to upgrade his image. “He wrote affirmations that he was going to make a million dollars next year selling real estate,” Richards recalls, “but pretty soon he realized that the universe doesn’t write a check and he got into major debt.”

“Secret” Spendthrifts are especially tricky to deal with because they “care more about image more than reality,” Richard says, and the “danger” for anyone associating with them is that it looks fun to have fancy things rather than create realistic financial goals to earn those coveted items. Pretty soon you can be living beyond your means as you try to keep up with your friend, or even worse, buy into his sham of a budget strategy. “Putting too much faith in creating an image of success” can be misleading to everyone involved, warns Richards. “You have to remember that hope is not a budgeting strategy.”

The Perpetual Winner

This money-toxic friend never seems to lose, or at least that’s what she wants you to think. “My dentist will not stop talking to me—with his hands in my mouth—about all the great investments he’s made. He bought Google at this time, sold this stock at the right time, etc., etc., etc.” Richards says. “That can be just as toxic because you walk away from those interactions thinking, ‘God what a loser I am! How come I’m not leveraging to invest in foreign currencies?'”

Besides inciting serious wallet-envy, these friends mask a real insecurity. “The fact is that the tax returns don’t lie,” says Richards. “There’s usually another side to the story that nobody talks about.”

To shirk their bravado and feel like a winner yourself, “imagine these people as a tax return or a balance sheet,” says Richards. “When they start bragging, just think, ‘That’s great, but if I saw their tax return, it might tell a different story.’ You just have to remember that chances are that if it sounds too good to be true, chances are that it is.”

The Mooch

When she was in her 20s, pharmacist Nath Jones didn’t mind buying her friends a drink or two. But once they started charging “$200 bar tabs for two and three $15 martinis” on her credit cards, she tells MainStreet, “I lost about 15 really good friends as I changed my attitude about generosity. My rule went from ‘good times and generosity’ to ‘Would this person spend this much on me?’ Usually the answer was no.”

The next time the Mooch in your life comes around asking for a handout, just say no. “It’s insanity!” Richards exclaims. He suggests telling your friend he made a mistake by enabling the behavior. “If that’s bothering you, stop going shopping with the guy.”

If you’re dealing with the Dinnertime Mooch, a popular variant of the usual Mooch, here are other ways to dodge his behavior:

– Research and plan what you’ll eat ahead of time, then only bring enough cash for your order.

– Do not, we repeat, do not flash the plastic.

– If you’re reluctant to dine with this friend—or even meet the friend, period—get busy. Schedule an appointment to be somewhere, says Richards. “There’s a difference between lying and concealing information. Some things are better off unsaid.”

Mr. Big Stuff

An ancestor of the Perpetual Winner, Mr. (or Ms.) Big Stuff puts a price tag on friendship and feels compelled to one-up everyone. In the end, it’s all talk, talk, talk, but the negativity clouds your mind—and makes you spend just to keep up with him.

Presentation specialist Constance Dunn has “a close friend who is a classic,” she says. “She’s a moneyed gal who must quench her every whim, and have the best seats or suits in the house or the night’s a bust.” Thankfully, Dunn “changed this dynamic via two actions: Giving back by doing no- to low-cost things that she finds invaluable, such as helping her with her pets or mail and having a straight conversation about our budget differences,” Dunn says, “and taking her to elegant places that are also affordable for me.”

Another way to address the issue, says Scott, is to “talk about things that aren’t money.” If the conversation still doesn’t change and you decide to bring up the issue, do it discreetly. “Never chide a friend in front of others,” Scott says. “Do it when it’s between the two of you and let them know it makes you uncomfortable.” Just don’t ask them to change, she warns. “Letting them know it makes you feel uncomfortable is enough. If they know that, they might be more careful about you.”

The Shopaholic Spouse

Michael Duncan, managing director of United Capital New York, sees his fair share of shopping addicted spouses, including twice-wedded/Secret Spendthrift wives who “didn’t define what their second relationship would mean to them before they got married” and plunged themselves into bankruptcy while hoping their second husband would pay off the debt.

The fact is “money conversations are very difficult for spouses,” Duncan says, “and usually the lack of them stems from insecurity of some sort, although sometimes there’s no basis for the insecurity at all.”

[See In a Relationship with a Shopaholic? Tips for Coping]

The only solution to curb your spouse from overspending, he adds, is “open conversation.” To improve his clients’ communication with one another, he devised the Goals Clarification game. “It’s a way to order and rank your goals which opens up the conversation for what they’re trying to accomplish,” he says. To play the game yourself, grab your spouse and a deck of cards then write some goals on each of the cards. Separate the deck with your spouse, then rank them by importance. “You might find you’re not on the same page,” says Duncan, but at the very least it starts the conversation.

The Macroeconomic Moron

Ramit Sethi, author of I Will Teach You to Be Rich, hates this money-toxic friend the most. “Every day this guy is angry about the government, shaking his fists and saying ‘Obama did this, look at Wall Street that,'” he says. “Then you ask them, ‘Have you read even one book about personal finance?’ No. ‘Have you contributed to your 401(K)?’ No. It’s more fun to complain than automate their finances.”

The way to shut these misinformers down—and keep them from making you fear going outside—is to realize that tax policy doesn’t affect your wallet at an everyday level and put them in their place. “Tell them, ‘That’s interesting, What do you think that I should be doing with my money?'” Sethi says. “Try to be more specific. What you will both realize is it’s fun and easy to talk about things that are up in the air. People usually have no idea what they’re talking about when it comes to day-to-day money management. Ask what they’re going to do and watch the abstraction fall apart. They’re just ranting about something abstract.”


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