stuartpilbrow / Flickr
This is a post by BargainBabe.com writer Yazmin Cruz.
With the economy in the hole and job losses mounting, many people could use extra cash – and may ask turn to friends and family for a loan. While some people regularly accept money from parents, others may be asking for the first time. This is a sticky situation.
“There’s the potential for personal problems and financial trouble when it comes to lending to those close to you,” states a recent USA Today story. “Experts advise you to treat the deals like the business transactions they are.”
I agree. I would have to be in a real pinch with no (more…)
confidence, comely./flickr
I’ve always had trouble staying on budget when I shop at Target and never knew why. But when I shopped with my father this past weekend, I realized my downfall was never Target – it was my enabling friends.
Here is how to detect if your friends are passing on bad shopping habits and a few solutions to avoid letting them put a dent in your pocket book.
Bargain Hunter
Many of my friends fall into this category. They have an eye for good deals and can talk their way to better deals. But their savvy ways put me in a hole because around them I find myself buying things because it’s on sale and not because I need it. If this rings true for you, then your friend is an enabler. When shopping with them, stick to your shopping list without one slip up. Try carrying cash instead of plastic to make sure you stay on budget.
The BIG Spender
Have you noticed that some people can’t seem to keep their money in their pockets for long? Whatever catches their eye they must have. It’s almost as if their money burns a hole in their pocket. If hanging out with these friends makes you burn money faster, consider finding a new shopping buddy. Instead suggest activities away from the mall – or you’ll pay for it in the end.
The Latest Thing Lover
You know exactly the person I’m talking about: the hipster in your group that is on top of all the latest trends, from fashion to technology. If it’s new, they’ve shelled out the big bucks for it. Good for them if they can afford it, but it’s really hard when they show off the latest cell phone and tease you because you send smoke signals to communicate. If you find yourself buying one just to fit in, cut them of and move on. This person may be lovely but you’re on a mission to spend less and they’re not helping.
Mr. and Ms. Mooch
This is possibly the worst out of the bunch. These friends are not only teaching you bad spending habits, they are making you pay for theirs. You’ll recognize these “friends” as the ones that always seem to forget their wallets or tend to disappear when the check comes around. If you’re always stuck paying the bill for things, a simple reminder and a sweet “do you mind covering me this time?” should do the trick.
I find setting ground rules with friends from the beginning lets them know what to expect. At the end of the day, it’s you, not your friends, who have to pay your credit card bills. Remember this and you won’t get talked into spending money you don’t have on things you don’t need.
How do you deal with enabling friends?
me and the sysop/Flickr
The votes are in, I’m going credit card-less for one month beginning April 1 despite the disadvantages of giving up credit. Here’s how I’m going to prepare.
- Hide my two credit cards in my jewelry box so they are out of sight, out of mind.
- Average my credit card bills from Jan, Feb, and March and set that as my spending limit for April.
- Head to my local bank branch to withdraw a fat roll of cash (my average credit spending from the past three months).
- Carry around $100 at a time for security.
- Begin spending!
My biggest concerns are safety, not having enough cash on me, and figuring out what to do about online purchases that require credit. I’ve decided to keep paying two bills - cell phone and student loan – as I have in the past, through a transfer from my checking account. These bills are consistent month to month and I don’t have the option to not pay them. My focus is on how using cash changes my day-to-day spending, not my fixed expenses. Remember how I got into this mess?
Okay! Ready, set…cash!
UPDATE: Joe asks:
Does that also mean no debit cards? I don’t use credit cards often, but I live by my debit card.
Yes, Joe, that means no debit cards. I’m going to be free of plastic!
Janet has a neat system that tricks her brain into thinking she only has cash:
My credit card is buried behind my drivers lic. I forget it is there but should I need it, I have it. I have learned to use cash because there is a huge difference in how I look at the cost of an item based on how I pay for it. This is been a modification in behavior, for sure.
good luck to you!
My post about whether it is okay to accept money from parents generated some thoughtful – and some angry – comments. So far 134 readers voted in the poll:
- 31 percent would accept money from parents only as a last resort
- 25 percent would do it if it made sense
- 19 percent regularly accept money/in-kind gifts from parents
- 16 percent would never take parental cash
- 7 percent have taken money in the past but don’t plan to again
Reader A resisted judging the situation:
Honestly, I think this is a very loaded topic and can’t easily be summarized in a quick and easy pick on an online poll. There are so many variables that factor into the decision or reality of accepting money from your parents — are you responsible with money yourself? are you parents actually not doing you a service by offering it to you? if eventually they are going to have a few million left when they die, might it be better for them to gift to you over time and now when it could be more helpful? are they giving equally to all the kids in the family? how does your spouse/partner feel about the gifts? I hope everyone realizes that it’s way more complicated a discussion than a quick click of “Are you kidding me? Absolutely not” or “Sure, if it made sense.”
Reader Bob took exception to my blog post, which also ran in the New Jersey Star-Ledger.
The fact that this title even made it into the business section sums up how bad entitlement issues to our children – of all ages – has become. Julia – How about writing an article titled “There’s no shame in moving into a more affordable neighborhood”, “There’s no shame in working a 2nd Job”, “There’ no shame in skipping a vacation”, or “There’s no shame in eating at home on Saturday nights”.
Blakely had a different take:
My inlaws paid for a cruise for my husband and I last year. This trip included my brother-in-law and girlfriend who couldn’t have gone in my inlaws had not paid. My husband had no problem accepting it.
I do believe most of us have accepted help/large gift from our parents at one time or another in our adult life. I think the problem comes when it becomes habitual instead of an occational thing.
Reader Myke says borrowing from parents is the way to go:
When my parents were alive I did deal with “HOME SAVINGS”. When I bought my car they loaned me money. I made up a payment schedule which included interest – usually the mid-point between what the bank wanted for the car loan and what my parents could get for their money leaving it in the bank. It was a win-win situation for both of us. I repaid every cent on time.
If you can’t live on what you make you may need to scale down your lifestyle and expectations. What will you do when your parents are dead and you are stuck paying for a funeral. It will be a very rude awakening for you when you have no inheritance to supplement your spending because you used it all up while your parents were still alive.
Remember, if your parents use up their savings cushion, they may have to move in with YOU!!!
Jenni P. hopes her parents won’t have to borrow from her:
The problem with our society (and why so many readers identify with BB’s website premise of saving money where we can) is that we tend to live beyond our means. My in-laws are in that category, trying to retire but not able to afford their lifestyle if they do. Their “golden” years will be a downsizing event of huge proportions. Their daughter is angry that very little money will be left for her to inherit. I’m not: as long as we don’t end up paying for THEM, we’ll all be happy.
This post is brought to you by the Gold Pawn Shop. Interested in an ad? Read my advertise page.
Remember that survey I blogged about awhile ago that determined where you fell on the spendthrift-tightwad spectrum? Well I just got my results. The survey conductors at the University of Michigan said:
We needed to wait until the study was complete before notifying participants, and the study ran longer than expected. I’m writing to let you know your score on the Spendthrift-Tightwad scale and to put it in some context.
Scale scores range from 4 to 26. We typically classify those with scores from 4 to 11 as tightwads; 12 to 18 as unconflicted consumers; and 19 to 26 as spendthrifts.
Your survey responses place you on the TIGHTWAD portion of the Spendthrift-Tightwad dimension.
Although the proportions differ from sample to sample…we generally find that 25% of respondents are categorized as tightwads, 60% as unconflicted consumers, and 15% as spendthrifts.
I belong to a minority of people who don’t spend money even when I should, according to these results. Bah humbug! I like saving money. But it is true. I save money even when I really shouldn’t. Case in point: my stash of 8 gift cards totaling $411.
On the other hand, I buy plenty of high-quality goods that cost a pretty penny. Last month I bought myself a fleece from the North Face Outlet that cost just over $100. I am a tightwad who lets loose on occasion.
Did anybody else take the survey? What were your results? It’s not too late to take the survey. If you didn’t take the survey, what group would you put yourself in?
Spendthrifts over spend.
Unconflicted consumers have few issues about spending money.
Tightwads hold onto their money more than they should.
