Talking about money can often be a taboo topic.
But knowing more about financial etiquette can
help us navigate the important subject.
I recently spoke with an expert to find out what we need to know.
Handling your finances is very much a personal matter.
But when it comes to dealing with your money and others,
financial etiquette is important to consider
whether you're giving a gift,
committing to being in a wedding or even loaning someone money,
how you handle it is half the battle.
So joining me now to walk us through
the proper financial etiquette is certified financial planner,
Bobby
Bobby, I'm just interested in how you would describe a financial etiquette.
Yeah, thank you for that and thank you for having me as always, you know,
financial etiquette is really about people
making other people feel more comfortable.
We have so much anxiety and lack of sort of comfort when
it comes to money in these social situations that you mentioned,
whether it's splitting the check at dinner or
going on a group travel trip or something,
maybe as you mentioned, splitting a gift, we don't know what the expectations are.
So have some sort of social norms out there,
it's going to take the stress levels down a little bit and maybe make
us feel more comfortable when it comes to money and the conversations around it.
Yeah.
Better feeling, I think always the way to go. So let's start with weddings.
It's a popular wedding season. These can be very costly, especially these days.
So when it comes to gift giving,
what do you think is the proper thing to do when getting the happy couple a present?
I think it's really important to focus on what they want.
Not necessarily what you think they expect.
It sounds too easy to be true,
but simply go to the registry or ask them go early because they'll
be the most choices and you could probably find something in your budget.
Many of them are set up in a way where you
can buy a certain number of items to reach the number.
That's right for you.
If you find things are very expensive, maybe consider reaching out to other people,
you know, going to the wedding and getting a group gift.
The other thing is a lot of the wedding sites now have where you can simply buy them a
gift card that they can then allocate to maybe
a bigger gift that people aren't going to necessarily buy
the really pricey extravagant thing that they really want.
But if everybody contributes a certain amount in effectively gift cards,
they can get what they want so focus on them and your budget.
I like that. Ok.
So if you do choose to give money, let's say cash or some sort of Venmo transfer,
how would you recommend going about the price, the cost on that particular gift?
Again, focus on your budget, not your perceived expectations.
It's sometimes ok to consult a trusted friend,
maybe somebody who's not necessarily a stakeholder in that because
as much as we talk about transparency with money,
it's ok to be a little bit private,
especially if it's something and we're talking about financial etiquette
that you may not always feel so comfortable about.
The other thing is factor in other
cost to attend.
So if this is a wedding, that's a destination wedding and you know,
you're already in for all this money, it's ok to give less money.
I hate to say it, but it really is about your budget,
what you could afford and the couple definitely does understand.
Ok, so let's say a loved one approaches you asking for money alone.
How would you handle that situation?
Oh, this is so delicate and I wish I could say it's rare,
but it actually is more common than people believe, especially when you know,
we talk about inflation and what it cost to borrow money.
Certainly borrowing from a relative can be a lot more affordable,
but you need to tread carefully.
It is always good to have something in writing with the expectations,
but don't lend money that you can't afford to give and to give.
And I say that very clearly,
you may not get it back and it will change your relationship.
I don't know of any circum
stand where unless someone literally just write someone
a check and says it's all yours.
No problem where it's not going to change because it can be uncomfortable.
You hear of situations where somebody lend someone
money and then the person that was lent the
money maybe buy something that the lender doesn't
approve of and it can get really sticky.
So really tread carefully. Right.
So when it comes to loaning a loved one money,
would you advise maybe a written agreement to
have some terms and boundaries in place?
It's not a bad idea, Kristen.
But understand, first of all, it may not be enforceable,
it may not be effective and just asking
for that written agreement in and of itself can
cause some stress to your relationship with that other
person that doesn't mean you shouldn't do it.
It's always good to lay out the expectations, but just be realistic about it.
Splitting bills very popular, whether it's out to dinner, a social event,
maybe even a vacation,
maybe even splitting the rent uh with your partner or even a roommate.
What's the proper etiquette there?
Yeah.
Well, when it comes to big ticket items like the rent, the more you can automate,
the better you can automate payments just to
each other in almost every payment system.
So that's always a good idea with a big ticket thing.
So you're not chasing down your roommate for the
rent when it comes to splitting the bill,
make sure that you understand who is paying to
begin with because sometimes when you invite someone out,
they might think that you're treating.
So
make sure that the communication happens ahead of time,
try to make sure you pick a place that's affordable to everyone.
You can even say
I love this restaurant. It's really trendy, but it's a splurge for me.
Are you OK with that?
Put it out there ahead of time so people can make the right
decision and you're giving them an opening to say it is a splurge.
I love it. But you know what?
We really just want to hang out,
let's take it down and not to go somewhere a little more affordable for both of us.
Yeah, that's good advice. Ok.
So what if you need to back out of a financial commitment?
How would you navigate that?
Yes, this is always going to be tough and you need to tread carefully.
So what I want you to do before you even have that conversation is think about
how it's going to be heard by the person on the other end of that conversation.
How are they going to receive it
and how could it potentially impact your relationship
with them and how it could also potentially impact what they needed the money for,
right?
What kind of position are you going to be
putting them in and be transparent and honest?
If it is the fact where you literally have no choice,
which is probably going to be the case,
be honest because sometimes people may perceive you as
having more financial resources than you really do.
That's often the case.
And so if they understand that it's coming that you were generous,
you really wanted to help them out.
But this is the reality and you don't have a choice and you're not in the position,
maybe that you were when you made that commitment,
that's going to take it a little bit easier
and hopefully the relationship won't be too damaged.
But it's tough. It is tough. Bobby
Rebel, great insight and tips on how to properly navigate financial etiquette.
We appreciate it.
All right.
Big thanks again to Bobby Revell there,
a certified financial planner with some great tips.