We’ve all heard of the “money toxic friend” – the one who’s always skipping out when it’s time to pay the restaurant bill, the one who still hasn’t returned $200 for that pair of skinny jeans you helped pay for when she was broke. To sum up: she’s bad for your finances.
“They usually have a ‘freeloading’ attitude or are selfish – getting that designer bag is more important than returning the money you lent them,” says Ho Shee Wai, a psychologist with The Counselling Place. “Some might even get pleasure out of outsmarting you and gaining something for nothing.” Jasmine Osada, 25, a local media analyst, has a friend who often avoids paying for her meals whenever they eat out together at restaurants. “She sometimes asks me to settle the bill first and mumbles that she’ll pay me back later.
But when I remind her of the money she owes me, she avoids or changes the subject,” she says. Jasmine has given up chasing her friend for these amounts, which have totalled nearly $100 over the last couple of years. She adds that her friend’s family suffers from financial problems, which may account for her inability to pay up. “But she somehow manages to find the money to buy package tours to places like Japan,” she says, though she’s never confronted her friend about this awkward fact.
“I’m quite afraid to meet her these days as I don’t know when she’ll ever get around to ‘paying me back another day’,” Jasmine says. Experts say you shouldn’t suffer. In fact, while chasing a friend for money can be socially awkward, it’s never bad manners to ask for what’s rightfully yours, says etiquette coach Agnes Koh of Etiquette & Image International.
“Don’t condone such behaviour. Small amounts add up and your friend could make this a habit,” she advises. Penelope*, 25, a TV producer, has found a clever way to get around her money toxic pals. She hangs out with a group of 10 girls whom she’s known for almost 10 years. But while her friends are well-to-do – some live in landed properties with their families – it hasn’t stopped them from scrounging off her.
“We usually eat at mid-priced restaurants and split the bill. Several times, I’ve had to pay extra because someone paid too little or ‘forgot’ to add the service charge to their share,” she says, adding that it’s hard to tell who’s the culprit because the group is so large. Her solution? “I always choose restaurants that don’t have service charge so my pals have no excuse for ‘forgetting’ to pay extra. They also can’t do any ‘clever’ accounting like rounding
down their share of the tax.”
BE ON GUARD
Sometimes it’s better to be safe than sorry. If you are making a sizeable loan to your friend – say, a few thousand dollars – always get her assurance that she’ll pay you back in writing. Keep any e-mails and text messages in case she later claims your loan was a “gift”. You could also ask a lawyer to draw up a loan agreement that spells out the terms of the loan, when your friend should repay you and that she should shoulder legal costs if you take action against her non-payment.
Do note that drawing up even the simplest loan agreement can cost a few hundred. A more complicated one can cost $1,000 to $2,000, says Eben Ong of law firm Loh Eben Ong & Partners. Plus, there’s also the delicate matter of getting your friend to sign such a document. So, always ask yourself if you’ll be willing to forfeit the money. If the answer is no, don’t lend it.
“Set boundaries – for instance, make it clear that you won’t give loans nor will you pay for your friend, especially if she has a habit of not paying you back,” says Shee Wai.
Not all stories of money toxic pals end in broken trust and soured friendships. Jenna*, 25, a teacher, misplaced her debit card at work a year ago. Her colleague and friend Claire* picked it up and spent around $1,800 in two days on groceries and meals. After realising her card was missing, Jenna informed her bank. The next day, Claire turned up at her house to return her $2,000 in cash. “She confessed and broke down, saying she was facing personal problems and had been diagnosed with depression,” says Jenna. Satisfied that Claire had admitted to the theft, Jenna forgave her.
“In serious cases involving theft, you have to find out what’s going on with your friend – does she have a personality disorder or addiction problem? Be on guard until you have evidence that she has really repented and changed, such as her agreeing to get professional help. Just saying sorry or being emotional isn’t good enough,” says Shee Wai.
Even though her mother advised her against trusting Claire again, Jenna believed that Claire was telling the truth because she had confessed and returned the cash promptly, even adding $200 to the amount she’d stolen. “We became closer after this incident. Instead of keeping her problems to herself, she started texting me whenever she felt low. She started to trust me more,” says Jenna. Thanks to Jenna’s friendship, Claire became more positive about life. She has named Jenna godmother to her unborn son, and even gave Jenna her blessings to do this interview. Jenna adds that Claire is now a close friend and that she can confide in her about anything.
“This is a friendship that I would not have been able to find any other way,” Jenna says. “The incident, while traumatising, has become our shared secret. She knows that she can trust me with her problems and vice versa.” When asked if she would lend Claire money in the future, Jenna says unhesitatingly: “Yes!
This story first appeared in the March 2013 edition of Her World magazine.