Forex Articles

You know that spending less than you earn and saving a percentage of your income for emergencies, major life goals and retirement are essential for financial independence. But sometimes these goals are at odds with pressure from the most important people in your life. Group meals at restaurants, nights out at the bar, shared gifts for coworkers and other situations can be immensely uncomfortable when you're tight on cash but you don't want to offend or disappoint your friends, family or coworkers.

What's the best way to handle these socially imposed financial obligations? When do you say no? When do you compromise? How do you deal with the fear of missing out? Here are some problems different spending scenarios present and how to manage them in a way that preserves your personal relationships and keeps your budget in the black.

The best way to avoid awkward bill-splitting situations is to get separate checks, which is usually easy to accommodate as long as you ask your server when you order. Take charge for the whole table, don't just ask for yourself, and you'll probably be doing at least one other person a favor, too. To be prepared for situations where the restaurant won't split the tab or you forget to ask, carry cash, including small bills, so you can put down only what you owe when the bill is passed around.

Make sure to factor an appropriate tip into your budget beforehand. If you can't afford the customary 15% to 20%, you can't afford to go to a sit-down restaurant. That being said, don't feel pressured to leave more than that if your friends are heavy tippers and you can't afford it or don't think the service was above average. (See Top 5 Ways Restaurants Make You Spend More and The Diner's Guide to Tipping.)

Sometimes going in together on a gift is a great way to save money. Other times it isn't – when, say, your coworker wants you to pitch in for a gift you weren't planning to give at all or when everyone in the group wants to spend much more than you do.

You have a couple of choices in this situation. You can graciously opt out by saying, Thank you for including me, but I already have plans to give my own gift. Or, if you'd like to contribute but the cost is too high, you can say you'd like to participate, but you only have $25 in your gift budget, and you'll understand if you can't be part of the group gift since everyone else is giving $50. Let the group gift organizer decide whether to include you at that point. (For further reading, see Gift-Giving Etiquette and Gifts for People You Aren't That Close To.)

There's an upcoming holiday, vacation or event that you're expected to attend, and you'd like to, but you're worried about money. What if you can't afford the travel expenses at all, or you can only afford the trip if you make significant compromises that inconvenience others, like flying into town on Christmas and out on New Year's Eve?

Honesty is the best approach here; your friends or family won't feel like you're neglecting them and might offer to help. They could pitch in for a more expensive plane ticket that lands you at an hour when it's more pleasant to pick you up at the airport or use frequent flier miles to get you to town. You could also suggest that everyone come to you, if you're willing to host, or suggest an alternate location that will be inexpensive for everyone. (For additional ideas, check out Shoulder Season: Your Ticket to the Perfect Vacation.)

A friend from college is getting married, but the wedding is halfway across the country from your home. That means a plane ticket, rental car and hotel room for you, costs that can quickly rise to $1,000 or more – money you're not comfortable spending in your current financial situation.

It's OK not to attend every wedding you're invited to, no matter how much you'd like to. Put together a sentimental gift or letter for your friend so she knows you value your relationship even though you can't RSVP yes. Or, if mutual friends were invited, look into sharing a car and hotel. Relying on Airbnb and Uber instead of the traditional options might cut your costs enough to make the trip work. (See How to Use Technology to Save Big on Travel.)

If it's one of your closest friends, your best choice in the long run is probably to go ahead and incur whatever costs are necessary to attend, while keeping them as reasonable as possible, even if it means going into debt short-term. You can pay off your credit card later, but you can't retrieve the opportunity to make those memories. (For related reading, see 5 Tips for Saving Money on Wedding Gifts.)

Discussing finances makes a lot of people uncomfortable. You might prefer to tell a white lie to get out of a tricky situation, but it might not be the best choice. The etiquette experts at the Emily Post Institute suggest we use three key principles – consideration, respect and honesty – to guide our interactions with others. When deciding how to handle a situation where relationships and money intersect, think about how the other people involved might be feeling about it and how they might feel about the responses you're contemplating.

Sometimes you aren't the only one with financial concerns and bringing them up will make someone else feel free to be honest, too. You don't need to overshare, but a simple, honest explanation can go a long way toward keeping the relationship solid: I'd really like to attend, but my expenses have been higher than I expected this year, and I just don't have the money. I'm working hard to improve things and I'd really love to see you next year. (Learn more about how to get by when money is tight in our Budgeting Basics tutorial.)