money etiquette rules

10 Money Etiquette Rules

Unspoken rules about money can make family and friends enemies. Here are 10 money etiquette rules to keep everyone friendly. 

money etiquette rules

If A Friend or Family Member Does Work for You, Be Sure to Pay Them Fairly 

Mixing family and money is rarely a good idea, but from time to time it can be good for both parties. Family will be reluctant to ask for what they feel the work was worth, and the paying party needs to be sure that the family member doing the work is compensated appropriately. 

However, the more that the family member knows about the financial position of the family member paying for the work can cloud good judgement. For example, if the family member paying for the work is wealthy, the working family member may feel as though a premium is due, though it’s not.

Similarly, if the family member paying for the work struggles with personal finance, the working family member may feel obligated to give a discount for the services performed. That too is a mistake because the worker will begin to feel taken advantage of or that they are providing a favor, when in fact, they are not. 

The easiest way to ensure a family member is being paid fairly is to conduct some basic market research, determine what the fair price is, discuss how the rate was arrived, agree to terms as one would with any other employee, and then move forward or move on. 

Don’t Ask About A Person’s Salary

There could be a myriad of reasons to want to discuss a salary with someone. Perhaps the inquiring party is considering that company or career path and wants to know what to expect or what to ask for in an interview. It could be general curiosity from friendly parties or it could be to serve a more sinister purpose, such as using it against them in some way. 

Regardless of the reasoning, most people feel uncomfortable with disclosing what they make even to a good friend or family member. If the person is perceived to make too much money, they could be thought of differently by other person. If they don’t make enough, they may be pitied or looked down upon. 

The easiest was to avoid offending a person regarding their salary is to not discuss it unless they bring it up. 

Always Split The Bill Fairly

When going out to dinner or to joint events always split the bill as evenly as possible. The person making the most money is under no obligation to pay more than their fair share. The person making the least amount of money isn’t entitled to pay less. 

If everyone agreed to go out and split the costs, it doesn’t matter what any individual earns. For those paying with a credit card, you’re in luck – it’s easy to split bills evenly in most modern point of sale systems without doing any math at all. Just be certain to coordinate any gratuity as well. 

Don’t Feel Obligated to Lend Money to People

Lending money to friends and family is the easiest way to ruin a good relationship. If the person has difficulty paying a lender back, they may duck their calls or avoid spending time with them so they don’t have to discuss the issue. 

It may be hard to enforce this rule when a friend earns far less and needs just a little help, but even small amounts of lent money can create division in the borrower even though they are asking for help. Avoid awkward situations and simply state, “I would never want money to come between us and as a rule, I just don’t lend money.” They should respect this, and if they don’t they might not have been worthwhile friends in the first place. 

Consider Others Financial Situation When Making Plans

One of the key money etiquette tips is to consider someone else’s position when including them in plans. This one hits home. 

My wife and I took a sabbatical year living in Thailand and lived off our savings. We visited a friend of my wife’s in Australia on our way back to America, and Sydney had costs on par with New York City, London, and Moscow at the time – some o the most expensive in the world. 

As we were living solely off of our ever-depleting funds in a far cheaper country – we had to be very careful of how much we spent when in Sydney. Yet our host, who wasn’t thinking of how our situation might be, took us to places well out of our price range. After a few days of $8 coffees and $22 cheeseburgers (yes, really) I finally felt so uncomfortable that I booked an early departure for the two of us and did not order a meal out at yet another expensive dinner. 

I felt personally attacked when in truth, the person simply hadn’t considered our financial position when making plans and he was trying to be a good host. To this effect he offered to pay but the damage had been done. 

Think about others when making plans so that no one feels uncomfortable. 

Don’t Complain About Money to Someone Who Earns Less Than You 

It costs a lot of money to change the oil on a Range Rover, but someone driving a ten-year old car with rust on the fenders doesn’t want to hear about it. To the executive who took a 10% pay cut when their division suffered may have lost more income than that person made for the entire year. Whining about a loss of income that’s enough for another person to live on, is distasteful. 

As a general rule, only complain about money to someone who has the same financial position or proximity. If someone complains to you about money  but they are at a significantly lower pay scale, sympathize with them and be a friend, but don’t complain about your own issues. 

Always Pay Your Debts (Especially to Family or Friends) On Time 

Family and friends are often the last to be repaid because they tend to be the most polite and lenient. They are being kind in the moment to save the relationship, but secretly allowing resentment to fester. 

Don’t do that to people you care about. Pay them back first, then any strangers to whom you owe money. 

Don’t Give Unsolicited Money Advice to Others 

It’s possible you know best, and it’s possible that other people’s money concerns are none of your business. Avoid telling people how to spend their money. They may know what they need to do and your “help” really feels like a condemnation, especially if they opened up to you about it. 

They may be vulnerable and sharing something deeply personal, don’t violate that by offering help when it’s not specifically requested. 

Just Because Someone Has Money, Doesn’t Mean They Want to Spend it 

It’s hard to save money, and it’s unfair to assign how much money someone has to how much they should spend. Someone else’s financial situation does not compel them to spend or behave in a way that you deem responsible or necessary. How other people spend their money is their business, regardless of how much or how little they have. 

Don’t Ask People How Much They Spent on Something

People have different priorities in life, and asking how much something cost may make that person feel judged. Don’t do it. There’s not a lot of good that can come out of knowing how much a person paid for something, but there is a lot of bad that can come from it. 

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