Experts say it’s best to be direct yet polite when asking a friend for your money back.Alona Horkova/iStockPhoto / Getty Images
This scenario may sound familiar: You covered a friend’s dinner, or paid for their concert ticket on your credit card. Maybe you even lent them cash during a vacation.
Then, crickets. You wait to be paid back, but the e-transfer doesn’t arrive.
If it’s a small amount, you may let it go. But if you want – or need – that money back, it can be awkward to chase someone for it, and even strain your friendship.
A survey conducted by PayPal last year found that on average, U.S. adults were owed US$926 for expenses such as dining, concerts or travel. One-third of these respondents said they experienced challenges getting their money back, whether it was waiting months to be paid or facing tension with the person who owed them cash. Millennials and Gen Z, in particular, were found to worry more about asking for their money than boomers.
Natasha Knox, founder of Vancouver-based Alaphia Financial Wellness, says that an outstanding balance between friends can lead to resentment in the relationship if not managed properly.
“It can lead to judgment,” Ms. Knox said. “Like, ‘How are you affording to do this and you still haven’t paid me back?’”
So how can you ask a friend for your money back while protecting the relationship? Experts say it’s best to be direct yet polite.
How to have the talk
There’s a tactful way to ask for money back, says personal finance expert Jessica Moorhouse. You don’t want to be confrontational, aggressive or even passive aggressive. Everyone has a different financial situation, so what is a menial amount to one person may not be to another.
Ms. Moorhouse says you might opt to text your friend shortly after you cover their bill, saying something like: “It was so nice seeing you. Just an FYI, this is the amount you owe me. If you could pay me by the end of the week that would be awesome.”
If your texts are ignored, Ms. Moorhouse suggests a phone call, FaceTime or an in-person conversation.
The psychological price we pay when we loan money to friends, family and yes, companies
For larger amounts of money, Ms. Knox advocates for open conversations that keep your friendship at the forefront. If the friend who owes you money does not have it readily available, it can lead to feelings of shame or anxiety on their part, Ms. Knox says. They may want to pay you back, but can’t at the moment.
By starting a conversation that stresses how important your friendship is, and how you don’t want money to come between it, you are creating a space that allows both parties to open up.
Use technology
Personal finance apps can help take the awkwardness out of asking for money, and make it easier to track IOUs, says Ms. Moorhouse.
Splitwise, an app that tracks shared expenses, is a useful way for friends – especially groups – to monitor their spending, and how much they owe each other. The app will even send e-mail notifications about outstanding balances or payments made.
Young Canadians falling behind payments as debt divide widens, report shows
Interac allows users to send e-transfer requests along with a message to the recipient, and lets the recipient directly deposit money into the sender’s account.
If you do send an Interac request, Ms. Knox suggests adding a casual note, such as: “Hey, sending this request now – didn’t want to lose track of it.”
Know before you lend
Whenever possible, make your money expectations clear: Do you need to be paid back by a certain date? Are you both comfortable with splitting all expenses 50/50?
Zoe Barton, an Arkansas-based talent recruiter, says she always has conversations with friends before buying concert tickets or planning trips, and checks that they’re fine with the plans and costs.
On a recent girls’ trip to New York City, Ms. Barton says her friend was stressed about keeping track of split costs, so Ms. Barton offered to pay for everything on her credit card and do the math later.
“When we were lying in bed in our hotel room at night, she got out her phone calculator and I opened up my credit card statement and I read her numbers,” Ms. Barton said. “Then, she would send me the money. It never felt like she owed me because we had an agreement.”
Assess the risks
Ms. Moorhouse says there is an inherent risk when lending money, especially with new friends or those with financial issues. You have to be prepared that you might not get your money back.
And because money is so personal, an unpaid debt can bring up myriad feelings, including being taken advantage of, or feeling like you’re not being taken seriously, Ms. Moorhouse said.
“It’s a loss of trust, effectively, if [a friend] doesn’t pay you back,” Ms. Moorhouse said. “So, it may change the relationship moving forward.”
Ultimately, it’s important to know your own comfort level when it comes to lending money. For Ms. Barton, her willingness to cover others’ costs depends on who it is.
“If a close friend never paid me back a couple hundred dollars, I would never worry about it,” Ms. Barton said. “But if it’s an arms-length friend? Probably $25 would be my threshold of ‘I’m going to start to feel a little bit annoyed that they didn’t pay me back.’”
