How to Manage Expenses With Family and Friends

From splitting the bill at dinner to sharing expenses with a roommate, managing money with friends and family can be awkward. How can you protect your finances and your relationships at the same time?

Here are a few tips on how to deal with common sticky scenarios:

Splitting the Bill at Dinner
You had a small salad and your friend, who ordered prime rib, suggests splitting the bill. That's not fair and you shouldn't have to pay for your friend's expensive choices. No need to beat around the bush: When the check arrives just say (politely) that you'd rather pay for what you ate. Offer to calculate the bill yourself, and explain that you're keeping a close eye on your budget this month.

In larger groups, if you don't plan to order a full meal or order pricey beverages, try dealing with the bill in advance by requesting your own separate check when you place your order. If a friend asks why, just say you may need to leave early and want to keep track of your total. Or, just be honest and say you're on a savings kick and find keeping your receipts helpful because it enables you to keep track of your weekly expenses. You may even inspire others at the table

Now, if you're feeling generous and want to pay for the entire group's dinner, understand that you may be setting expectations for future group gatherings. If you become the "I Got It" guy or gal, friends could get used to your open wallet. If a mooching friend asks you to spot him (again), just say you only brought enough cash for yourself. One exception is if you and a partner regularly dine with another couple and take turns paying the bill. If it's your turn to pick up the tab, make sure to come prepared!

Sharing Expense with Roomies
Living with roommates is a great way to save on housing. It's important, though, to keep lines of communication open and create a "system" for managing shared expense like groceries and cable. Otherwise, it could turn into a financial headache.

One way to handle bills is to have a communal bowl or jar in the house where roommates drop receipts for all shared expenses, as they're paid for, including groceries, household products, etc. At the end of the month, get together to reconcile and split the bills as a group, paying cash or writing a check to each roommate that covered for you during the month. It works best if everyone is accountable for at least one expense category. That way when you tally up what each person spent and split it evenly, there's a built-in incentive for everyone to pay on time.

If you prefer to manage bills electronically, is a free website that help roommates share the cost of rent and track bills and payments together. WePay is another online tool that helps groups manage collections with full transparency. The administrator of the account (you) collects money from the group for joint expenses (either electronically, cash or check) and updates the status on WePay. Members can then monitor account activity, when bills get paid and what has yet to clear. The site does charge 50 cents for each bank account payment and a 3.5% fee for credit card payments (or a 50-cent minimum).

Group Gifts

WePay works well for group gifting, as well, if, say, you are collecting money from other parents to buy a group gift for a teacher, or planning a vacation with friends and need to book airline tickets together. also lets you easily split and manage bills with friends. The service is free and sends an automatic email invitation to the shared bill — so you don't have to. Just remember: For any purchase you go in on together, though, whether it's a group gift, trip or sharing a summer home, have a discussion ahead of time about all the possible expenses and agree on a budget. Don't get roped into the "group thing", if it means you're going to end up paying more than what you can afford.

Reposted; financiallyfit.yc


Post a Comment