Lisa Bahar, MA, LMFT, LPCC | Article

Financial Frenemies: the Friends Who Make You Overspend By Colleen Oakley

If you have a hard time saying no, try these tips to keep your money where it belongs. See Lisa Bahar's tips and contributions to Colleen Oakley's article for Forbes.com

Lauralynn Schueckler, 31, works for a credit counselling agency, so she knows a lot about budgets and how to stick to one. Until her friend Tara* comes around.

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“She always backs me into a corner and talks me into doing things with her that I really can’t afford — like dinner every week or expensive art classes or not-so-frugal vacations,” says Schueckler. “She’s single, so she always uses the ‘I’m lonely, let’s do something!’ phrase on me. No matter how I try to say no, I always end up feeling bad and give in.”

Tara is a financial frenemy — someone who sabotages your financial budget, causing you to spend more money than you should. And most of us have fallen victim to them at one point in our lives. Yet, as evil as they sound, most financial frenemies aren’t even aware of what they’re doing.

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“People asking you to join in activities that you can’t afford are typically just trying to have a good time and aren’t maliciously intending to knock you off your financial track,” says Dr. Stacia Pierce, a life coach and author of Success, Attraction, Quotes & Notes.

But when they continue to push and bully, even after you’ve said no the first time, there’s something deeper at play in your friendship: control. “Financial frenemies are generally subconsciously seeking to have some type of control in the relationship, often to mask their own insecurities or vulnerabilities,” says Lisa Bahar, LMFT, a therapist in Dana Point, Calif. And they will go to extreme lengths to try to get their own way, she says, often by instilling fear or putting pressure on the person they’re trying to control.

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Still, it only becomes a problem when you don’t — or can’t — speak up for yourself. “I know that I need to be assertive and just say no,” says Schueckler, “but I’m a total people pleaser. I go above and beyond for my friends, and that usually leads me to having no money at the end of the month.”

It’s a more common problem than you would think, says Bahar. “Saying no sounds easy, but for people who can’t, there’s an underlying fear of rejection or a need to be liked and accepted.”

If you, like Schueckler, have a hard time saying no to the financial frenemy in your life, follow these tips to keep more of your money where it belongs — in your bank account.

1. Create a budget.
Have a written plan, so that you know how much extra money you can spend each month on fun activities with your friends, and still be able to meet your savings or financial goals, says Dr. Pierce. That way, when somebody asks you to do something, you can refer to your budget and see if you can actually afford it.

2. Don’t just say no.
If a friend is pressuring you to go to Bali, when all you can afford is a weekend in Myrtle Beach, turn it down, but explain why you’re doing so. “Let them know that you’re on a financial plan and you’re trying to save money for a house or to start a business,” says Pierce. “Or, if you’re not comfortable sharing specifics, just say you have a savings plan and this activity doesn’t fit into it.”

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3. Suggest alternatives.
Can’t afford the $100 dinner at the hot new celebrity-chef restaurant in town? “Tell your friend you’d love to spend time with them, but that perhaps you could cook together at your place for half the price,” says Pierce.

4. Have a frank conversation.
“If you really value the friendship but constantly feel pressured to spend money, be honest with your friend,” says Pierce. Say something like: “I feel like you’re not understanding my financial goals right now. I want to spend time with you, but I can’t go out every weekend.”

5. Take a step back from the friendship.
If talking doesn’t change your frenemy’s behavior, it may be time to reexamine the relationship. “You don’t have to break up with your friend,” says Pierce. “But you can ward them off for a few weeks or months. Make your own plans and tell them you’re busy when they ask to hang out, until you can gain control of your sanity and your finances.”

*Name has been changed.