Can You Pay Me Back? How to Handle Money with Friends

This post is adapted from YNAB's twice-monthly newsletter, Loose Change. 

There’s a phrase that doesn’t quite roll off the tongue: “Can you pay me back?”

Even a text message can feel hard to craft when asking about money is involved.

Hey!
[Subtext: I am speaking in a friendly voice!] 
Great to see you last week!
[Friendship is more important than money.]
Just thought I’d check in about the hotel bill.
[I am so not worried about this that it appears like I almost forgot!] 
Thanks!
[Not actually sure why I’m saying this!]

For many people, asking someone to pay them back—even family members and close friends—can feel complicated. Why?

I asked the good folks here at YNAB how they handle it when someone owes them money and why it can feel so hard to navigate.

Tactic 1: Clarify your expectations

The first finding: if it feels awkward to ask for the money you believe you are owed, maybe it’s because you aren’t confident about what was mutually agreed upon. Kathleen says, ideally, “There's a conversation happening before the payment happens. Expectations are being set ahead of time.”

Speak up, check for understanding; it’ll help everyone relax.

Tactic 2: Let Venmo do the talking

Second approach: let Venmo do it. Kathleen again, “I send Venmo requests, and it's key to send the request as soon as it's warranted. If someone owes me for dinner, I send the request that evening. Waiting a day or two or longer makes it more awkward.”

Sending a request through Venmo, bank, or e-transfer in Canada, makes it clear what you are asking and easy for the other person to pay right then. This is a good option if you are exhausted by trying to strike the right tone of asking for what you want, but also pretending you totally don’t care.

Tactic 3: Eliminate expectations altogether

Third option: Totally don’t care. Several folks at YNAB said they never loan money or pay for dinner or drinks unless they are okay with not being paid back.

Hillary wrote, "If I do get paid back, wonderful! If not, it’s fine because when I loan money or pay for something for someone, that money is gone. I know my financial situation is very different than friends or family, and that this is a privileged position. But when I wasn’t in this position I just wouldn’t offer or would say, hey, I can’t cover both our parts."

A related version from Ashley G: “Sometimes I say, ‘Hey! Did you want to Venmo me for dinner last night, or do you just want to cover it next time we go out?’"

I was impressed by the thoughtful and straightforward responses from my coworkers. I also had the sense that talking about money is profoundly difficult if you think there’s a way you’re supposed to do it. 

I keep thinking of the monologue from Barbie, in which Gloria (America Ferrera) lists the many conflicts of being a woman: “You have to be thin, but not too thin. And you can never say you want to be thin...You have to have money, but not ask for money because that’s crass.” 

It’s a collision of too many taboos for us to think we can ask or talk about money in a ‘perfect’ way. So don’t try. Just say what works well for you (before the spending occurs, if possible). Say how you’d like to split it, or not split it. Resist the impulse to upset no one.

We live in a culture where talking about money is taboo, and yet almost everything in our lives interacts or depends on it. But you can do the entirely sane thing of admitting you care about money, whether you care about getting paid back or care about gifting something to your friend. Admit you care.    

YNAB helps you clarify your priorities and spend with confidence, so you can focus on what really matters—your relationships.

YNAB IRL: A life free of money stress

Megan wrote to us from Europe, where she and her family are living while her husband serves in the U.S. Foreign Service. 

I grew up in a family where, even though we had a very good household income, there was always a large amount of stress about money. Always.
I didn't learn the basics of money management, so as a teen and young adult I just accepted that being "bad at money" was a part of my identity and that I would never be free of that stress and anxiety.

YNAB turned that completely on its head. I now know that my identity is about my values and my priorities, and YNAB is the tool I use to align my spending with those things. 
‍
Money stress is no longer a part of my life and even though my kids are pretty young, they are learning the basics of personal finance and investing through their allowance. I can't explain how it feels to know I have broken the generational cycle of financial stress that I witnessed in my own family. I have come to love budgeting and money management so much that my husband suggested I look into a second career like bookkeeping, accounting, or analysis - and that's exactly what I am doing!