Have you ever had to ask for a friend to pay up? It’s the most awkward thing ever. While paying for a round of drinks upfront is easier, it can lead to strained conversations the next day. Here are a few of my favorite tips and tricks for managing friends and personal finances.
Excel Cataloging
Math is difficult. After a late night, adding up expenses can be a pain when you’re managing finances for more than two people at a time. When my friends and I agree to split the tab, I bust out Microsoft Excel and create a line item cost sheet by person. Example below:
By using Excel formulas, I can save myself a headache from keeping tabs on everyone. This gives me insight into how much everyone from the group owes.
Splitwise
One of my favorite apps is Splitwise. It’s budgeting software that helps manage back-and-forth expenses in a friend group. The app does the same calculations as the Excel spreadsheet above but you don’t have to input any formulas.
The app creates friend groups and splits off your expenses accordingly. What I like most about this app is that there are different payment options between friends. For example, maybe an item shouldn’t be split and the person owes you the full amount. You can input this into the app and BAM! It calculates everything for you.
Last month, I went on a ski trip to Big Bear with my fiancee, a friend, and a mutual friend that I had met the day of the trip. My friend had mentioned this app to me as a means of managing each of our expenses throughout the trip.
Without having to worry about who owed who, my fiancee and I were able to fully enjoy our trip without any extra hassle.
The best part is that the app accounted for everyone owing each other in the group as part of the calculation. Instead of having to pay one friend to pay another, the app split the difference and directed you to pay the friend who is owed.
Friendship and Finances
Outside of these ways to manage the cold hard cash, you have to consider the emotional impact that splitting money could have on your friendships. Maybe you have a friend who can’t pay or maybe you need to ask for more time with payday coming up.
There are different circumstances where money will impact your relationship and I think the first thing is to be upfront with your friend. There have been times when I say “can I pay you on Friday? That’s payday,” and people understand. Being truthful and taking responsibility is the best way to manage your finances.
Have a great week,
JT