How Friends Can Ruin Your Finances

Have you ever had the kind of roommate that eats everything in the fridge even though he didn’t buy the groceries, or come up short on rent and ask you to cover for him?  Most guys are familiar with the slacker roommate or flakey friend who is always asking to “cover” for him.


We’ve all been there, money gets tight at the end of the month and there are so many reasons why friends ask to borrow money, but when they start ruining your finances can you tell them to stop mooching?


Here is a list of common activities among friends that are bad for your finances:


  • Its Monday night football at your local sports bar so you and the guys are getting together to cheer on your favorite team.  While you were prepared to by your own wings and beer you didn’t plan on some of your buddies asking to borrow money from you to pay for their meal.  What would have been about $15 for yourself is going to cost you over $40 for 2 of your other friends as well.
  • Rent is due and your roommate came up short on his half this month.  What would have been $250 is now $300 since he asked you to cover for him this month with promises of paying you back.
  • A new co-worker asked you out for drinks tonight after work, are you going to turn them down?  Now instead of a free night on the couch you’ll be footing the bar tab at close to $50.
  • Its summertime at the lake and your truck is the only one big enough to get everyone there together.  You think they’re going to pitch in for gas money?  Probably not, so you can count on putting at least $20 in the tank.


Assume everything listed above happened in 1 week; you just spent an extra $160 on your friends.  Meanwhile, you may have had to use your credit card to buy groceries or gas since you drained your bank account with 3 days to go until payday.  Higher balances on your credit cards mean more finance charges and potentially lower credit scores.

Think that extra $160 on your friends was worth jeopardizing your long-term financial stability?


If you put that extra $160 in a savings account, after only 1 year of letting your money sit there you would have made at least $4.  It may not seem like much but that’s free money to you my friend, after a 1 time only deposit.  Let’s see what other earning potential you’re missing out on; if you average at least $50 a month “covering” for your friends, you’re not just throwing away $600 a year but losing at least $656 because of what it could have earned sitting in a savings account.


Here is a list of alternate activities to do with your friends:


  • Host Monday night football at your place and make the guys BYOB.  Now you’re paying less than $10 for your own drinks and snacks.
  • Rent is due and your roommate is asking you to help pay for his half.  Have him call the landlord and work something out about making up the difference, with interest or not, when he comes up with the money.  It’s not your responsibility if you’re roommate is being frivolous, is it?  And you saved $50 by holding him accountable.
  • That new co-worker asked you out for drinks tonight but suggest an alternative plan.  Suggest lunch or happy hour, which is cheaper than dinner. New tab, less than $20.
  • If you’re headed to the lake and plan on being designated driver or just don’t mind everyone hoping in your truck instead of meeting up, ask everyone to pitch in a couple dollars to help pay for gas.  As long as they don’t have to drive they should be willing to accommodate your request.


Keep in mind that friends borrowing money may not just be draining your bank account; they are ruining your finances by potentially increasing credit card balances which means higher monthly finance charges and a lower credit score, and also by reducing the amount of money you could be saving each month and earning interest on for your future or emergency funds.

Call to action!

Leave a comment specifying how you would deal with a friend who is constantly trying to ruin your financial plan.



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