How to avoid awkward money lending situations with friends

Splitting the bill at restaurants or when buying gifts remains a source of awkwardness for many Australians, and intensifies at this time of the year.

‘TIS the season for catching up with friends, but many Australians are avoiding picking up the bill or paying for group items because it’s too hard to get their money back.

New research by Westpac has found that two-thirds of Australians don’t bother chasing friends or family for money owed to them because they find it awkward to bring up and they don’t want to seem stingy.

Just 27 per cent of them are happy chasing up money, it found. And 40 per cent don’t even let themselves get caught out because they avoid group payment situations altogether.

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Westpac director of online and mobile products Jeremy Marron said at this time of the year it could be difficult to keep track of who was owed what.

“Managing group bills or activities such as paying for accommodation, picking up the bill at a restaurant or even chipping in for a joint present can quickly become a costly exercise and often falls to one person in the group to manage,” he said.

Aussies love dining out with friends, but things get awkward when it’s time to pay.

“Money can be a really sensitive topic and it seems many people just don’t know how to raise the subject.”

Westpac’s research found many people do not chase money from friends because they consider it “a small amount” while some simply forget that they are owed the cash.

It also found the biggest roadblocks to transferring money include not having the account details of the person owed, a lack of bank login details and a lengthy process to get money back.

Westpac now allows people to make payments on their mobile devices using voice technology.

People can avoid awkward money situations by having strict personal rules and planning their actions in advance.

Many Australians avoid getting into situations where restaurant bills must be split.

Financial specialists say it’s unwise to lend any money that you wouldn’t offer as a gift.

If you decide you won’t lend money to friends or family, be clear and firm, and don’t make exceptions to the rule.

The rise in tap and go technology and mobile banking has made it easier to transfer money, and restaurants may be happy to split bills on credit cards because people often don’t carry cash.

However, if going out with friends, it might be prudent to bring some cash to avoid issues when it’s time to pay.

Goldsborough Financial Services director and senior financial planner Brenton Miegel said many people did their banking on their phone, and this could be a quick and easy way to transfer money.

“Before going out, inquire as to whether a restaurant will split the bill — sometimes they do and sometimes they don’t,” he said.

Mr Miegel said bill-splitting situations could be awkward in other ways, when one person decided to pay and would not accept your money. “Sometimes you should just say ‘thanks very much and I will pick up the next one’,” he said.

Lending small amounts of money or paying for meals usually comes with an expectation that the favour is repaid later, but when borrowers aren’t willing to repay it can permanently damage relationships.

“There can be talking behind the scenes,” Mr Miegel said.

@keanemoney