Money 101: 10 Financial Etiquette Questions Answered!

Around the same time I started raking in the big bucks (courtesy of the Tooth Fairy), my father started enforcing the rule that the topic of money was off-limits in polite conversation. There was no, “Hey, how much was your incisor worth?” in my house. And the one time I asked my dad the amount of the bill at a restaurant, he handed it to me since he assumed I was offering to pay. I never asked again.

I think that this respect for each other’s hard-earned dollars – and your neighbor’s privacy – is a generally accepted part of American culture. Don’t ask how much someone makes, and never ask how they vote, right? So when someone oversteps this unspoken boundary, it throws me off – I never have a clue how to respond and usually say the worst thing possible.

Mary Mitchell, author of multiple books on etiquette and president of The Mitchell Organization, has made a career out of coaching people how to approach awkward situations with grace. When a friend says something about money that strikes you as inappropriate or even offensive, Mitchell says that being prepared to change the subject politely is the best defense. “Be ready to say something like ‘We are bombarded with news of the bad economy and finance lately! Let’s talk about something more upbeat.’”

While you can’t realistically get out of talking about money with a spouse or a parent who’s participating in your finances, there is nothing wrong with dodging the subject with anyone else. “Practice saying ‘It’s raining outside,’” Mitchell suggests. “This is the same tone of voice you should use when responding to someone who asks you an inappropriate financial question – no emotion, no judgment. If someone gets aggressive, you can try smiling and asking, ‘Why ever would you ask me that?’ or ‘If you will forgive me for not answering that question, I will forgive you for asking it.’”

Mitchell offers this additional advice for how to approach situations that are as common as they are uncomfortable.

1. Your friends make more money than you, and they treat you like a charity case.

Maybe your pals mean well, but whenever they invite you to an event they tack on comments, like “We understand if you can’t afford it right now,” that strike you as totally tacky. While knowing you’re the low-earner in your group of friends can make you feel like their token poor(er) friend, Mitchell cautions you to avoid being overly sensitive. “Nobody can make you feel like a charity case but you,” she says. “It’s fair to decline some invitations with a simple ‘That’s not in my budget, but I’ll look forward to hearing about it!”

Just because you say you’re watching your budget doesn’t mean that you’re admitting poverty. Anyone who’s responsible with their cash – no matter how many figures they rake in a year – has a budget, so there’s no shame in letting your friends know that you’re respecting yours. That said, make sure you don’t make them uncomfortable by how you decline their invitation. “Always thank them with a genuine thank you,” she says.

2. Someone asks how much you or your spouse earns.

When you’re having an open conversation, it’s easy for someone to slip in a question that’s too invasive. Mitchell recommends that you handle the overstep lightly, with a comment like “We make enough to be here enjoying the day with you!” If your deflection doesn’t give your interrogator the hint, she says you may have to end the conversation by saying you don’t discuss such personal matters.

3. A friend borrowed money from you. They haven’t paid it back or even mentioned it.

These situations can breed resentment faster than interest on a credit card balance. The best way to approach this is directly and without any accusation. Mitchell suggests approaching the person you loaned the money to – nobody else – and simply ask, “What is your timetable for repaying the loan? I need to know so I can account for the funds in my budget.” Then wait for them to present you with a specific repayment plan – and hold them to it.

4. You go out to eat with a group and order a salad and water. Everyone else orders wine by the bottle, and at the end someone suggests splitting the check evenly.

Unfortunately, you may have to consider this dinner an expensive lesson. Objecting to dividing the checks is nearly impossible without sounding causing a scene. Unless you can subtly pull the waiter to the side and ask to be excluded from the division, you may have to pay your part. Be ready the next time you go out with that group of friends, though – before you even walk into the restaurant, tell whoever invites you that you won’t be drinking and want to keep the checks separate.

5. Someone asks how much your purse cost.

Unless your girlfriend is bragging about the steal she got on the clearance racks, the cost of anyone else’s belongings is between them and whoever is on their joint checking account. If someone has the nerve to ask what you spent on anything, Mitchell says that best way to handle this is with a simple, “I don’t remember.” If this feels too awkward, it’s also fine to say, “It was a gift.” These white lies are perfectly acceptable, and hopefully your friend won’t ask you a similar question again.

6. A good friend is having a hard financial time. Can you offer to pay for her to participate in a fun event?

One of the best parts of having disposable income is being able to dispose of it on someone you care about. Mitchell says that doing something kind for a friend who you suspect is in a tight financial period is perfectly appropriate. Make it clear that you are offering her a gift because of how much you care. “Say something like ‘Please let me take care of this. I would really love to share this experience with you,’” Mitchell says. “Make sure you talk to her in private, however, and do not talk about the fact that you paid her way to anyone. Ever.”

7. You’re with a friend when her card gets declined.

If your friend’s card was declined, she’s probably both embarrassed and freaking out about what’s going on with her account. “Go right to the solution,” says Mitchell. “Offer to cover her, and just tell her you can settle up later. Then change the subject and don’t let her dwell on it.” Covering her lunch bill will save you both a lot of awkwardness, but if you’re clothes shopping, suggest that she ask the salesperson to set her stash to the side until she can call her bank. You want to help her save face, but that doesn’t mean you have to cover her fall wardrobe.

8. An acquaintance criticizes your spending habits.

Before you get fired up and say something you’ll regret, consider that they’re probably trying to talk to you out of concern. “Thank them for their interest in you and tell them you appreciate it,” Mitchell says. “Then change the subject and take a long look at yourself to see if the concerns are justified. If they are, you may need to think about changing some behaviors.” If the person criticizing you was irritated because they’ve had to lend you money or cover your tab, you need to make things right.

9. A friend or family member always assumes you’re going to pay when you go out.

Mitchell says you need to address this situation before you go out, but there’s no need to bring up the past. “When you are making plans, say something like, ‘This should only run about $20 each. You in?’” Then when you go, pay for your part and leave your friend to deal with her tab on her own.

10. Someone asks how much debt you have.

Talking about the national deficit, if you can do it calmly, is OK. Talking about your credit card balance? Not so much. Maybe your friend is looking for validation that her debt isn’t outrageous, or maybe she’s a nosy biznatch. Either way, Mitchell says the best approach is to look her in the eye and say “I’m not comfortable talking about that.” If she doesn’t let the subject go, direct her to a financial counselor – and consider closing off a relationship that she obviously expects to be more open than it should be.

Photo: iStockphoto

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