What to do when friends and family see your success as a way for them to cash in
Idrissa wants to learn how to say no. But he needs practice. So, he tries a role-playing exercise:
Hey, can I borrow $20?
Idrissa: Why do you need $20?
Doesn’t matter, does it?
Idrissa: Well, right now I don’t have $20. I just paid some bills. And I’m still paying off my loans from school.
I thought you were rolling in cash from the new job.
Idrissa: No, not at all. I don’t carry cash with me. If I do, it’s probably when I’m going to lunch.
Well…can you buy me lunch?
Idrissa: I’m not even having lunch today. I’m really broke.
And…scene. Notes for Idrissa: Determined and convincing. Well done.
Let’s back up.
Idrissa*, who is in his mid-twenties, works at an investment bank in New York City. He scored the sought-after job after a six-month internship. Now, he’s earning $20,000 more than he ever made previously as a sales rep at Verizon and T.J. Maxx, where he made slightly more than the minimum wage. The bump in income has also raised him economically to a level far above many of the people he grew up with in a town just outside of Rochester, N.Y.
“There’s a huge difference jumping from nothing to something,” says Idrissa, who emigrated from Gambia with his family in 2001. “It is a weird feeling.”
But in raising his income, Idrissa walked into a classic predicament. He says his less upwardly mobile peers began to see him as an ATM, and the constant asks for cash have been testing both his friendships and his resolve to save money. The former New York Giants star Justin Tuck, who went from small-town Alabama to the NFL to Goldman Sachs, once described the phenomenon as “You made it, so we made it.”
These requests for money have strained Idrissa’s relationships. “They’ll say, ‘Can I borrow $20?’ But it’s not really a ‘borrow,’” he says. “They’ll say, ‘Once I get paid, I’ll get it back to you.’ But they usually don’t. They make up excuses: They just got laid off, they have bills coming up.”
In fact, when Idrissa is looking to socialize these days, he gravitates more and more toward his new coworkers. “It’s easier to hang out with them because there aren’t as many strings attached,” he says.
Avoiding those strings is key to Idrissa’s long-term financial plans, which include paying off several thousand dollars in student loans. To keep his overhead low, he splits rent with his roommate. And he’s begun to make saving a priority: He just enrolled in the 401(k) plan at his job and is trying to accumulate a six-month savings cushion before he moves into his own place.
To stay on course to meet those goals, however, Idrissa needs to keep saying no. Joan DiFuria, co-founder of the Money, Meaning & Choices Institute in San Francisco, offered some strategies that people in Idrissa’s situation can use to set boundaries with friends and family who ask for money, while still maintaining those valuable relationships.
Think it through. Vulnerability to open-handed friends is partly psychological. “Oftentimes, when you move up to a different social class, there’s guilt, there’s confusion, there’s a desire to help people you care about,” DiFuria says. “But it can get in the way of making some rational financial decisions.” By sitting with a trusted family member or friend—or a professional financial planner—and taking stock of his financial situation, Idrissa can better make peace with himself and his new circumstances and determine his goals. That may include making a budget. “How he wants to spend, save, and be generous is something he needs to take time to think about,” DiFuria says.
Practice some “buffer statements.” “It’s really hard to say, ‘I have something, but I can’t give it to you,’” Idrissa says. But as long as he’s sticking to his financial goals, it’s his prerogative to set that boundary. “People are taking advantage of him,” DiFuria says. “Instead of changing his life to defend against their requests, it’s better that he comes up with some responses that he’s comfortable with.” Idrissa has plenty of options to justify saying no, such as “I’m building a financial cushion so I can afford a place of my own” or “I’m paying off my student loans.” But the bottom line is, he needs to be firm. “No extended family member or friend is entitled to his money, and he needs to be able to come to terms with that,” DiFuria says.
Set a limit. As he gets closer to reaching his goals, Idrissa says, “maybe in the future, it will be the opposite”—in other words, maybe he’ll grow comfortable with lending money to trustworthy friends who will honor a Venmo request for payback. DiFuria suggests doing it responsibly by building it into his monthly budget. “He can do it with conditions,” says DiFuria, who suggests setting aside $25, $50, or $100 a month—with a caveat to the borrowers: “If you don’t pay it back, don’t ever bother asking for a loan again.”
*Last name withheld to protect privacy.