Mixing money with friends can often lead to disaster. Like when you split the bill and one of your friends shortchanges you. Or when you come to the frustrating realisation that Mike from accounting is never going to cough up the $20 he owes you for Sharon’s farewell gift.
Luckily Julie Tylman and Ali Linz, co-founders of GroupTogether, have shared their expert tips to help you navigate handling money with friends, so you’ll save money and never get shortchanged again:
1. Do your homework.
Get a better understanding of who’s in your group – exactly how many people are you collecting money from and when? This will help you down the line when you need to collect the funds.
2. Work out the cost in advance.
If it’s a fixed cost, make sure everyone knows in advance the amount and is able to participate. If the cost is up to the group, then find out the amount people are comfortable spending and plan your activities/gift around that.
3. Know exactly what you're collecting for.
Is it a deposit for a restaurant/venue, money for alcohol or a group gift? Make sure you take into account all the costs including incidentals (shipping, “refundable” bonds, etc.). This will help you avoid arguments down the line.
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4. Pad the calendar.
Find out when you actually need the money but tell your group that you need the money days (if not weeks) before you do. It’s your insurance against the stragglers in the group.
5. Agree on “Refund Policy”.
Find out the last possible date to make changes on numbers attending without incurring a fee, or inquire if you can return items without a fee (don’t forget shipping costs). Then, as a group agree on your refund policy in case someone is sick on the date or someone pulls out of the team – will they get their money back.
6. Never accept IOUs from family, friends or acquaintances.
Accepting IOUs is a sure fire way to end up short changed. If someone asks you to chip in for them, you can tell them that unfortunately you’re not in a position to do that but are happy to wait a few more days for them to pay.
7. Put your money back in your pocket.
Only pay the money once you’ve collected it. Do not put it on your card and hope to recoup it later. If a deposit is required, then collect for the deposit first and the rest later.
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8. Technology is your friend.
Use apps or websites (like GroupTogether.com) that take the hassle out of collecting money from friends.
Do you have any tips for managing money with your friends?