Money is one of the most divisive issues we deal with on a daily basis — even more than politics, parenting philosophies, or which sports teams you support.

No matter how carefully you try to keep money from damaging your relationships, you will encounter awkward situations that could have a negative effect on your family life and friendships.

Here are three common awkward money dilemmas, and ways to handle them gracefully:

1. Bowing out of an expensive activity

Sometimes fun plans can balloon out of control. For instance, you might say yes to an invitation for a day trip to the beach next weekend, when suddenly your friends decide to make a weekend of it at a posh hotel. You originally agreed to a simple there-and-back with a pre-packed lunch on Saturday and feel like the world’s foremost wet blanket when you ask how much the trip will cost.

At the center of this awkward situation are the mismatched expectations of all the friends. You expect to have fun on the cheap, while they might think the more (money), the merrier.

The only way to handle this is to speak up as soon as the plans change. If you know you can’t afford the weekend they are thinking of, simply tell your friends what you can do. There might be others in the group who feel like you do, or your friends might be able to somehow meet you halfway. Even if you have to bow out, doing so early in the planning stage will be better for your relationships than waiting until the last minute.

Otherwise, your friends may not understand your concerns and just mistakenly think that you are just being difficult by canceling last minute.

2. Your roommate doesn’t have his half of the rent

Living with a roommate can be a great way to afford more apartment than you could get on your own, but it also means you are vulnerable to your roommate’s money problems.

As soon as your roommate (or worse, your landlord) lets you know that his half of the rent is going to be delayed, you need to figure out exactly how you will handle the problem. If you can afford to pay his share, plan on doing that while also putting his IOU and repayment plan in writing. If you can’t afford to pay double, sit down with your landlord and your roommate to find out what options are available to keep the roof over your head.

A one-time missed rent payment can certainly be shrugged off (provided he pays you back), but if your roommate makes a habit of it, then it’s a good idea to find a different living situation.

3. Waiting on a loan repayment from a friend

There is a reason why many people simply refuse to lend money to friends or family, as it makes everything awkward. You might find yourself silently judging every penny that your friend spends while you wait for repayment, and every encounter with your friend can make you upset.

This is why it’s a good idea to set up the terms of the loan in writing when you first hand over the money. Then you will both know what the expectations are. Even if you didn’t create a written IOU at the time of the loan, you can approach your friend and ask to now put the repayment plan in writing. Otherwise, you might as well consider that loan a gift. That way, you can just be happy whenever you get some of it back.

The Bottom Line

Awkward money situations are a fact of life. The key to handling them is to make everyone’s expectations as clear as possible. What other awkward money situations have you encountered? Was there a happy ending?

Tagged as: Money Beliefs, Money Management, Spending