Updated on 01.27.16

Six Awkward Money Moments and How to Prevent Them

Skip the embarrassment.

If you’ve endured adulthood long enough, chances are you’ve experienced at least one awkward money moment. My life is no exception, as I’ve been left with burning cheeks of embarrassment and weird stress over money more than once.

Case in point: A few weeks ago, I accidentally forgot to pay my daughter’s preschool payment on time. This wouldn’t normally be a huge deal, but her teacher is a close friend and neighbor. The idea that she might think I was broke – or too irresponsible to pay my bills –  made my heart sink straight to me knees. As a rigid Type-A personality, I was absolutely horrified.

Preventing a similar situation from happening again can’t strip away the embarrassment I still feel from that day. For some reason, awkward money moments tend to linger — and sometimes, you may never get over it.

Six Awkward Money Moments You Can Prevent

They say an ounce of prevention is worth a pound of cure, and that’s absolutely true when it comes to awkward money moments and other cringe-worthy financial mistakes. Here are a few teachable moments from those who have lived through embarrassing financial mishaps themselves:

No. 1: When you offer to put something on credit for convenience… and your friend doesn’t offer to pay you back.

You’re at a restaurant with a friend and your server refuses to split the bill. What do you do? You offer to put it on your card with the understanding your friend will repay you right away, right? But, what if they forget?

Jim Wang from Wallet Hacks just went through something similar, and he felt it left him in a tricky position.

“I bought a couple friends a movie ticket because I was the one buying them from the website,” says Jim. “I felt a little awkward asking them for $15 back, but I did pay for their ticket.”

Sadly, this situation plays out all over the country in restaurants, bars, sports venues, and clubs. The only way to avoid this situation is to not do it, says Jim. If you’re worried your friend will bail – or if they have bailed in the past – opt out of paying for anything on their behalf. If you’re visiting a restaurant, for example, be up front about the fact that you need separate checks.

In Jim’s case, his friends just forgot. However, they paid him back promptly after they remembered, says Jim. “But it would be weird if I had to ask someone more than once.”

No. 2: When you loan a family member or friend money, and they promptly forget.

There’s a reason most financial advisors say you should never, ever loan money to family or friends. Most of the time, it’s an awful idea – but not because your family members are bad people, because they are bad with money.

Lance Cothern from Money Manifesto has experienced firsthand just how bad an idea this is. “Some people don’t see paying back loans from friends and family as a high priority,” says Lance. “Instead, they’ll take vacations or go out to fancy restaurants before paying you back.”

Sadly, the debt owed often leads to strained relationships and awkward family activities,” says Lance. “Who wants to endure Christmas dinner with an uncle that owes them $3,000?”

Fortunately, this financial mishap is easy to avoid. In short, don’t let friends and family members borrow money. Point them in the direction of their local bank for a loan instead, or help them apply for a credit card. If they can’t get approved for a line of credit with either of those methods, you shouldn’t be loaning them money anyway.

No. 3: When your credit card is denied in public.

If you’ve ever had your credit or debit card denied in public, you know just how embarrassing this can be. And it’s especially bad if a friend or colleague is witness to this sad predicament. Whether the denial is a mistake or the result of a lack of funds, it doesn’t get any worse.

Frank Lee of Rebates Zone had this happen while traveling for work in Dubai. His debit card, which was working fine just a few days prior, was declined at the point of sale. What’s worse, there was a line of impatient people forming behind him, which added even more pressure to the situation. To add injury to insult, his colleague paid the bill for him the hasten the process.

Frank later found out that his card was blocked due to suspicious purchases made overseas – purchases he made himself. To avoid this mess, you should always call the number on the back of your card before you leave the country, he says, and inform them of your plans to travel.

While some credit or debit card denials may be out of your hands, you’ll be in much better shape if you let your card issuer know about your trip before you leave home. And in the meantime, you can avoid the sinking feeling that comes with knowing your friends or co-workers think you’ve.

No. 4: When you get suckered into buying a timeshare

Chris Holdheide of Wallet Impact did the unthinkable while enjoying his honeymoon with his new bride. He bought a timeshare without thinking it through, and immediately regretted the decision.

“On our flight home, we were sitting next to an older lady who had two of them and had been trying sell them for the last few years,” explained Holdheide. “It was at that point we realized we made a big mistake and spent the next five years trying to sell ours.”

Whether it was the high pressure sales or the thrill of the purchase, Chris made a quick decision that cost him thousands of dollars. Fortunately, you can avoid the same predicament by avoiding timeshare presentations like the plague.

Don’t fall for the hype, and no matter how strong you think your resolve is, avoid the temptation of whatever they’re offering in exchange for 90 minutes of your time. If you get stuck with a timeshare you don’t want, your “free gift” will not be worth it.

No. 5: When you agree to be a bridesmaid… but the bride wants you to spend a gazillion dollars.

Being a bridesmaid can be a ton of fun and a huge honor, but only when the cost of participation is disclosed up front. Sadly, the complexity of many weddings and the accompanying events (bachelorette party in Vegas, anyone?) means higher costs for everyone involved.

If you’ll need to buy a dress, pay for hair and nails, travel for the bachelorette party, and buy shower or party gifts, for example, the final tally could be well over $1,000, says Brittney Knies, CPA.

To avoid shelling out more cash than you can truly afford, ask for the costs up front, says Brittney. “Tell them you’d love to be a bridesmaid, but you’re saving for X, Y, and Z and don’t have a lot of funds to spare.”

If your friend seems wishy-washy or has huge (expensive) plans in the works, it might be wise to bail before things get out of hand.

Your friend may not be happy with your decision either way, but at least you’ll avoid ruining a friendship. “As long as you are sincere and honest, your friend should understand, and you’ll be able to keep your budget in check,” says Knies.

No. 6: When a birthday party spirals out of control, and you’re stuck holding the bill.

Destination birthday parties are a thing these days, with parents shelling out fat cash for parties at theme parks, indoor bounce house parks, and even gymnastics centers. But, what happens when you’re asked to pay a huge chunk of the bill?

Bill Fish of ReputationManagement.com was stuck in this situation a year ago when his son was invited to a birthday party at Great Wolf Lodge – a water park near Cincinnati.

Fish didn’t ask the right questions, or any questions, and planned to drop his son off at the party for a day of water slides and fun. Sadly, it didn’t quite work out that way.

What Fish didn’t know was that entrance into Great Wolf Lodge required an overnight stay, which he would need to pay for. “I thought I was dropping off my kid with a gift for a few hours of peace and quiet,” says Fish. “What I actually received was a $400 hotel room, a jail sentence of 18 hours in a petri dish, and having to pay for all of our meals.”

Next time, he says, he will ask the right questions when another parent tries to rope his son into what could turn out to be a very expensive party. And that’s probably the best advice of all for anyone who wants to avoid this situation: Ask questions, and keep asking until you know what you’re getting into.

The Bottom Line

Financial mistakes happen no matter how kind or organized you are, and the worst mistakes are hard, if not impossible, to forget. That’s why it’s worth trying to prevent them from happening altogether. But whether your credit card is denied, your friend still owes you money, or you forget to pay a bill altogether, life goes on. The best way to recover is to chalk up the situation to a lesson learned, then carry on.

Have you had any awkward money moments? What was the most embarrassing financial situation you’ve ever experienced?

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