Each Friday, The Simple Dollar reviews a personal finance book of interest.
I’ve always found social issues revolving around money to be infinitely fascinating. Why don’t people talk openly about money? Why do people loan money to friends and family, knowing quite well that if that loan blows up, their friendship is done? Why do some people consider it socially fine to be cheap, while others throw such heavy disdain upon it?
Isn’t It Their Turn to Pick Up the Check? focuses in like a laser beam on these social money issues. The subtitle really sums it up: Dealing with All of the Trickiest Money Problems Between Family and Friends – from Serial Borrowers to Serious Cheapskates.
The book has a light tone and a lot of advice on handle these uncomfortable situations, but does it offer enough meat to really make it a compelling read?
A Deeper Look at Isn’t It Their Turn to Pick Up the Check?
I’ll confess up front – I enjoyed this book quite a bit. It was a very fun read, loaded with anecdotes and situations that I can easily visualize in my own personal and social life. Most of the book is filled with a series of questions and answers that focus in on specific situations – I’ll pick out one or two from each chapter that piqued my interest.
1. I’ll Take the Flu
Whenever family and friends intersect with money issues, it’s uncomfortable. According to Isn’t It Their Turn to Pick Up the Check?, when asked whether they’d rather have the flu or have a relative ask them for a large loan, more than two thirds prefer the flu – and I don’t blame them. A loan between family members is uncomfortable and often ends in complete disaster.
2. Take My Relatives, Please!
Here, Fleming and Schwarz mostly focus in on how the spending habits of relatives often intrude on our own lifestyle choices. For example, one issue focused on in the chapter is that of a parent who is spending lavishly in her final years, blowing what would be a sizable inheritance that the children had been planning for financially. Their response? It’s not their money, it’s her money to do with what she chooses (unless it makes her financially dependent on them). What about a cheapskate brother? It’s only cheapskate behavior if it’s uneven – if he gives “cheap” gifts, but doesn’t complain when others give him nice gifts, then it’s not cool, but if he gives “cheap” gifts but asks to only receive inexpensive gifts or none at all, then you’re just pushing your own values on him. Interesting advice.
3. Borrowers and Lenders Behaving Badly
What about lending within families? It’s a pretty obvious no-no, but people still tend to do it anyway. Through the questions and answers in this chapter, a pretty clear policy emerges: don’t lend money unless you feel genuinely obligated to (for example, if that person lent you money in the past), but when you do, keep it private and don’t expect repayment, but if you are repaid, accept it graciously. This avoids most of the pitfalls that you might fall into when lending money to family and friends.
4. To Lend or Not to Lend
So, are there ever situations when it’s okay to lend money to family and friends? There are, but they’re rare (at least in my experience). The authors advise that you only lend money to people if you believe they actually need it, believe they’re reliable, are close to them, and if you’re confident they’ll make a serious effort to pay you back. And you don’t have to be consistent, either – because you lend money to one niece doesn’t mean you have to lend money to another, though you should be able to clearly explain why one is fine and the other isn’t. I still think lending money within families is a pretty dodgy idea.
5. That’s Not How I Remember It
Verbal agreements are bad when lending money within the family. That’s the story of this chapter – if you lend money without getting it written down on paper, then it might as well be a gift. Fleming and Schwarz advise writing all of the details down on paper: the total amount, the interest, when it needs to start being repaid, what the repayment plan looks like – then having all parties sign enough copies of the agreement so that everyone can keep a copy. While that’s probably overkill for small loans, it’s a great idea if you’re lending significant cash to a family member.
6. Rich Brother, Poor Brother
Whenever there’s financial inequality in families, it eventually causes some problems. Social circles and customs begin to change, people become jealous, and expectations begin to be altered. The advice here mostly revolves around taking responsibility for your own situation and not worrying about the situation of others. Thus, for example, a rich brother shouldn’t be expected to cover the expenses of a brother who chose a low-paying career (though it’s just fine if the brother chooses to – it just shouldn’t be an expectation). Just keep your eye on your own ball and put it in the best position you can, and assume that your family is doing the same.
7. Rich Friend, Poor Friend
That advice works well for families, but what about for friendships? Fleming and Schwartz mostly believe that if a money difference is starting to become a problem in the friendship, talk about it. That’s why you’re friends, right? However, there’s a hidden problem at work here: it’s not just a resource difference, but a status difference. Almost every social situation is tied into social status, and when income becomes disparate, often status does as well. Don’t be afraid to honestly talk things over, and also don’t be afraid if friendships slowly drift apart over time – if people begin to spend their time in different worlds, it’s bound to happen.
8. When Gifts Come with Strings
Giving a gift with strings attached is pretty cheesy, as you’re just begging for an extra dollop of resentment on top of that gift. On the other hand, if you choose to accept such a gift with strings attached, don’t fight to break the strings – that makes the person that gave you the gift resent you even more. In other words, gifts with strings attached, particularly ones that make the recipient uncomfortable, aren’t cool, and there’s no such thing as an “implied” string, either. If you want to give your grandson $100 for his college education, start a 529. Don’t just put $100 in a card.
9. Promises, Promises
What about unfulfilled promises? The failure of expectations can be devastating for relationships of all kinds, when something believed to be promised doesn’t appear. Are there situations where this is appropriate? Fleming and Schwarz argue that there are many situations with changed circumstances where it’s appropriate to break a promise. One such example revolves around a person who promised to provide for the care of a younger sibling when their parents passed away, but now that sibling is a reckless adult, bringing negative consequences into the household. In events like these, Schwarz and Fleming encourage the breaking of a promise, because the situation has transformed from when the promise was made. Their key advice is to not make a promise that you know you might be unable to keep, like promising someone that they can live with you as long as they’d like.
10. What Are We Going to Do about Our Wills?
Many people go through a lot of consternation and guilt when deciding who they should leave money and assets to in their will (or trust). I wholly agree with Fleming and Schwarz: it’s your money, do with it what you want, but you should have the moral fiber to be willing to tell everyone involved the decision you made and why to their face – and listen to what they think of it, too. If you’re doing things in a secret fashion or doing things unevenly without telling everyone why, you’re basically writing a guarantee that the people you’re leaving things to won’t get along after you pass on. I strongly agree with this. I’ve witnessed the complete destruction of familial relations between several siblings because their mother, when she passed, left an item that they all treasured solely to one daughter.
11. Beneficiaries and Their Great Expectations
What about the reverse situation, when you’re a beneficiary and you feel there are unethical things going on with the estate? Again, the key is communication – talk about it, don’t let it fester. Remember that the aging person has a right to spend and bequeath their money as they see fit, so you generally don’t have a strong position to stand on if you feel you’re being “ripped off” by that person’s money decisions. The best solution is usually just to ask questions so that you understand what exactly is going on.
12. After the Funeral, Who Gets What?
Most wills usually have an unhappy surprise or two laying in wait for the people expecting to get inheritances, and how these inheritances are handled often can make a big difference in whether hard feelings exist in a family or not. If someone feels like something is unfair, whether unfair to themselves or not, speak up and state your case. Letting stuff fester isn’t going to help anyone. Legally, you have to follow the wishes of the will, but in a healthy family situation, people will make things right.
13. Neighbors from Hell (and Other Places)
How do you handle obnoxious neighbors? I put a pretty large premium on good relations with my neighbors, as I’ve seen time and time again how having a friend next door can be an enormous help in a pinch. But what if they’re just foul people who do things that reduce your property value or cause you to have unnecessary hardship, like parking a car in your driveway or letting their dog poop in your yard. As usual, don’t let it fester. Swallow your feelings, go over there, and talk about the problem. If it doesn’t go away but it’s not a legal problem, then you may have to take matters into your own hands with a privacy fence or something similar, but try to talk through the problem first.
14. You Did What to My Car?
Here, Schwarz and Fleming focus on the implications of lending items to friends and family, or when family members cause damage to your property and just blow it off. In short, any time someone treats your property as though it’s their own and doesn’t step up to the plate to keep it in good shape, there’s a problem. Their advice? Always make it as right as you can if you break or damage something that belongs to a friend, and then you have the right to expect the same from them. If your child, for example, breaks something at a friend’s house and you don’t replace it, you have no right to expect a replacement if they accidentally break one of your items.
15. Let’s Break a Deal
Deals between family are made all the time, and are broken all the time, too. You promise to go on a vacation with friends, they put up the deposit for you, and then you’re unable to go. You’re late paying back a loan, or someone wants you to pay back a loan early. These things happen all the time, and the best way to deal with them is to try to do what you can to make it right, whether you’re the person on the hook or you’re the person with the hook. Recognize that the other person has needs, too, and suggest an equitable arrangement. If your actions are leaving someone hanging (like in the deposit example), do what you can to make it right by paying for at least your half of the deposit if not all of it.
16. The Wedding Bill Blues
So many people get emotionally tied up in weddings and the costs easily spiral way out of control, bruising feelings and relationships. The best way to plan for a wedding is for everyone involved to be clear on what their expectations are, and everyone who is paying a bill should be involved in that decision. So, if mom and dad are paying for all or part of the ceremony, they should be involved in the decision to buy $100 champagne. If you’ve asked bridesmaids to participate, they should be involved in the dress selection process both as a group and individually, so if you’re asking them to spend more than they can afford, they can tell you honestly without creating a social situation. Be aware that there are others who are impacted by your wedding choices, and be considerate of them, but if you’re afraid of being drug along for the ride, just ask what’s entailed in being a bridesmaid (or whatever role you’re filling).
17. Parents and Kids
The relationship between parent and child is often very complicated, and this chapter addresses many such issues. The one that really caught my eye was the advice concerning how to handle expensive lessons for a talented child without fostering sibling jealousy. Their advice was (as usual) spot on: go for the lessons, but not at the expense of denying things that the other child might want. Their example basically said that lessons are fine, but not if the other sibling has to give up the basketball camp they’ve been dreaming about. The key, as usual, is balance, and with your children, you need to balance attention and care, regardless of individual talents.
18. Cheating on the Friendship
Ever had a friend take complete advantage of your friendship by mooching off of you repeatedly, or only calling you out of the blue every once in a while when they want something? It stinks, doesn’t it? My view is a bit harsher than the authors of this book: I take such mooching to be a sign that the friendship is over (or nearly so) and thus I don’t often respond when it becomes clear that I’m just being used for something. The authors mostly just say that you should be up front about any such fairness issues if the friendship is still close, or just quietly let things drop if it’s a long lost friend calling up and asking for something.
19. Living with the Thieves of Kindness
The advice in this chapter really boils down to a catch-all for most situations not covered elsewhere: learn to say no.
Some Thoughts on Isn’t It Their Turn to Pick Up the Check?
I was left with several thoughts while reading Isn’t It Their Turn to Pick Up the Check? Here are a few of the more interesting ones.
The root cause of most problems that spring up because of money is lack of communication. To me, the real result of society’s unwillingness to talk openly about money issues is a lot of hurt feelings and built-up resentment. I can think of countless times in my life and experience where a good conversation would have solved something that eventually boiled up into a fight or the end of a friendship over a simple money issue. Don’t let it happen – if something’s rubbing you wrong, talk about it and get it straightened out.
Keep a friendship active if it’s important to you. If you’ve ever thought about an old friend and feel regret that you’ve let the relationship start to melt away, take the effort and contact the person. Send them a note just to see what’s up. Don’t wait until you need them for something – just try to keep the friendship alive without being a mooch.
Money does strange things to people. I often think that a money situation reveals a person’s true colors – what their values actually are. If someone’s willing to completely rip you off for $20, what really is the value of that relationship? I’d say not very much.
Is Isn’t It Their Turn to Pick Up the Check? Worth Reading?
Isn’t It Their Turn to Pick Up the Check? does a great job of focusing in on the touchy boundary issues between friends/family and money. It addresses a lot of these issues in a very specific fashion, and their selection of specific areas to tackle was quite good. I was easily able to envision similar situations in my own life in many of the examples.
I think it’s because of these examples that this book really worked for me. It became very human and very applicable to my own life, and thus it gave me a lot of pause to think about the money/family mistakes I’ve made in my own life and how I can avoid them in the future – mostly, by talking about things before letting resentment grow.
If you’ve been burned by money issues with friends and family, this is an enjoyable and fairly short book well worth reading. Here’s a good litmus test – if anything in the above review really seemed to strike at a situation you’re familiar with, this is one well worth reading. It definitely applies more to people with large social and family circles than to loner types, though – if many of these issues seem unfamiliar, then this book won’t do much for you at all. For me, though, it was an enjoyable book that made me think about money in new ways – and that’s always a successful book in my eyes.