‘Friendly’ debt costs us £100 each

Why you need to start having those awkward conversations about money

Cheers. But who’s buying this round?
Cheers. But who’s buying this round?

If you’ve ever been left quietly fuming because a friend hasn’t paid you back money that they owe then you’re not alone.

Almost a quarter of British people are currently owed money by their mates.

That’s the finding of a study by social payment app VibePay, which surveyed 2,000 people and found that those whose friends owe them cash are out by an average of £98.

Unfortunately, the fear of social awkwardness makes it very difficult for people to get what they are owed. Typically, people don’t like to ask for cash back unless it’s more than £15 because they are worried about appearing cheap.

And friends who do remind people about money they are owed have to ask twice, on average, before they get their cash back – meaning not one but at least two awkward conversations.

There’s also a gender repayment gap. Women are less willing to confront their friends and reclaim their cash – 24 per cent of men said they would challenge friends over debts, compared to just 14 per cent of women.

Luke Massie, the founder of VibePay, says: “As a nation, we find it excruciatingly uncomfortable reminding a friend they owe you money. Yet, this reluctance is not just leaving a big hole in our pockets, it’s also destroying friendships.”

Avoiding awkwardness comes with a pretty hefty price tag. And it’s not just an issue with lending money.

The cost of avoiding awkwardness

If you’re owed money and you’re too polite to reclaim it, you may like to know that losing money to avoid awkwardness is a fairly typical British trait.

Nine out of 10 British people say they have spent money just to avoid looking impolite, according to a study by the savings website VoucherCodes.co.uk.

Things like paying for a round of drinks or splitting the bill in a restaurant despite having a cheaper meal were some of the most common ways that people said they spent more than they wanted.

Anita Naik, a spokeswoman for the site, said: “Brits have a reputation for being especially polite and non-confrontational but, as the research shows, this quite literally comes at a cost.

“Buying an extra drink when out with friends might seem insignificant on its own, but each of these small costs can really add up – I’m sure most of us can think of many things we’d rather spend £279 on.

“It’s clear us Brits place value on appearing polite and maintaining harmony with our friends and family.”

Yet that can’t always work. One in five British people has fallen out with friends because of money, research from the mobile payment system Paym shows.

So what is the answer? How can good friends help out with an occasional sub or spend without being left out of pocket? Here are some suggestions for keeping both your money and your friends.

* Be clear on timings

By setting a clear timetable for repayment, even of smaller amounts, you highlight that you expect this cash to be returned to you in good time.

A Paym spokesperson says: “If you are buying some concert tickets for you and a mate, make it clear when you expect to be paid back, or even better get them to send you the money before you make the purchase.”

* Be clear it’s a loan

Massie recommends being really clear that a loan is not a gift: “When you lend a friend money that you expect to be returned, make it crystal clear that they need to pay you back – don’t let there be any confusion over whether it’s a gift or a loan.”

* Don’t feel you need to justify it

It may be tempting to explain why you need your money back, with comments like: “I need the money for my holiday”, but Massie says to resist.

“Don’t do it,” he says. “You lent them money and they owe you. If they come back with a reason why they can’t pay you back today, set a date for when they can and hold them to it.”

* Chase your money

It can feel so awkward asking for money that many people simply don’t follow it up. But that is when text messages can be really helpful.

Send a friendly message asking for the cash to be transferred, for example: “Hi, can you send me the £10 for Amy’s birthday present?”

* Use tech

There are so many apps that let you split bills or make fast payments to friends now. Some banking apps allow people to make payment using just a mobile number, for example.

So if you do end up spending money on a friend and you’ve agreed they will repay you, then having a handy tech solution could ensure they pay up immediately rather than run the risk they will forget.

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