Friends and Personal Finance Management

Recently one of my bridesmaids came to my city to attend a professional conference, and we were fortunate to be able to spend some time together as well. This is not a friend I had talked about money and personal finance management with before, despite having known her for over 15 years. It came up on this trip because she just quit her job in Boston to move to Atlanta with her fiance. She and her fiance just bought a house, she got a brand new car, and she’s planning for her wedding — which is in less than a year and will have 125 guests.

So on this trip, money was an active topic of conversation

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At one point she mentioned that she and her fiance had to qualify for their house using only his information because her credit wasn’t very good. I assumed there was inequality in our financial situations, so this was somewhat surprising to me.

She has a professional doctorate in a medical-related field. Not only has she been making more money than I do per year, her work history is longer than mine. Since she knows I write for GRS, she wanted to get my feedback on some of her financial habits and plans for the future.

Once we began to compare notes, however, we realized we both had important things to learn from each other. What she learned: Less is more When she checked into her hotel, she couldn’t find her ID at first. As she was digging in her small purse, she removed perhaps a dozen cards. Later, she mentioned that one of the reasons she had financial mistakes in her past was that she got overwhelmed by tracking due dates and verifying which accounts had a balance and which didn’t.

I explained my philosophy in personal finance management, which is the fewer accounts you have, the less there is to track. The less there is to track, the smaller the chance that you’ll make a mistake. I have three credit cards and only carry two of them in my wallet:

1) my daily-use card, which has a low limit but is paid off in full every month, and

2) my emergency card, which has a very high limit but no balance.

Since she and her fiance plan to merge finances anyway, she agreed that now would be an ideal time to determine which cards she needs, and which she can close — probably without even noticing a difference day-to-day.

What I learned

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It’s OK to splurge (If it is a splurge) On the second day of her trip, she wanted to get mani/pedis. I wanted to make sure I wasn’t being financially pressured, so I thought to myself: While it did mean spending differently, this is not something I do on anything even remotely resembling a regular basis — I didn’t even get my nails done before my wedding.

It wouldn’t lead me to exceed the budget I had made to do things while she was in town. We’d already been hiking (free) the day before and had a free activity planned for the remainder of the day. It was a better option than something like a movie where we wouldn’t be able to talk to each other. So we found a nail salon and got our pamper on. I even opted for a couple of extras, like the sugar scrub for my feet and having flowers hand-painted on my big toes.

If you keep a splurge a rare event, you not only appreciate it more, you can afford to spend slightly more when you do it. What she learned: Fitting in and professional success When I dropped her off at the conference hotel, it turned out to be next to some high-end outlet malls.

I’ve lived in my city for 5 years and never been once. In fact, I honestly never even noticed they were there. She, however, strongly implied that she’d find the time to buy some clothes while she was in town. However, I pointed out that she’s moving to a completely new area of the country and transitioning from working at a public hospital into private practice. As a result, she won’t know what the workplace culture is like until she’s been there for awhile.

My supervisor brags about shopping at Saver’s and Marshall’s. So when someone at work tells me they like my outfit, I proudly describe hunting through the racks until I get a designer find at Goodwill for $4. And while I love the way my engagement ring and my wedding band look together, everyone at work only wears their band, so I model after them and save the major bling for evenings and weekends.

She saved some money and gained a new way of thinking about her new co-workers!

What I learned: Networking with strangers I’ve always known my friend is the type of person who’s never met a stranger. I not only got to see her in action on her visit, I also got an update on the unexpected payoff her friendliness yields her. Not only did she meet her fiance on my honeymoon cruise, she befriended another couple on that trip (who were on their honeymoon).

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It turns out they live less than an hour from where she will be living now. She’s kept in touch regularly on Facebook, and so the relationship was still warm when she found out she’d be relocating to their area. Similarly, while she was out for her visit, she started chatting up someone at a bar. Turns out he was moving to Boston, and she has a ton of contacts in his industry. They exchanged email addresses so she can continue to help him job-hunt. While there’s no immediate payoff for her, I have no doubt he’d be glad to do her a favor down the line.

She’s a master of building social capital. Who changed — her or me? While it’s been over a decade since she and I went to college, my memory of her is of how alike we were. Time and distance have given me a new perspective. Finding out things about her that I didn’t know also made me feel like we can continue to grow our relationship.

We’re not just resigned to rehashing our glory days — although that’s fun too! But there’s still more to do and learn as our lives change and we adapt to new situations.

How has your financial philosophy changed over the years?

How many friends or family members have been privy to the evolution of your attitude towards money?

Do you, like me, find it hard to even remember how you felt and thought about money when you were younger?

What’s the biggest money-related surprise you’ve ever had when talking to someone you thought you knew inside and out?

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