Immaterial of what age you are there are times when you get into a sticky financial situation. What are such situations and how do you handle them?

1. A close friend of yours has taken a loan – and is not making any attempt to repay that!

Well this could be a friend, a sibling, a colleague – and the amount is substantial. Best of course is to ask for the money, clearly. If talking is embarrassing, send an email. Or if there is a common friend ask in his/ her presence. There is no point in waiting, thinking, etc. – ASKING is a very important first step.

Of course going back in time, one simple lesson is NEVER to lend an amount that you cannot afford. Blame the tax authorities, your spouse, parents or whomever you want, but have the lending and repaying terms in writing. Once a person puts things in writing and issue post dated cheques, life becomes easier for everybody around.

2. You have a friend who pulls you along for trips you can ill afford:

Thanks to whatever reasons you have a friend who goes on those expensive vacations. Fine as long as you were not tagged along. Sometimes you just do not want to spend Rs. 8000 on a room night for a hotel. You may have other priorities.

You just need to say NO. I find that in group activities if you do not participate, it hurts the relationships – but better safe than sorry. Each person has different priorities in life. Maybe you have a more expensive hobby to support than your friend has. Maybe you prefer travelling by air, and he prefers travelling by train – so he has a greater budget for hotels. Maybe you take 3 vacations a year and he takes one vacation in 3 years. Maybe you go to exotic locations during an off season but he goes during a peak season.

Saying No politely will leave you safe, and keeping mum will leave you sorry. Take your pick.

3. Some friends do not know to split costs

I find this a big issue – especially with younger people going for parties and eat outs. There is a huge amount of different ways in which a bill could be split. Get the boozers to pick up the booze bill separately. Among the kids going out every Friday – obviously the girl who had only the soup does not want to pay for the food.

Again it makes sense to talk about bills, how will it be split, will the petrol / toll costs be split.

Do not let political beliefs or money matters interfere with your friendship!