Friends and money are like oil and water. Best enjoyed with a healthy dose of separation between them. However do we actually practice what we preach? To coincide with today’s celebration of World Friendship Day, Paypal has revealed new research which offers some eye-opening insights into money and friends (and the impact of the former on the latter) across Australia.
Friends and financial strains
In a time when the cost-of-living crunch is already tightening wallets, it seems that the social sensitivity surrounding money is causing additional strain. Many Aussies are finding themselves significantly short-changed due to the awkwardness of asking friends to pay them back. PayPal’s research highlights that half (50%) of Australians feel awkward or uncomfortable asking friends to repay borrowed money. As a result, 44% of people choose not to pursue owed funds to avoid embarrassment. This reluctance to address financial matters among friends is leading to significant monetary losses. On average, Aussies estimate they are about $1,350 out of pocket due to friends not settling debts. This financial strain is even causing 22% of Australians to decline activities with certain friends to avoid further losses.
You make we wanna shout!
The tradition of ‘shouting’ remains strong in Australia. Nearly half (46%) of Australians are willing to foot the bill for meals, coffee runs, or group activities, knowing they won’t be reimbursed in full. This generosity, while commendable, contributes to the growing amount of money owed among friends.
To navigate the delicate issue of debt among friends, many Aussies are turning to technology. A quarter (24%) of respondents prefer to send electronic payment requests to avoid face-to-face awkwardness. This preference rises to 35% among Aussies under 35. Additionally, 29% of respondents opt for bill-splitting apps like PayPal, a figure that increases to 45% among younger Australians. These tools offer a convenient way to manage shared expenses and reduce the social discomfort associated with asking for money.
Avoiding the awkward talk
The research also reveals generational differences in attitudes toward money owed among friends. While 41% of Australians prefer to be owed money rather than owing it, this sentiment is particularly strong among Boomers (50%). In contrast, only 31% of under 25-year-olds share this preference. Boomers may not be as familiar with the technology that simplifies repayment, contributing to their stronger preference for being on the receiving end of owed money.
With cost-of-living pressures mounting, it’s crucial to ensure that money doesn’t create tension in relationships. Bonnie Brady, a Consumer Insights Expert at PayPal Australia, emphasises the importance of addressing these issues: “While we should all strive to be more fearless to ensure fairness, it’s great to see that Australians are finding value in features like PayPal’s payment requests and bill splitting to take some of the sting out of sensitive situations.” An easy way to have your friends, and keep them too!
