Financially Toxic People – The 7 Types Of Friends = Bad For Your Finances

financially toxic people

WARNING! Financially Toxic People Ahead

Here are 7 Types Of Friends That Are Bad For Your Finances And How To Deal With Them (aka: No Reason To Hide Anymore)

Are Your Friends and Family a Threat to Your Finances?

There’s no denying it – even though we love our friends and family, some of them can be a hazard to our financial health.

Have you ever taken the time to consider the impact that your social circle is having on your finances?

If yes, give yourself a big pat on the back.

Awareness is the first step to being able to solve any problem.

If you however routinely turn a blind eye to the potential negative impact on your life it’s time to switch the lightbulb on and have a “lightbulb moment”

In general there are 7 types of financially toxic people (can be either friends or family members) that you need to be on the lookout for:


TYPE 1 – The struggling businessman or woman.

Oh I know this is a bit of a stereotype but these folk do exist!

This person is full of great ideas that seem worthy of a small investment.

An investment that they would ahem – like to get from you!

Unfortunately, having great ideas and executing them are different skills.

Please do not feel the pressure to invest in any of your family or friend’s crazy ideas.

If the warning bells are ringing while they are speaking, you need to pay attention.

You want to avoid investing money that you’re unlikely to see again.


Let the wannabe businessperson know that you’re uncomfortable investing in a business that isn’t even off the ground yet.

Or that you have a blanket rule to keep business separate from family and friends.


TYPE 2 – The partier

The partier barely needs an excuse to celebrate.

They celebrate everything and they want to do with you!

They insist that you have to come too because “I just finished cleaning out the closet” or “I got another promotion” or “I found a lucky dollar note” insert whatever excuse or reason they come up on the day.

Whatever the case they need the company and they want that company include you.


Show up for the celebration, but keep your expenditure limited to a soft drink.

You do not need to drink expensive cocktails just because your party animal friend is having them.

Another alternative is to say, “Thanks, but no thanks. Maybe another night.”

Don’t worry – they will find someone else to party with soon enough.


TYPE 3 – The charity case

This person is constantly collecting money for worthy causes.

He’s climbing Mount Everest to save the antelope and needs $1 for every vertical foot of ascent.

Or he raising money to save the animals and it’s a different animal every week.


If you don’t have money for the cause, assist with your time or let them know that you can’t contribute to every charity.

Support charities that are genuinely close to your own heart and decline the rest.


TYPE 4 – The fancy gift giver

Ordinarily most of us exchange presents of a moderate value with our friends and family.

That is the norm.

Then there is the person who is NOT the norm.

This fancy gift giver goes overboard and spends an uncomfortable amount of money on you.

By way of guilt, you feel forced to reciprocate and blow your gift-giving budget when it comes time to buy them a gift.


Suggest a dollar amount limit or let them know you’re uncomfortable with such extravagant gifts.

Nice presents are of course lovely but there is also a point where over-the-top generosity is just too much and UNNECESSARY.


TYPE 5 – The encourager

Have you ever been torn between the option of spending a lot of money on an item or keeping the money in your bank account?

The encourager always seems to talk you into buying that item you want, but don’t need.

All the while, they think they’re doing you a big favor.


Ah thanks but no thanks!

You want a person who helps you make the RIGHT decision, not the impulse decision.


Keep your shopping dilemmas to yourself.

Or delegate that encourager family member or friend to your “DO NOT ASK FOR AN OPINION” list.


TYPE 6 – The wealthy friend.

Your budget might only allow for a movie rental and a frozen pizza, which is fine for other friends who like to watch their money but the wealthy friend doesn’t want any part of frugality.

She likes to go to expensive wine bars and eat caviar that costs $200 per pound.

Which of course you would love to go to if you had the money but you don’t.

And it’s embarrassing to say “no” all the time.


Be honest and let your friend know her tastes are simply out of your budget.

There’s no other way to resolve this issue other than honesty.


TYPE 7 – The moocher.

Ah these are the WORST kind of money sucks.

The moocher is the person who eats all the food out of your refrigerator, borrows your tools and never brings them back, and always needs $5 for a variety of reasons.

They might think it means nothing – because that’s what friends do for each other, help each other out right?

Yeah maybe in the normal world where being generous with your friends is a reciprocal thing it’s fine.

BUT NOT in this particular situation where it’s selfish and one-sided.


Just say no – you can’t lend them money.

Or you’re saving that food for tomorrow night’s dinner.

Or you need that item that they want to borrow.

Alternatively you can be more blunt and say NO without any of the extra excuses because NO is a one-word complete sentence.

Moochers don’t deserve the added fluff if they are being disrespectful and just using you for food or money.

Take the time now to work out if you have any of these different categories of money suckers in your life.

If you do, just be aware that they can cause a threat to your finances. The key to dealing with all of these people is communication.

In every instance, you can choose to let the financially toxic person know:

A) You either don’t have the money to spend or waste OR

B) You’d prefer to keep your money in your bank account.

The conversation might be awkward, but it’s like ripping off a band-aid: the awkwardness is over fairly quickly.

I think both of those reasons are totally valid and fair.

It is up to you to stick up for yourself and take charge of your money.

Remember: Earning a lot of money is not the key to prosperity. It is how you handle it. (Dave Ramsay)

So please don’t allow your friends and family to drag you in the wrong direction with your finances.

If they were a true friend and sincerely wanted the best for you, they wouldn’t do that to you!

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financially toxic people
financially toxic people

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