It’s no secret that every generation handles money differently. Baby boomers are mostly secretive when it comes to finances. Millennials and Gen Zers, having grown up in a more open and connected society, are generally more transparent. Since many learn about money from their parents, generational differences can create a lot of confusion about what is right. From tipping to group vacations, here are best practices.
Dealing with income differences between friends and family
Maybe your income has skyrocketed compared to your old buddies, or maybe it’s more of a comparable belly flop. In any case, it can quickly become awkward when these differences become apparent – especially if you’ve known each other for a long time. But these differences are a natural part of adulthood, and the key to handling them with grace is honesty and good communication.
If activities with your friends are breaking your bank, don’t be afraid to tell them and refrain from the occasional waste. You can always offer free and low-cost activities to the group. And if you’re not comfortable sharing that your reason for sharing is financial, a simple “not this time” may suffice. It’s better to deal with a minor discomfort beforehand than commit to something you can’t afford.
When the tables turn and a friend or family member isn’t doing as well as you, focus on supporting them and spending time with them in ways they can afford. That’s probably what they want most from you anyway.
Contrary to popular belief, baby boomers are actually more generous in tipping. According to a 2022 CreditCards.com survey, 87 percent of Boomers who go to sit-down restaurants tip their server every time. Only 60 percent of millennials said they do the same.
Tipping can seem like a social maze of confusion, but the tipping rules are actually pretty simple. For waiters at a sit-down restaurant, plan to tip 15 to 20 percent of the bill. If you can afford it, it’s nice to tip even more, especially now with the challenges the pandemic is bringing to the service industry.
Another stressful situation we’re all familiar with: you’re in a group of friends, some wealthier than others, and the bill comes. How are you?
In this case, best financial etiquette is to hit the rewind button and settle on a plan before the staff takes your orders. As soon as you sit down, ask everyone, “Would you rather split the check or order it separately?” According to a survey by TD Ameritrade, Millennials are slightly more likely to split the check when dining out with friends (49 percent) than that they pay separately (38 percent).
If you figure out what you want to do in advance, you’ll avoid a huge hassle for the wait staff splitting the checks later. It makes everyone feel comfortable and it reduces control anxiety while eating. When it’s not always natural to speak your mind, it can be a little awkward, especially when your opinion differs from the consensus. But again, it’s better to deal with the discomfort head-on than to stretch your budget.
Buying gifts in a group
Have you and your friends or co-workers ever felt excited to go in together to buy someone an expensive gift? Again, the key here is good communication. If you’re the organizer, ask everyone what they’d like to contribute and suggest something in that price range.
Or if a group asks you for more money than you’re willing to pay, try saying something like, “I’m sorry. I can only afford $15.” They may be grateful for your contribution, but if they don’t accept it, you can purchase a gift on your own terms instead. If someone confuses you about getting involved in a group gift and you don’t want to contribute at all, you could say you’re considering buying your own gift.
plan group trips
Likewise, when planning group travel, a good rule of thumb is to scale it down to where everyone can afford it. If you’re the organizer, find out the basic cost of the trip in advance, as well as any group outings while you’re there.
If one person’s budget is lower than the rest of the group, you have two options.
It’s okay to ask your friends if they’re willing to accept your financial help. And you don’t have to give them money directly, which can feel awkward. You can offer to share a room with them or use your points to book them a flight.
You can try to arrange trips so nobody has to spend too much money or miss something they want to do. Maybe a day will be a spa day for some and a hike or museum tour for others.
When you’re on the tighter budget, it’s important to get your situation under control. Instead of trying to scuttle costly plans for the whole group, come up with an alternative and leave the invitation open to anyone who wants to join you. If you feel you need to pass on most of your experiences and don’t have another friend with similar needs, you might want to reconsider the trip. It puts you and your friends in an awkward situation if you constantly go out on your own.
Whether you’re asking for donations to fix your car or for a charity you’re raising money for, there are a few good financial etiquette tips to keep in mind. First, keep donation requests to a minimum. If you keep asking for money, it’s easy for people to get angry or turn you off.
Second, be willing to explain how the money will help. If you let them know why you care so much about a particular charity or how much their money will do for you, people are more likely to open their wallets.
Finally, don’t embarrass people. While it’s the easiest way to get a response, it’s also the easiest way to make someone feel like they’re being manipulated into donating. Send a broadcast to your network via email or social media. Give them the opportunity to proactively decide whether or not to help.
According to a 2019 Bankrate survey, about a third of people regret borrowing money or co-signing a loan for friends and family. Lots of things can go wrong, which is why some people have a strict no-credit policy.
But if you decide to borrow or lend from a loved one, keep these rules in mind.
Do not lend money that you cannot afford to lose.
Formulate the agreement. It may feel strange, but write it down and state the consequences for not paying. That way everyone knows in advance what to do and what will happen if they don’t.
Pay for weddings, bachelorette parties and bachelorette parties
No question: as beautiful and unforgettable as weddings are, they are also expensive. The average cost of attending a wedding as a guest is $460. If that’s not in your budget, it’s okay to reduce your commitment or skip it altogether. If you just can’t afford a $500 plane ticket, consider sending a handwritten card and gift instead.
If you know you’ll be spending on flights in the future, you might as well earn points and miles that you can use toward a free fight. The best travel credit cards offer increased premium rates for travel purchases, and some even offer sign-up bonuses of $1,000 or more.
If you’re planning a wedding celebration, it’s a good idea to get in touch with the key people ahead of time. Let some of your ideas float with them before making any firm plans. Ask them, “We were thinking of a bachelorette party in northern Michigan, would that be something you would be interested in?” How about a weekend at an Airbnb nearby?”
Opinions differ on Venmo etiquette, but most people agree on the basics: close the transaction on time. Don’t dawdle. Same day refund no matter send or request is best for both parties.
When requesting money from someone, it’s nice to first give them a heads-up on their preferred method of communication. For example, if you usually have a conversation on Facebook Messenger, first send them a quick message letting them know they can expect a Venmo request and what for. Feel free to use emojis to have fun.
Exchange of information about salaries and expensive purchases
Another big shift between generations is whether it’s acceptable to debate how much you make and how you spend it. In a recent Bankrate survey, 42 percent of Gen Z workers and 40 percent of Millennials had shared their salary with co-workers, compared to just 19 percent of Baby Boomers.
However, there are tactful ways to ask someone about their salary. Don’t ask your co-workers while they’re on the clock. Wait until you’re at an outside event like happy hour and test the waters by saying something like, “On Glassdoor, the average salary for our position is $40,000. Do you think that’s right?” This can lead to a discussion about what you both deserve if the other person is open about it.
Maybe it’s the sharing culture or the familiarity of being saddled with high student loan debt, but it’s also becoming more acceptable to ask how much you pay for things. In a 2017 Realtor.com poll, 81 percent of younger people had no qualms about asking the price of a home, while older generations were equally divided on whether they thought it was a faux pas.
If you’re not sure about asking and really want to know, a good way to test the waters is to ask a more general question like, “How much do houses in this area cost?” This can help the person with the information they have gives you, be as specific or general as she is comfortable with.
The final result
As you grow up you will find that everyone handles money differently and some are busier than others. But navigating these differences doesn’t have to be difficult. The key is to be upfront about your situation and what you’re comfortable with, and to respect the situation of others. This can be intimidating at first, but the discomfort wears off with practice.