How much does friendship really cost?

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Like a life partner, your closest friends are meant to stick by you for better or worse and for richer or poorer – but rather than helping you through your financial woes, your best pals may inadvertently be contributing to them.

A recent survey by Nivea suggests that a close friendship can cost up to £11,495 a year to maintain – that's a whopping £115,000 in just a decade. Around £2,000 annually goes on presents, while after-work drinks drain £275 from your bank balance and cash loans another £1,000.

But the greatest threat to your finances comes in the unlikely form of quality time, with the biggest culprit being those feel-good treats such as lavish birthday dinners, spa trips with the girls and boozy stag-weekends abroad.

The worst thing of all, though, is that you'll be just as guilty of frittering away your mates' money as they are of draining away yours.The following tips could help to keep your finances – and your friendships – in good health.

1. A problem shared…

The best way to deal with friendship overspend is together. If you agree a pact to sort out your finances you and your mate will both benefit and there'll be no hard feelings on either side – plus you'll be able to give each other encouragement along the way.

2. Start at the beginning

It's a good idea to keep a spending diary to find out where your money is going; maybe go through your statements and bills with your friend, looking for ways to cut back. Giving up shop-bought lattes and snacks can save a small fortune over time, while price comparison sites can help to trim regular household spending.

3. Check your credit report

Your credit report is your financial CV – it lists your credit accounts, from cards and loans to mobile phone airtime, along with your repayment record. Lenders use it to assess whether you are a reliable borrower, so it needs to be accurate and up to date. Pay particular attention to personal details, such as your name, address and date of birth, and contact the relevant lender to rectify any mistakes – even a minor error could mean you miss out on the best deals.

4. Tackle your debts…

Arranging an authorised overdraft or rolling debts up into a single lower-interest loan may make your finances more manageable, but brush up your credit report before you apply. Close any unused accounts, paying particular attention to any held with an ex–partner - your credit status could suffer if he or she has money troubles – and make sure you're registered to vote at your current address. This shows lenders that you live where you say you do, and may improve your credit score.

5. …and your spending

You also need to look at how you got into debt in the first place. If impulse buying is your weakness, run a purchase by your friend before splashing out. If it's lavish nights out and getaways doing most of the damage, look at cheaper alternatives that may translate into more cash in the bank.

6. Never skip a payment

It may seem like a short-term fix, but missed and late payments stay on your credit report for at least three years, damaging your credit rating. If there was a legitimate reason for missing a repayment, such as an illness, you can add a note of explanation. Setting up monthly direct debits will help prevent it happening again.

7. Plan ahead

If you've not already saving, start now; it'll give you a back-up fund for emergencies and treats, such as that trip abroad with your mates. If you can't trust yourself, use an account with restricted access. And remember that some accounts pay higher interest if you pay in regularly.

8. Don't keep problems to yourself

If you or your friend are out of your depth, talk to your lenders – they may be able to adjust your payment schedule to make it more affordable. Citizens Advice, the Consumer Credit Counselling Service and National Debtline all give free expert advice. Remember that a court action or bankruptcy will stay on your credit report for at least seven years and make it difficult to borrow.

Experian Credit Expert: A monthly fee of £14.99 applies after your free trial. You may cancel during your 30-day free trial without charge. New customers only. Free trial period starts on registration - further ID verification may be required to access full service which may take up to 5 days.

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