I'd want my friends to be honest, so I try to be as honest as possible with them. But say, if my friend is overweight, instead of saying "You look fat in those pants" I would say "We need to find some pants that flatter you a bit more - I don't like those particular ones on you." There's ways to be honest without being hurtful.

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Live as if you were to die tomorrow. Learn as if you were to live forever. - Mohandas Gandhi