Say what you mean, and mean what you say. This is good advice for being a better human, but terrible advice for writing good characters. Initial drafts often suffer from dialogue in which characters tell each other exactly what they mean, without conflict or subtext.
As you revise and discover what your characters really want in each conversation, what’s frustrating or thwarting them, what they feel they can’t risk revealing or facing at that point in the story—you can craft great dialogue, and better scenes, by holding back a bit of what characters really think and feel. This simple shift adds layers to your characters, and essential subtext to your dialogue.
For our example, we’ll look at the wonderful Writers and Lovers by Lily King.

I recommend Writers & Lovers to anyone who wants to write a book. It's about a struggling writer, Casey, learning to stay true to herself. Casey’s mother has recently died abroad, suddenly, and under mysterious conditions; she’s heartbroken and broke, and her friend has called to pressure Casey to attend her destination wedding.
Casey:
“I would give anything to be there in that beautiful place watching you marry the man of your dreams.” Brian, an oaf with the energy of a hibernating bear. “But I don’t have eighteen hundred and fifty dollars. I don’t even have a hundred and fifty dollars."“Well, I can’t pay your way. We’re already giving a free ride to my sisters.”“That’s not what I was angling for. I would never accept that.”
In this exchange, Casey actually is saying what she means. She’s being honest and straightforward, except for the little internal aside about the groom: Brian, an oaf with the energy of a hibernating bear. It’s funny, it’s visual—from that single sentence I can picture Brian—and it adds subtext. Casey has feelings about her friend’s fiance, she’s annoyed by the conversation, but she’s trying. She’s trying to be a good human by being vulnerable and honest about her financial situation, but her friend does not relent.
The dialogue continues with the friend pressuring Casey to put the cost of the trip on her credit card. Casey responds that she can barely pay the minimum now and the friend escalates the scene by poking Casey in the heart of her story:
“Jeez, Casey. At some point, don’t you think you have to grow up? You can’t expect to be given a pass forever. It’s time to be an adult. You can’t live in your made-up worlds all your life. People get real jobs that make real money so that they can be a real friend at their best friend’s wedding. I flew from my vacation in Bermuda to Arizona for your mother’s funeral. And it wasn’t cheap, buying it three days before.”The underside of my arms begin to burn.“Did your mother have any idea how much trouble you were in?”If she hadn’t said this, it might have been okay.“Did you pay for that ticket, Tara?”“What do you mean?”“Did you, yourself, pay for the ticket from Bermuda to Pheonix?”Silence.“And if we took away Brian’s salary at Schwab and your dad’s little allowance, how much money would you have working part-time at that nonprofit? Would you be able to afford Bermuda or your two-bedroom in SoHo? Are you more of an adult because two men are giving you the illusion of self-sufficiency?"She hangs up on me.I am hemorrhaging friends with these weddings. Murial and Harry are nearly all I have left.
It’s important to note that this dialogue doesn’t work only because of well-placed bits of interiority: Brian, an oaf with the energy of a hibernating bear, and physical response that demonstrates an emotional reaction: The underside of my arms begin to burn.
The dialogue works because there’s a push and pull—one speaker puts pressure on, trying to influence the other. The other, POV Casey, resists. This creates conflict and tension that builds to a defining turning point: If she hadn’t said this, it might have been okay.
After that point, Casey takes action (speaks out) in a way that will produce definitive consequences.
In real life, we’re never certain if people we talk to are saying what they mean and meaning what they say. In fiction and narrative memoir, we get to be deliciously, delightfully certain that they are not, that there’s more going on under the surface. When readers witness characters struggling to be better humans (and failing because of scene circumstances) we’re far more likely to fall in love with them, and follow them to the end of their messy journeys.

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