I would to share with a few pearls of wisdom that I have learned the hard way while I have been on this curious writing journey.
Don't tell certain people that they're the source of inspiration for a given story.
This is especially pertinent if you write the kind of fiction that I write (here, here and here). This is the fastest way of a) making someone feel wickedly uncomfortable, and b) killing a friendship.
Think about it for a minute. If you write fiction that is flavored to varying degrees with sex, do you really want to tell a particular individual that they inspired you to write a steamy story?
While they may be flattered at first for all about ten seconds, that feeling will change faster than a politician with no courage of their convictions once they get hold of your story and read it. If it contains anything like I write (women of color are the main characters, either overtly or implied), I can almost guarantee that you will have the equivalent of a .45 pointed at an area between the legs while you try to explain their assumption would be incorrect.
So to cure this potential problem, if those friends (my circle of friends are predominately female) of yours ask about your inspiration, lie like a dog. You'll be thankful that you did, and more importantly, you'll still be in one piece AND your friends will still be your friends.
Don't tell certain people that you didn't write them into a particular story.
If you have a spouse or friend who knows about your writing and is generally supportive of your writing endeavors, and they happen to inquire on whether or not they're written into a particular story that you're working on, don't come down with a case of the honestys and tell them no. That is the worst possible thing that you can say, because it will create conflict and a argument where there was none before.
Again, think about it for a minute. If they know about the story that you're working on, and you've talked about it in excruciating detail for months on end, don't let them assume anything other than they might be part of the story. If you keep them in the dark, they'll be happy and you'll be happy (and still friends/married).
For the record, I have told one person that they were written into a story of mine, and that was because they won a contest. For details, check out part one and part two of that particular contest.
Don't tell people what you really write.
This may sound overly paranoid, but if people know you as relatively well balanced individual with a strange sense of humor and you have developed/cultivated that particular reputation for years/decades, for God's sake, don't tell people what you write, if what you write is polar opposite of who you are.
Case in point: my friends and co-workers have a tough time reconciling the person they know with what I write for fiction. Think I'm kidding? I've had conversations that start and end like this:
Me: "I do a little writing on the side."
They: "Really? What do you write?"
Me: "Adult fantasy/erotica."
They: "Ummm...that's interesting."
So if a casual acquaintance/co-worker happens to ask you what you write, and you damn well know that if you give a honest answer you'll be hoisted by your own petard, do what I do: create a new genre called "quirky fiction" and tell them exactly that. That way, your reputation remains relatively intact and people won't look at you sideways.
So my friends, those are my pearls of wisdom when it comes to explaining the writing side of my life to friends, family and co-workers. When it comes to strangers that I carry on casual conversations, then I disregard the first two and throw caution to the wind with the third.
How 'bout you? Any lessons learned or gleaned from your years of writing that you simply do not do anymore in the company of people that you know?