Wow what a sleaze bag! You don't hit students up to put on YOUR competition.
Asking you to buy a block of 50 lessons is a red flag warning especially if you've told this instructor cash is tight.
If your instructor is an independent - there should be a price reduction on block levels of lessons. Now if this is Arthur Murry you may have 30 lessons on the book, but never be surprised if they pressure you to buy more. They love to tell you "in 30 lessons they are not sure how far you will progress or if you plan on staying longer. So if you want the better instructor you need to buy more."
There is no reason you should be "friends" outside the studio. You don't hang with your hair dresser, manicurist or your massage therapist out side those "store fronts" do you? If you see them at the mall or grocery store your pleasant, but your not best buds.
Like was previously posted START LOOKING FOR A NEW INSTRUCTOR/STUDIO NOW!! Keep this search to yourself and use up what lessons you have on the books. Stick to your guns and say NO each time you get hit up for more cash. It's really sad how a few bad apples can really tarnish an entire industry.
Your are right, ballroom dancing for competition is an expensive hobby. Most of us REALLY have to plan our year of dance carefully and budget carefully. You don't need any extra help on the financial drain.