Money is a touchy subject in relationships — even in friendships. If you make less than your friends, you may feel less-than; make more and you risk taking on too many financial favors or coming across as out of touch. Nearly half of millennial and Gen Z respondents in a 2017 PayPal survey cited money as impacting a friendship. A 2018 Credit Karma/Qualtrics survey found nearly 40 percent of millennials spent money they didn’t have and went into debt to keep up with peers. According to a 2021 survey from Insider, people would rather talk about current events, politics, and relationships before discussing money with their friends.
Financial tensions in friendships are likely to pop up amid life transitions, says financial therapist Amanda Clayman. High school and college graduation, a promotion at work, a layoff or loss of a job, marriage, the birth of a child — these are milestones that can drastically change people’s financial situations. “That affects what the financial norms are between friend groups,” Clayman says. On top of ordinary life shifts, the pandemic has resulted in job and income loss and serious debt.
However, money expectations among friends can be easily managed with a few transparent conversations and flexibility. Vox spoke to four experts to help you navigate money talk with your inner circle.
Take responsibility where you can
Regardless of how much you make, commit to advocating for yourself and others, therapist and friendship expert Melanie Ross Mills says. Those who make more should ask friends what they’re willing to spend before buying front-row concert tickets. Or, consider how much it would cost a friend to take an Uber across town, and instead suggest meeting up closer to where they live. On the flip side, the lower-earning friend should express their priorities and limits. “They might not mind spending more for a better seat at a concert,” Ross Mills says, “but they don’t care for a 2015 French Bordeaux.”
If you’re the higher earner, don’t assume your friend doesn’t want to be invited to things you don’t think they can afford. While it may seem like you’re doing your friend a favor by not inviting them to an expensive spa day, don’t be sneaky about keeping the event a secret, says etiquette expert Elaine Swann. The person who isn’t in a position to afford the excursion could view the exclusion as rejection. Instead, explain that you know they may not want to come. “When you’re honest and up front, they have all of the information and they can now make a decision on how they view the friendship or the relationship,” Swann says. “They can view it as they’re being left out, or they can view it by saying thank you for helping me to dodge that bullet because I could not have afforded that trip anyway.”
For those really looking to curb their spending, you may need to be the planner in the relationship, Clayman says. Take the initiative to think of hangouts that feel affordable to you, like inviting friends over for movie night or organizing a picnic.
Should you need to turn down plans because it’s out of your budget, it doesn’t have to be a dour conversation, friendship coach Danielle Jackson says. You can keep it upbeat by responding with something like, “I can’t make it this time, but I’d love to have you over this weekend to watch that movie everyone is talking about.”
Set clear boundaries up front
Don’t wait until the bachelor party planning is well underway to share your budget for the trip, says Swann. Be transparent about how much you’re able to spend during the planning stages. Swann suggests always checking out the price of an activity beforehand to see if the outing fits within your budget and then letting your friend know how much you’re able to spend. “Be honest and say, ‘I’d love to be there. It’s going to cost us all about $100 but right now my budget is only allowing me $50,” Swann says. You can suggest an alternative activity or, if you’re comfortable, ask if they can spot you the money. If none of that pans out, “then just recognize that this is not an event you can attend,” Swann says.
Also, be honest with yourself about your budget and priorities. Clayman says it can be easy to talk yourself into spending more when you’re hanging with friends who you identify with on an ideological level — you might all consider yourselves high performers, for example, even if your income doesn’t reflect that and theirs do. You may be tempted to throw down your credit card and match the spending and energy of other friends in order to feel like you’re a part of the group. “If you identify with those people,” Clayman says, “then it becomes, ‘How do we find an activity that works financially for all of us?’” This means pre-committing to a certain price point (say, a coffee hangout instead of happy hour) and making sure they’re aware of that.
If you have difficulty sticking to your own budget once you’re out, Ross Mills suggests taking out cash before an event and spending only that amount.
Be transparent with friends who constantly expect you to pick up the check because you make more. And when you’re feeling generous, make a point to communicate that in advance; for example, if you want to invite a pal to get a pedicure with you, let them know you’re happy to pay if they can cover the tip. Whatever the scenario or payment arrangement, Swann says to be up front about what you’ll be paying for and whether or not this is a one-time treat.
Manage your emotions
Money discrepancies among friends can dredge up some uncomfortable emotions, including guilt and shame around suggesting lower-cost alternatives, or frustration if you feel like you’re constantly needing to make cheaper but less exciting plans. These emotions tend to arise when you aren’t transparent with your financial expectations, Swann says. “You’ll find yourself spending money you don’t have and building resentment toward one friend or more,” she says. “If you’re on a limited budget, don’t be mad, don’t take it out and be harsh on the folks that aren’t.” Instead, share why you’re declining an invite without casting judgment on your friends for their jobs or circumstances.
Just as crucially, spendier friends should never assume their money-conscious pals aren’t prioritizing them or the activities they find important. You shouldn’t assume a friend is snubbing you because they said an expensive dinner was out of their budget when you know they just went on a fancy vacation. Instead, understand that you and your pal have different values and priorities and it doesn’t mean they like you any less. “Money is so subjective that to try to say ‘this is the reality’ is always a touchy standard to have on somebody else’s financial life,” Clayman says. “Maybe they’re making different choices with their money. Maybe they’re focused on a goal or maybe they have three times as much in student loans.”
And if anyone accuses you of being cheap for not partaking in an expensive bachelorette party, it’s time to reconsider the friendship. “If you made a statement and you shared your truth and the person does not believe it,” Swann says, “let them go, honey.”
Get to the root of why money brings up uncomfortable emotions
Clayman and Jackson agree that while money brings up uncomfortable emotions, the root cause is always something else. Perhaps you grew up in a scrappy, blue-collar community and your high-earning corporate job makes you feel uncomfortable around your childhood friends who don’t make as much as you do now. Or maybe you worry your inability to pay for an international ski trip will expose you as not belonging in the group. “Are you afraid that if you set the boundary the friendship would be over?” Jackson says. “‘If I can’t go on these excursions with my friends, am I not going to be invited anymore?’ That’s not about the money.”
To get to the core of the conflict, Clayman says to notice what you’re feeling when financial discrepancies are broached — anxiety, sadness, frustration, conflict — and to think about what the feeling is trying to alert you to. Maybe you’ve noticed your higher-earning friend’s political values have shifted as they’ve gone up an income bracket and you feel let down and disappointed that you’re no longer on the same page. This is a clear indication the conflict is deeper than just money. Clayman notes this isn’t always an easy thing to do and may require some deeper, longer-term work.
Ultimately, you have to be secure with yourself and what you bring to the friendship, Swann says. Know that your friends will love you regardless of your income and budget.
“Know that everything is a season,” Swann says. “This may be your ‘wine at my home’ season before you’re getting to ‘night at the club with bottle service.’”