What to Do If Your Friends Earn Much More Than You (or Vice Versa)

We like to think that our friendships are strong enough to deal with such stupidity as financial disagreements. But the truth is, money can be inconvenient, especially when one of you makes significantly less (or more) than the other. Here’s how to deal with the most common problems that can arise.

Find common ground with classes

Your friend wants to go to concerts and movies all the time, and you can’t afford it. This is probably the most common problem when your friendships are scarce: the cost of the job . In fact, there is even an episode of Friends dedicated to this issue! On the show, Monica gets fired and everyone forgets about the problem. Hope you feel better.

Communication is the best solution. Your friend may not realize how expensive these activities are, so if they don’t know that you are on a budget, they will likely continue to offer them.

There is nothing wrong with directly saying, “I can’t afford it, I’m sorry.” Although some people avoid it because it sounds like an excuse, especially if you’re not talking to a friend about money.

If you are looking for another way to solve the problem, here are some scenarios to get you started:

• Try “We’re saving our pennies for [current savings target]” as suggested by “ You need a budget” user.
• Suggest an economical alternative: “ Le Cigare Volant is really expensive and I have a limited budget. Do you mind if we meet for happy hour at The Counter instead? “
• If it’s a big activity, like a vacation, financial psychologist Brad Klontz recommends starting the conversation on a positive note by letting your friend know how much it means to you. Then try something like, “My main financial goal right now is to save money to buy a house. This means that I need to cut my expenses. This vacation is not on my budget. “

Assuming you’ve tried the above and it’s still a problem, here are some additional tips:

• Pay yourself first : sometimes it’s not easy to say no . When your friend wants to go to an expensive concert, you probably want to go too! You can eliminate temptations like this purchase by using a zero-sum budget , which basically means you save your money before doing anything else with it. Thus, even if you go to a concert, you have already saved for your financial purposes, so you are good. Or, you might tell a friend that you can’t afford to travel because it literally doesn’t fit into your budget. Either way, you put your finances first.
• Discuss your goals : Getting to know your financial goals can help. If you have a strong friendship, chances are they will be happy to support your efforts, and they may also think twice about costly pursuits.
• Do Something, but Spend Less : If your friend can’t let go of their expensive habits, consider creative solutions. For example, money writer Shannon McNay told Forbes that when her friends are planning to go out to eat, she will cook dinner at home and then simply order dessert at the restaurant.

If these excursions catch you off guard, consider incorporating them into your budget. Obviously, you shouldn’t spend money that you don’t have, but setting aside a certain amount will help you prepare for occasional walks so you can budget accordingly.

For example, my second half and I have friends who really like going to a restaurant. We love doing it with them, but hanging out with them for a long time was going to ruin our budget. To fix this, we split our dining out budget into two different categories: regular restaurant spending and social spending. Basically, we are cutting back on our own dining habits so that we have more money to hang out with friends. In fact, now we only go out to eat when our friends are involved.

Ideally, however, you should be able to discuss your budget with friends, so other options won’t necessarily replace it. These are just additional fixes to find the sweet spot.

If you earn more

If you want to spend time with a friend on a budget, you must pay close attention to their finances. You can suggest more modest alternatives, for example:

• Happy hour instead of dinner at your favorite restaurant
• Birthday party instead of a party at a prestigious location
• Local weekend getaways instead of expensive week-long vacations.

If you really want to try a new restaurant and are going to go with your friend, you can suggest treating him. Here’s what Richie Freeman of Quick and Dirty Tips has to offer :

Just say, “We enjoy our time and I want to pamper you XYZ today.” Under no circumstances expect them to reciprocate, as you do it out of the kindness of your heart.

If they resist, offer them the opportunity to intervene:

“I told you it’s my treat, but listen, pay the parking and buy me a beer, and we’ll agree.”

So they still contribute little, but hopefully not in a way that ruins their budget. Of course, doing this too often can be problematic too. Your friend might think this is charity. Or they may even start to assume that you will pay for everything, and this is a whole new conversation in which you have to politely tell them that you cannot plan for their expenses.

In general, it is just understanding the friend’s situation. It’s okay to offer treatment from time to time, but offering cheaper alternatives shows a little more empathy.

If you are going to borrow money, set some ground rules

Few things make friendships more inconvenient than borrowing money. In general, it’s probably best to follow this rule of thumb: don’t.

But if you’re going to borrow money anyway , at least take this advice:

• Set a specific deadline : This usually depends on the lender, but as a borrower, you also need to keep an eye on yourself. You could tell your friend that you will get the money back when you can and they will brush it off as it doesn’t really matter, but they might have expected to get it back much sooner than you can. Setting a specific deadline avoids confusion in the future.
• Make a contract : It sounds like it would make things even more awkward, but having a contract can actually make things a lot easier. Both parties know what to expect when established payback rules are established.
• Pay Interest: Again, this sounds pretty cold, but if you’re going to ask for a loan, Business Insider offers to politely at least offer to pay interest, even if it’s a small amount.

If you make more money, you might be tempted to give in when a friend asks or hints to borrow money from you. If you do, follow another golden rule when it comes to lending money to a friend or close family member: don’t expect to get it back .

Before you say yes, make sure you are comfortable with it. Or maybe there is something they can offer in return. Maybe they have great photography skills and need some photos for your site. Tell them that you are happy to give them some money if they can help you with it. Of course, working together can also cause a lot of problems. So you can prepare for this and not expect too much from the situation.

And if you say no, you don’t need to explain yourself; a polite refusal should be enough. But if you feel obligated to explain the reason to them, here’s what clinical psychologist Dr. Daniela Schreier says to MoneyUnder30 :

If you think you should, explain that you have a rent, mortgage, or family. In this economy, of course, it is clear that people cannot waste money.

You can offer them support in other ways as well. If they are looking for a job, perhaps you could view their resume. If they are having trouble paying off their student loan, you may be able to help them find information about the options available to them.

Get rid of unwanted advice in the bud

Money can be a sensitive topic in friendships, especially when there is a wage gap between friends. For example, if one friend feels that another is mismanaging money, that friend may want to give advice. And it can be annoying.

If your friend gives you unsolicited monetary advice, Real Simple’s Catherine Newman suggests being direct and polite to say:

Thanks for trying to help me, but I may have made the wrong impression. I’m not really looking for advice.

She adds that you can also think about the way you talk to them. Maybe they are just trying to make contact because you talk to them about your financial situation quite often. People often react to a release by offering a solution, and they may not realize that you just need to blow off some steam.

If you earn more

Maybe your friend’s money situation is so out of control that you feel obligated to help him. Money writer Janine Eccleston suggests that you try not to summon it completely . Instead, discuss the situation related to the one they are in, but do not directly point out that they are wrong or make mistakes, because this can force people to defend themselves.

Can’t afford an expensive wedding? Get ready as soon as possible

Many couples go out of their way at the wedding, which often means that the wedding party has to be spent a lot too. Even if you’re not attending a wedding party, you might have to shell out a large sum of money – what if the wedding is in Hawaii and you just can’t get it going?

The best answer is really the most obvious one: just be honest. If you want a sample dialogue, here’s what the writer Antonia Massa suggests :

“I know you are working hard to plan this wedding and I would love to be there with you. But this year has been difficult for me financially, and I don’t think I can handle it. Hope you can understand.

There are a few things to keep in mind:

• Let them know as soon as possible that it is difficult to plan a wedding. If you are asked to take part in a party and you know that you will not succeed, you should inform the bride or groom as soon as possible so that they can plan accordingly.
• Don’t blame their choice: as Massa points out, you don’t want to say something like, “If you didn’t have a wedding in Aruba, I would go. But unfortunately…”
• Suggest something else : If you can’t, tell them what you can suggest as a friend. Maybe it will help in planning. Maybe it’s the post-honeymoon dinner. Whatever the scenario, it will let them know that you still want to celebrate. When I was recently unable to attend a friend’s wedding, I, for example, offered to help edit her wedding video.

If your friend specifically asked you to go to a wedding or stag / hen party and you can’t afford it, be sure to let him know how much what he asked for means to you and offer help again. Celebrate it more financially. …

If you earn more

Today is your wedding day, but you want your friends to be a part of it too. And if a friend is making significantly less money than you, you can take that into account when budgeting for the day. In addition, the Gathering Guide event website offers suggestions to buy yourself.

For example, if you’re dreaming of having a bachelorette party in Cabo and your bridesmaid can’t afford it, consider paying for her flight yourself if you don’t want to go for a cheaper alternative. The site adds that it’s also polite to let people know at your wedding how much they can spend overall on supplies and events. A Practical Wedding offers guests two or three hotel options (budget, mid-range, or luxury) with prices of at least $ 50.

Money can cause problems even in the strongest relationships. The good news: Simple communication, openness, and empathy can be critical. And in strong friendships, you will still learn to develop these skills.

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