Friendships offer the comfort and joy of connection as well as a source of social and financial conundrums. Social engagements like dinners, nights out, vacations, and gifts can be an integral part of cultivating friendships and can also represent a substantial portion of a person’s budget. It is often assumed that you know a lot about the people you spend the most time with. Money is one subject not commonly discussed in friendships, however. Lack of transparency when it comes to personal finances can lead to friends not being aware of the financial limitations of those in their friend group. Some may assume that their friends are financially well-off based on external markers like the clothes they wear, the cars they drive, or how they spend. In reality, the only person who truly knows what each individual’s financial capacity is themselves.
In situations where friends have similar financial situations, it can be easier to navigate activities that cultivate friendships without considering the financial impacts because they are similar to yours. However, when there are larger disparities in incomes amongst friend groups, it can lead to challenging dynamics that need to be addressed with care.
Here are a few ways to navigate friendships when there are income disparities.
If You Are the Friend With The Higher Income
Set Expectations About Outings
One of the most helpful tips for a higher-income earning friend is to be upfront about the costs of activities. If you are going out to brunch, share the restaurant you are thinking of going to so that everyone can look up the restaurant, decide if they can attend, or suggest alternatives. If you ask a friend to be a bridesmaid, provide a high-level and honest estimate of the financial outlay of being in the wedding. This strategy can be applied to any number of activities and can be a simple way to ensure no one is surprised by unexpected expenses that can put a damper on a good time with friends. This strategy has the added benefit of being discreet. No assumptions about a person’s financial situation are needed. Simply share the information and be open to follow-up discussions if there is an issue. If one of your friends does have a problem with a cost, whether in advance, such as choosing the restaurant, or in the moment, such as determining how to split the bill, approach the conversation with consideration for your friend and without judgment.
Be Open to Alternative Plans
After giving friends a heads-up on the expected cost of an activity, it is important to be open to alternatives. If a friend opts out of a particular activity, plan other activities they may be able to attend. If you have the desire and ability to cover the costs of an activity so that a friend can attend, do so if you feel comfortable and will not expect the same offer in return. If your friend group includes individuals from different income brackets, consider ensuring that you plan a range of activities so that you can still do what you want to do while also seeing the full gamut of your friend group.
If You Are the Friend With The Lower Income
Be Open About Your Financial Boundaries
Talking about money can feel vulnerable. Still, the flip side of overspending or feeling anxiety over hanging out with friends due to the financial implications can feel worse. It is not necessary to overshare your financial situation but feeling comfortable enough with your friend to opt out of an event outside of your budget can be a marker of solid friendship. If it is a big celebration for a friend that you need to opt out of, you could recommend alternatives within your budget for a later date that can still prioritize that friend’s big day without putting yourself in financial turmoil. Making less than your friends may mean that you may miss some events, but it does not mean you have to miss out on the friendship altogether.
Make New Traditions with Friends
If you have a particular friend who often invites you to events that are out of your financial range, an honest conversation about attendance and the creation of alternative traditions with those friends can ensure that your connection with higher-earning friends remains intact while also ensuring you honor your financial boundaries. For example, creating a standing monthly coffee break or walks outside for fresh air and exercise. These activities can be a great point of connection and cost nothing. This strategy brings the focus back to ways to connect as friends rather than simply consistently declining invitations or explaining all the reasons why you can’t hang out at the places your friends want to go.
Consider That Some Friendships May Not Be the Best Fit for You
If you find that your friend group is constantly putting pressure on you, whether intentionally or unintentionally, to spend more than you are comfortable with or that you are often priced out of activities, it may be time for an honest dialogue about how you feel. If an open conversation about addressing the income disparity in your friendship doesn’t result in viable options for continuing your friendship, it may be time to reassess the friendship. Ultimately, friendship should not be measured in dollars spent, and if you can’t be part of a particular friend group without spending more than makes sense financially for you, this may not be a good friend group for you. This doesn’t mean that these particular friends are bad, but that there is a disconnect that cannot be bridged at this time, and what’s best for you is to remove yourself from that situation for your emotional and financial health.
Approach Financial Conversations with Kindness, Consideration, Respect, and Honesty
Practicing good etiquette can make many situations less awkward. The most straightforward etiquette principles include kindness, consideration, respect, and honesty. Be kind to your friends regardless of their financial situation. An income disparity is not a death knell to a friendship, but you may have to be a little creative to maintain your connection. Be considerate that people may be working within different budgets and may not always feel comfortable speaking up. Additionally, be thoughtful that some friends may not be able to participate in activities that you cannot afford but that you can do other things together at another time. Be respectful of each other and yourself. Draining your bank account to maintain a friendship is not only stress-inducing but doesn’t treat your mental health with respect. Finally, honesty can be the key to maintaining good financial boundaries while cultivating friendships that continue to be fulfilling and not draining emotionally or financially.