You know what they say: You can choose your friends, but you can’t choose…their salaries. And while you’d never begrudge their fat paychecks, it isn’t always easy hanging with a group that has filet-mignon tastes when you're on a Big Mac budget.
And while your friends might not be explicitly pressuring you to accept pricier outings, that doesn’t mean their influence isn’t causing you to spend more than you should. A recent study by Ted Rogers School of Management found that frugal consumers spend more money shopping and dining out when they’re with friends who have high spending habits.1
Keeping up with your friend’s lavish lifestyle isn’t just a strain on the budget—it can be a strain on the friendship as well, says Shannah Compton Game, a certified financial planner and millennial money strategist in Los Angeles. “A lot of times in friendships, you’ll have someone who’s making a lot of money and someone who has a really tight budget,” she explains. “That tight-budget person wants to be in the circle with everybody else, so they'll try to stretch their budget to go out when they can't afford it.”
But just like a big night out can be followed by a nasty hangover, the morning after a pal-pressured splurge can be full of second thoughts. “It can get to a point where you feel like you have a “lose-lose” choice: cheap out of paying for something and risk embarrassment, or overspend and let the resentment build,” Compton Game says. Either way, it takes a toll on the friendship.
Starting a conversation about your spending limit isn’t always easy. “Money is an ever-present part of our lives, but for most of us, talking about it—even with our close friends—is deeply uncomfortable,” says Kate Levinson, Ph.D., a family therapist and author of “Emotional Currency: A Woman's Guide to Building a Healthy Relationship with Money.” You might not want to talk about your smaller paycheck, or you may worry that suggesting frugal alternatives could be misinterpreted as criticism of your friends’ money-management skills.
Breaking the money-talk taboo
The only way to really tackle the money stress that’s affecting your friendship is to talk about the big-ticket items and your money motivation, Compton Game says. “Nobody wants to be honest and lay the chips on the table, but saying, ‘Okay here's my situation,’ can reduce the embarrassment or fear that’s building up in your friendship,” she says.
You don’t have to share your specific salary or say you’re worried about your finances to get the message across. Compton Game encourages her clients to let their friends know about a financial goal they’ve set their heart on, whether that’s something aspirational (such as budgeting for a bigger apartment) or practical (like saving enough for a three-month emergency fund). Once your money stress isn’t a big secret, it’s easier to pick and choose what you’ll spend on your social outings.
You can even start a game where saving money is the object. Take turns finding out who can find the happy hour with the best deals or see who can suggest the most creative freebie weekend plan. “If you make something fun out of sticking to a budget—everyone wins,” Compton Game says.