As Americans, we’re loath to discuss our finances, especially among our friend circles. (Within families, the discussion of money woes is considerably more common.)
According to a recent Insider survey of 2,130 Americans ages 18 and older, money comes in dead last on the list of topics people tend to discuss while hanging out with friends. (Health, sex and relationships, politics, current events and pop culture all ranked above the dreaded finance talk.)
As former Atlantic staff writer Joe Pinsker wrote in 2020, it’s almost as if there’s a “society-wide gag rule” that discourages people from discussing financial details. That’s especially true if you and your friend have different socio-economic statuses.
Because we’re so tight-lipped about finances with those closest to us, money issues tend to crop up at the most inconvenient times: for example, when the bill arrives at a pricey restaurant and someone proposes splitting the bill evenly. (“Great,” you might say if you’re the cash-strapped friend. “Here I was purposefully ordering ice water and a few sides as my meal and now I’m shelling out $80.”)
Or, they might crop up when your friend from college who’s firmly in another tax bracket plans their destination bachelorette party and destination wedding. (Destination debt for you, since you’re still paying off your student loans.)
Friendship coach Danielle Bayard Jackson says she hears about friendship issues tied to financial disparities all the time, but usually in a roundabout way.
“The clients I talk to rarely come to me leading with financial discrepancies but it often comes up in the sessions,” she told HuffPost. “Typically as evidence for a larger issue to support a larger case they’re making about their friend or friendship issue.”
Sometimes, it’s because a friend feels frustrated that they’re unable to partake in their pals’ endless loop of dinners, $18 cocktails, concerts and vacations.
“It’s really important to feel connected as friends, and one basic way we do that is to share experiences,” Bayard Jackson said. “But a lot of social activities we engage in are highly dependent on the funds that you have available. We might share common interests but our access to those are different.”
In the age of social media flaunting, this issue can become even more pronounced, said Melanie Ross Mills, a relationship and friendship expert.
“Social media can contribute to the trap of feeling as if you need to spend more, do more, be more,” she said. “These traps can make maintaining friendship difficult if we let it.”
“I didn’t feel comfortable ‘boasting’ about [our home] purchase and felt silly complaining about the renovation woes we experienced as I realized how lucky we were to even have these challenges.”
– Lynn, the “rich” friend in a mixed-money friendship
It’s not just the less well-off friend who may feel awkward about money. For the more financially advantaged friend, it can feel like more money, more problems ― and certainly more guilt when going out with cash-strapped friends.
Lynn, a 37-year-old human resources executive living in Ontario, Canada, knows that firsthand. (Lynn, like others in this story, asked to use her first name only to more fully disclose issues in her friendships.)
“I’m the ‘rich friend’ in the relationship, and it absolutely affects our friendship,” she told HuffPost. “I’m in a double high-income no-kids partnership, and my friend is in a family of three living on one income. My partner and I are higher earners in our professions, and her partner doesn’t work.”
The chasm has been an issue in their friendship from the beginning, but they only occasionally discuss it.
“I’m unsure of exactly how she feels as she is always supportive and excited for my successes, but I definitely edit myself in our conversations,” Lynn said.
Lynn and her partner recently bought and renovated a house but skimped on giving details to her friend, who’s a perpetual renter.
“I didn’t feel comfortable ‘boasting’ about the purchase and felt silly complaining about the renovation woes we experienced since I realize how lucky we are to even have these challenges,” Lynn said.
Another recent example? Both Lynn and her pal felt disillusioned with their jobs in the last year. While Lynn’s friend looked for another role before jumping ship, Lynn quit with no job lined up, knowing her partner would be able to support the household in the interim.
Lynn makes a point to do what she calls “cheap and cheerful” activities together, but her friend skips the higher-ticket friend hangouts.
“We’ll go for walks, get coffee and have homemade meals together,” she said. “With my other more wealthy friends, we go out for dinner, have drinks often, and vacation in Hawaii together.”
Jay, a mid-senior-level engineer for a major defense contractor in his early 30s, is on the other side of the equation: Up until recently, he’s always been the less well-off friend. He and his wife, who works at a nonprofit part time, have two children and a combined income of roughly $200,000 a year.
Make no mistake: That income surpasses the “moderate” household income in his particular suburb of Orange County, California, but many of his friends come from wealth and have high dual-income earnings with their partners.
“What adds insult to the injury is finding out that your friend’s Rolex or a Palos Verdes home was something they didn’t buy and a gift from their parents.”
– Jay, a mid-senior level engineer for a major defense contractor in his early 30s
It wasn’t until recently that Jay’s salary rose to the level of those peers. (He’s also been at a disadvantage on the finance front because he was among the first of these friends to have kids.)
At his financial lowest, he quietly filtered out some friends who were making substantially more than him. Not because of the money so much, but because they “continuously reminded me of what they had that I didn’t.”
“I did the same thing with the ones who were inconsiderate of others and only wanted to indulge their expensive tastes while being 100% insensitive to what others could afford,” he said.
Jay admits that some of his financial insecurities are rooted in his socioeconomic upbringing: Unlike some of his friends, he doesn’t have generational wealth to fall back on or parents willing to help put a down payment on a house.
“What adds insult to the injury is finding out that your friend’s Rolex or a Palos Verdes home was something they didn’t buy and a gift from their parents,” he said.
The friends he and his wife kept are the ones who stayed humble and considerate of whatever mixed-income friends were making at any given time. In other words, they respected both the struggle and their friends’ wallets.
“There’s friends who’d offer to spot you for dinner or understand the real reasons that you can’t afford a Vegas trip,” he said. “I’ve stayed loyal to them, and now we’re all on similar income levels, so it all ended up working out.”
Clearly, this friendship issue is complicated. If you find yourself in this position and want your mixed-income friendships to stay intact, read on for some advice on how to bridge the financial divide.
Accept that it’s human to compare.
Relax, you’re certainly not the only one wondering how every other person on your Instagram feed managed to swing a two-week trip to Europe over the summer. Comparison is all too human, Ross Mills said.
“The first bit of advice I’d give is to just be aware that comparison is happening,” she explained. “It’s human to notice that your friend is driving a brand new Tesla when you’re still trying to pay off your five-year-old one. The key is not to allow the comparison to take root in negative ways.”
To avoid resentment, set boundaries for yourself.
If you often stretch yourself more than you’re comfortable doing, you’re inevitably going to end up feeling resentful at that overpriced dinner ― or even toward your friends themselves. Bayard Jackson has seen this happen with her clients.
“Some of the women I work with don’t have as much means as friends, but they still push themselves to go anyway,” she said. “I’m curious, why do you choose to go to an event or activity that stretches you beyond your comfort zone?”
“I often say that sometimes it’s not about the money at all,” she explained. “A lot of times, it comes from boundaries we haven’t set with ourselves.”
Rich friends can go resentful, too, if they’re footing the bill all the time, said Ross Mills.
“The ‘Bill Gates’ of the friend group can feel as if they always need to treat because they do have more disposable income,” she said.
In either case, it is important to communicate your needs and desires, she said.
“Together, choose restaurants, wine bottles and concert tickets that fit within the budget,” she said. “Stick to your boundaries and limits.”
If you’re the rich friend, try to be mindful of how you’re coming across.
Ask yourself: Am I sharing or bragging?
“You have to be mindful of your comments, which could come across as inadvertently boasting about your privilege,” Lynn said.
“A small example of this that I went through was lamenting how lazy my partner and I were lately and how we’d either ordered food or went out for dinner every night for a week recently,” she said. “This is something unheard-of in her household, and I realized how privileged I came across.”
If you’re the more money-conscious friend, learn to say, “No thanks, but what if we do this instead?”
Daria Victorov, a financial adviser with Abacus Wealth Partners, has been on all sides of this equation: rich friend, poor friend, somewhere-in-the-middle friend.
In her struggling days, working as a financial planner with wealthy clients who worked at large tech companies in Silicon Valley, she knew the people she mingled with were making at least double, if not quadruple, the amount of money she was making, especially when you factored in bonuses.
What made it particularly grating was when, after a dinner or a night out, she’d get Venmo requests for everything and anything, and oftentimes the requests were rounded up.
Over time, she learned to say “no” to long weekend trips or paid for her own tab separately.
She also learned something that all cash-strapped friends eventually come to realize: You may not be able to swing every trip or dinner date, but you can make suggestions that work for you.
“Maybe we went camping instead or got tacos instead of a fancy sit-down spot,” she said. “Ultimately, I knew I could not hang out with these friends all the time, especially as a savvy financial planner. It didn’t mean I couldn’t be their friend, it just meant I had to learn to say no.”
Opting out doesn’t have to be awkward. When declining, Bayard Jackson said you can send something along the lines of, “I won’t be able to make it to brunch this Sunday, but you guys have a really good time. Maybe we can link up on Wednesday for a drink at my place?”
Pick up some of the extra costs if you can swing it. (And if you’re the less well-off friend, treat your friend here and there.)
One friend’s “let’s charter a yacht” is another friend’s “Uh, can we just rent a duffy boat for the day instead?” And a $400 restaurant tab means very different things to different people.
If you know you’re relatively well off compared to your friends, it might be no big deal for you to chip in a little more than everybody else. Do that when you can.
“When it makes sense, I pay for a larger portion of the bill,” said budgeting expert Andrea Woroch. “For example, my best friend came to visit earlier this year. She flew out so I paid for the rental car for our picturesque PCH 1 road trip and some bottles of wine.”
Also consider splitting expenses proportionally based on income. “The key is just being open about what you can afford, and plan accordingly,” Woroch said.
If you’re the more money-conscious friend, treat generous friends to a drink or dinner when you can, to tilt the balance and let them know you appreciate them.
“When I was the one cash-strapped one, occasionally, I would buy my richer friends dinner or treat them out to drink, often citing the times they helped me out,” Jay said.
If you’re feeling judged or patronized because of how much you’re making, maybe reconsider the friendship.
Friendships shouldn’t involve having to perform and project a certain image about yourself that you can’t live up to, Bayard Jackson said.
“If they do, you might be in the company of ‘friends’ who you don’t feel emotionally safe to be vulnerable with, which may speak to something bigger,” she said.
Have at least a few friends you can be completely money-transparent with.
A good friend is someone who’s in the grandstands, cheering you on when you accomplish something long in the making. But they’re also the same person who’s there to console you when you trip and fall, Ross Mills said.
“We need people in our lives who will jump for joy with us when we get a raise,” she said. “We need those who will help us figure out a plan to get out of debt. And we need the wise, safe and neutral friends who won’t hold our paychecks against us, whether we make more or less than them.”