How to Stay Friends When Paychecks Diverge

  • By Karen Carr, CFP, Society of Grownups
  • October 04, 2015

friends and money

Friendships face all kinds of hurdles — from distance to diverging interests (no, I don’t want to hear about your kid). But the thorny issue that can derail even the tightest twosome? Money.

When one person has much more, it can be challenging to find activities that you can both afford. But like most relationship problems, this can be resolved with compassion and communication.

Here’s how to navigate this tricky situation.

1. Pay Attention to the Cues
In a perfect world, we’d all be honest and never suffer from embarrassment. In reality, it’s tough to talk money. That’s why it’s important to pay attention to subtle clues.

Keep your eyes open for signs that a friend is in a different financial situation. Maybe they’ve mentioned their student loan burden, or you’ve overheard them stressing about a rent hike.

If you’re the one struggling, try to remain sympathetic to challenges that may look petty to you but are very real to your friend. For example, if she gets a smaller holiday bonus than expected, it’s easy to feel dismissive. (You’d like any bonus!) But remember: It’s all relative. This could be a bad career sign. You don’t have to feign sympathy, but try to see it from her perspective.

2. Set Expectations
If you’re going out to dinner, make sure both parties check out the menu before you decide where to go. And feel free to ask for separate checks. An inexpensive alternative? Staying in. Invite your pal over for a low-key dinner. If you’re the poorer friend, don’t apologize for your digs. (She cares about you, not your apartment.) If you live in an expensive condo with designer furniture and a waterfront view, that’s awesome. But be sure to balance visits to each other’s places.

As for gifts, embrace DIY. I know someone who snapped photos of street signs on each of her friends’ blocks, then framed them inexpensively. Voilà: a thoughtful gift. You can also bake sweets, make cards from scratch, or jar some homemade infused spirits. For the holidays, propose a Yankee swap.

3. Be Honest About Vacationing
People who want to travel on the cheap are often willing to subject themselves to flights with multiple layovers or to squeeze three people into a hotel room. While these are smart ways to save, it can get uncomfortable quickly if all parties aren’t on board.

The solution is to be up-front. Don't pretend you're okay with sharing a hotel room if you're not. And don't agree to stay at the Ritz if you know it’s just going to stress you out. Discuss sleeping arrangements, thoughts on eating out, and activities beforehand. Remember: Lying by the pool is free. Parasailing? Not so much.

4. Be Gracious
Contrary to what our culture often teaches us, it’s not the worst thing in the world for wealth disparity to show through. The key is simply to behave graciously, no matter which end of the spectrum you’re on.

If you’re feeling flush and want to treat a friend, try framing it around an event. For example, if you just got a raise, let your friend know you want to celebrate and that the bill’s on you. She’ll feel less guilty about letting you pick up the check when there’s a good reason for it.

If you’re on the receiving end? Simply say thank you and enjoy. There’s no need to stress. Recognize that if you were the one with a fat wallet, you’d probably want to treat your friends every now and then too. After all, isn’t that one of the best reasons to have money in the first place?

5. Make It Less Taboo
Start talking about money. There’s plenty you can learn from each other. Maybe your friend, the up-and-coming artist, can show you how to be more frugal. And your investment banker pal can give you a few tips for your retirement portfolio. That’s what friends do.

Before joining the Society of Grownups, Karen Carr completed a BS in Finance, obtained her CFP®, and went on to work as an advisor at a boutique, private wealth management firm.

This piece originally appeared on DailyWorth in April of 2015.

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