How do you manage having less money than the rest of your friend group? Should you be upfront about it or is it better to be discreet? In a new regular column about how money affects our lives, Sophie Hallwright (one half of financial advice platform The Curve) has some advice.
Imagine you’re out for dinner with a friend you haven’t seen for ages. You’re already feeling a little naughty for saying you could go (especially after seeing the state of your bank account) but convince yourself it’s okay because you’re spending quality time with a great friend.
But you made the critical error of letting her choose the restaurant, and not checking the menu or prices before you showed up. Then you had minor heart palpitations when you arrived at a waterfront location to find that even the least expensive entrées are over $20. You make an excuse, saying you had a big lunch and you’ll just get a side salad and a soda water. Awkward, what option do you have? Your darling friend orders four $16 margaritas, plus the fish of the day, the tiramisu. She invites you to help yourself to some of what she’s ordered, but you refrain – you can’t afford not to stick to your salad.
When it’s time to leave, the waiter asks how you’d like to pay the bill. You awkwardly look at your friend, praying that she’ll remember you ate a few leaves and drank nothing, and pay her share; but she suggests you split the bill – it’s just easier, isn’t it?
Fortune favours the brave
You robotically pull out your money card, even though it’ll mean you’ll struggle to afford groceries that week. But then, in that moment, you decide to do something brave. Something you’ve never done before. You suggest you each pay for what you had.
You can feel the perspiration on your upper lip, your feet are awkwardly shifting. The two seconds before she responds feels like an hour, then she says, “Oh, sure thing. Sorry, I forgot you barely ate anything!”
This scenario happens far too often. There tends to be an assumption between friends that everyone can afford the same activities, the same standard of restaurants, the same gifts and the same holidays. But it’s just not the case. Salaries differ wildly. Some of us have wealthy families, others don’t. And, depending on our situation with partners, children and housing, our weekly outgoings can vary extensively too.
Disparities in wealth can lead to uncomfortable situations like the above, but does that mean we should strive to surround ourselves with people who have the same amount in their bank accounts as ourselves? I think not.
We need to normalise several things. The first being that, when it comes to money, everyone has different financial goals, priorities and values (not to mention incomes). Those things should all be completely irrelevant when it comes to spending time with the people we love.
There are many things to think about when navigating this issue with friends. Obviously every person and friendship is different, but there are a few basic guidelines that can help avoid embarrassment or resentment.
Think before saying yes
Before making plans, figure out what your budget is for that catch-up. Are you able to say yes to a dinner date that could end up costing more than $50, plus an Uber home, or is a coffee at a walkable café a more realistic option for you this week? Communicate with your friend about where you’re at and what is financially accessible for you. If you can’t afford to spend any money at all, could you suggest a walk? Or to cook for them at home instead of going to a restaurant?
Be straight-up
If you’re in a situation where your friends are over-estimating how much you have to spend, politely make your situation clear, without apology or embarrassment. Money can be incredibly hard to discuss at the best of times, so if you think you’ll tie yourself in knots communicating this in person or over the phone, remember you can always craft a message.
When the higher earner is you
If you’re the more flush one in the friendship but you really want go for a fancy dinner, perhaps offer to pay for your friend? Or if that feels uncomfortable, you could send your friend a link to the menu so they can check the prices are okay.
It’s in our DNA as humans to want to belong; belong to a family, belong to a community, belong to a society. If we have to turn down hanging with friends because we “can’t afford it”, we feel a sense of exclusion. Next time your friend declines a group dinner because they can’t afford it, maybe suggest they join you afterwards for a drink? Or pop over for a catch up the next day? This will ease those feelings of rejection and still allow you to spend time with your friend.
Connection doesn’t have to cost
Friendships shouldn’t be dictated by what we can or cannot afford. Allow your friends the space and safety to feel like they can have these conversations with you – and be unashamedly upfront about your own situation.
The more open our conversions about money, the more we can support each other in achieving our financial goals. We should all be able to spend our money in a way that aligns with our values while, most importantly, not alienating us from the people we love.
And next time you’re staring at a bill, wondering if you should politely decline “splitting” it with your friend, be brave. A quote that comes to mind is from author Benjamin Mee. “You know, sometimes all you need is twenty seconds of insane courage. Just literally twenty seconds of just embarrassing bravery. And I promise you, something great will come of it”.
Sophie Hallwright and Victoria Harris are the founders and operators of The Curve, an education platform providing investing and finance content to women globally. They are currently dividing their lives between Tāmaki Makaurau and London.