Jul 15

What to Do When Your Pal Never Pays (and Other Friend/Finance Situations)

Money and relationships can be tricky sometimes. And those issues aren’t just limited to romantic relationships… spending and saving differences can affect friendships, too. If you’ve ever felt bad after suggesting a brunch place that’s slightly on the pricier side, even though you know your BFF is in a cash crunch, or have ever dreaded being asked to dinner with your wealthier friends, you’re not alone. In fact, in one report, 44 percent of people said that money causes stress in their friendships. But it doesn’t have to be so stressful! Keep your finances from causing tension in your friendships with these strategies.



When you earn more than most of your pals

First of all, if you feel even the slightest bit ashamed about being successful: don’t. However, even if you’re proud of your salary, you might feel like you should keep the total truth about your finances under wraps if you have friends who make significantly less. But that’s not necessarily the best plan, advises Ellie Thompson, CEO of financial advising company, Money Therapy. “Don’t minimize or downplay your success by saying that you got ‘lucky’ or that you ‘didn’t do much’ to earn your money,” she says. “This can seem like an easy way to keep the peace but may breed resentment in the future.”


Anyway, your pals probably already realize that you’re in a different tax bracket, and don’t want to draw attention to the difference, either. Suggest activities that don’t cost a lot (or anything!), like taking a walk or meeting at the beach, and let your friends add on brunch plans or cocktails if they feel like spending.


If you really want to do something that you know is outside your friend’s budget, you can also offer to treat–as long as it doesn’t make you feel resentful, or hurt your own financial plans. Just make sure to check in with yourself to make sure treating your friend will make you feel good and won’t hurt your budget. You should also make sure it’s OK with your friend. If all that checks out, go for it!



If your friends have a lot more disposable income than you

Whether it’s because they have family money, big deal careers, or all just won the lottery, sometimes the truth is our friends have more moolah than we do. And that’s OK! And it’s also OK for you to speak up when they suggest activities that will be a squeeze (or downright impossible for you) due to your more limited funds. Rather than getting evasive or feeling embarrassed, just be honest (they’re your friends, after all!). “That sounds fun but it’s a bit outside my budget right now,” is simple and to the point. And then make sure to tell them that you’d still love to hang out–and suggest an alternative, less expensive plan.


And if your friend offers to treat? You have to do what feels right to you, but accepting a gift from a friend can sometimes bring you closer, explains Betty Wang of BW Financial Planning. She says that it feels good to know a friend cares that much about you and to keep in mind that you’d do the same if the roles were reversed.



After your BFF loses her job

Leaving a job can mean some tightening of the purse strings ahead. CFA Lou Haverty of Financial Analyst Insider says you should reach out to your friend and acknowledge the difficult situation. “Start with small gestures of kindness and encouragement,” he says. For example, you might take them out to coffee and pass on job leads that could be of interest. “Then gauge their reaction over time to see if they need additional support or feel more uncomfortable with the attention.”


Haverty adds that everyone will react differently in this situation — one person might appreciate small supports like buying dinner, but others might feel uncomfortable with being treated because it could highlight their lack of income or make them feel self-conscious. Whatever it is, try to follow your friend’s lead and adjust your levels of both emotional and financial support based on their reactions.



When you feel like a friend never pays her fair share

If your friend seems to go missing every time the check comes, you might start to feel a little resentful. This is a tough situation because you probably value the friendship, but might feel like you’re being taken advantage of. A good way to tackle this is before the check comes, ask them how they want to split it — Cash? Card? That way it’s clear you’re not treating. If the person is still hesitant to pay her portion, you’ll either have to ask what’s going on or be prepared to distance yourself in the future, at least in situations where money is involved. “In the long run, you might be better off just minimizing your exposure to the situation,” says Haverty. 


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