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How to Keep Your Friendships and Budget on Track

By Colleen Kane

  • PUBLISHED January 03
  • |

Significant differences in incomes or spending habits can complicate relationships. Imagine a group dinner at a restaurant. As one friend orders another expensive bottle of wine for the table, without asking if everyone’s OK splitting the cost, another friend is quietly and desperately recalculating what’ll he owe—and how he’ll pay rent this month. 

But just because you and a buddy have different amounts of money to spend, it’s not the end of the road for your friendship. Whether you’re the one with plenty of disposable income or the one pinching pennies, here’s how good friends can make uneven budgets work.


Share Your Dreams and Goals
Sometimes, even close friends find it hard to talk about money. “Regardless of our income level, many of us can find ourselves shying away from conversations about money,” said Megan Ford, M.S., LMFT, a financial therapist at the University of Georgia and founder of Finding Harmoney. “We’re still socialized to find it too intimate or personal to discuss, even with good friends.”


You certainly don’t have to display your budget spreadsheet the next time you’re at brunch. Instead, you can share your broader financial plans—whether it’s paying down credit card debt, socking away regular payments into an emergency fund, or saving to buy a house. An understanding friend should get the picture. 


Recognize Financial Peer Pressure
A big night out can send a tight budget into a tailspin. If you’re getting invites to fine dining that would require you to break into your savings, it’s worth asking your friend if they would be open to another plan that better fits your budget, such as staying in and cooking with a bottle of wine.


High-rollers who are planning special occasions like a friend’s birthday can build in phases that appeal to every budget. For example, the whole group might attend a cheap activity like a beach day, or meet at a lounge for pay-your-own-way drinks. When it comes to the pricey dinner afterward, whoever wants to come can come.


Stay Away from Lending and Borrowing
A proverb says it simply: “Before borrowing money from a friend, decide which you need most.”


According to one study, borrowers treat loans as if they were gifts—and when lenders expect to be repaid, bad feelings erupt, breaking down friendships. So while it may be tempting to help out a friend, or to accept a pal’s offer of cash, it’s best to avoid this path altogether.


Find Fun Activites that Work for Every Budget
Realistically, friends who have lower incomes are going to have to say “no” to some invites.


Keep your social life alive by cultivating friendships with people who are open to hobbies or activities that work for anyone—you could go hiking or biking together, for example. Your high-income friends can still come to your potluck cookouts. (Let them bring the fancy cheese.)


Don’t allow money to let you forget why you like each other in the first place. “I believe that we need more honesty about money in our close friendships,” says Ford. “If we become more comfortable with exposing that part of our lives to others who love us, however much we earn, we de-shame some of our money hang-ups and ultimately become more confident in our own relationship with money.”



Colleen Kane is a freelance writer who has written for CNBC, Fortune, Money, and many other publications.



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