How to Cope with You and Your Friends Having Differences in Income?

How to Cope with You and Your Friends Having Differences in Income?

Written by Caitlin Wood
Last Updated February 13, 2014

Money and finances have always been an uncomfortable subject to talk about. Nobody likes to bring it up, and nobody likes discussing it. However, it’s constantly the center and focus of our everyday lives. We spend the majority of the day working to earn a living, pay our bills, and build up some savings.

Money can also be the dividing difference between you and your friends. Different jobs have different wages, and some people make more money than others. It only makes sense that some of your friends probably make more money than you do, and some probably make less.

A person’s income depends on a variety of factors including education, position, and experience. You might be a waitress, while your friend might be a doctor. Or you might be a lawyer, and your best friend might be a factory worker. In your circle of friends, there are likely several different levels of income.

People are always comparing themselves to each other and trying to keep up with each other, especially financially. However, this is almost impossible in some situations and can make it hard to spend time with your friends. In some cases the differences in income can cause hard feelings and even resentment.

If You Are the Friend with Less Money

If you are in the unfortunate position of being the friend with less money, you constantly feel bogged down with financial stress. Your friends might want to go out to fancy dinners, for elaborate weekends away, or to places you just can’t afford to go. The jet set lifestyle is just not within your budget.

Sometimes the friend with less money will incur debt to try to keep up with their friends who have more money. However, borrowing money to try to keep up is never a good idea. Eventually you will tap out all of your resources and be left with a stack of overdue bills that you can’t afford to pay.

If an activity is not within your budget, you should say no, or start suggesting more affordable activities that are within your budget before your finances get out of hand. Trying to keep up can only work for so long before it catches up with you. It’s better to decline invitations in the beginning than wind up in a financial slope that you’re going to have trouble getting out of later.

If your friends don’t understand and keep insisting that you participate in activities you can’t afford, you might need to sit them down and have a talk with them. Although the idea of discussing your financial situation with your friends is an uncomfortable one, it’s something that you’re going to need to do.

Telling them that you can’t afford to do the things that they want to do might help them understand that inviting you along to these activities is inconsiderate of your situation. At that point, taking your feelings and finances into consideration, they will most likely only invite you to participate in the activities that you can afford.

If your friends still don’t understand, you might need to start looking for some more friends that are in your income bracket. You can still keep your other friends, but having friends with the same interests and level of income will ensure that you have friends that you can hang out with, without worrying about breaking the bank.

One important thing to note is that if you are the friend with less money; you should never borrow money from your friends that do have money, even if they offer it. Situations like that always change the paradigm of the friendship and usually end in resentment.

If You Have More Money Than Your Friends

If you are the friend who has more money, that in itself is an uncomfortable position. You might find it difficult to make plans with your friends who have less money because you aren’t sure what they can and can’t afford to do. Trying to find an activity that won’t cause them any hardships isn’t always the easiest task.

If you ask your friends that don’t have money to go somewhere and they say no, don’t push or pressure them to go. If they offer an alternative itinerary, consider their income, and the fact that maybe they can’t afford to take part in your original activity. Keep their feelings and finances in mind.

Sometimes you might want to treat them by taking them out, but at the same time you worry that they might find it insulting. The best way to handle this is to take them out on occasion, and not too often. You don’t want to hurt their feelings, but you also at the same time don’t want to put yourself in a position of being taken advantage of.

If you absolutely need to go on weekend ski trips, and can’t live without fine dining, it might be a good idea to find some friends at your own income level. Then you will have friends that can participate in those activities with you, while you participate in less expensive activities with your other friends.

Whatever you do, don’t lend money to friends who are in unfortunate circumstances unless you want to lose those friends. Although they might have the best of intentions, nothing causes a greater divide in friendships than money. When friends lend friends money, resentment and heartache soon follow.

Caitlin is a graduate of Dawson College and Concordia University and has been working in the personal finance industry for over eight years. She believes that education and knowledge are the two most important factors in the creation of healthy financial habits. She also believes that openly discussing money and credit, and the responsibilities that come with them can lead to better decisions and a greater sense of financial security. One of the main ways she’s built good financial habits is by budgeting and tracking her spending through the YNAB budgeting app. She also automates her savings so she never forgets to put aside a portion of her income into her TFSA. She believes investing and passive income is key to earning financial freedom. She also uses her Aeroplan TD credit card to collect Aeroplan points so that she can save money when she travels.

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