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How to Preserve Friendships When Your Financial Status Changes

It was one of those awkward moments I’d love to forget. I had flown to visit a friend after she had her first baby. As we shopped for clothes for her bundle of joy, I asked if we could go to lunch – my treat. My friend immediately bristled at the idea, and suggested we just head home to eat at her house. I kept pressing the issue – in my mind, I was crashing in her guest room, so buying her lunch was the least I could do. She continued to refuse and it turned into a cloud over our day.

Later that night, I tried to clear the air. I explained that I was more than happy to pick up the tab for lunch, so I didn’t understand the resistance. My friend explained that as a newly married mom, every penny counted. A spontaneous trip to a restaurant wasn’t in her budget, and my insistence on paying for her meal came across as condescending, rather than friendly.

I became more aware of my friend’s financial needs that day. While I was trying to be nice, she was sensitive about her financial situation. And it’s a problem many long-term friends experience – when we met, we were both struggling college students with the same tight budget, but life and circumstances had changed things, placing us on uneven ground.

Potential Money Problems Between Friends

Landing your dream job, getting a raise, or simply saving up until you have a nice financial cushion can make interpersonal relationships tricky. If you’re not careful, even small gestures can look like you’re flaunting your new-found wealth. If you want to preserve your relationships as your financial status changes, approach your interactions with forethought and care. Consider the following problem areas and how to deal with them.

1. Venting About Money

Complaining about money takes on a different nuance when you’re with a friend who has a bigger budget than your own. After all, venting that you don’t have enough cash to pay the rent this month may come off as a request for help from someone who’s more financially stable. It might be necessary to preface your vent as simply complaining, rather than a plea for help. “Money is tight, but I know we’ll scrape it together in the end,” sounds more innocuous than “I think we’re going to need help to cover rent this month.”

On the flip side, if you’re the friend in a better financial position, avoid interpreting every vent session as a cry for help, unless you’re certain your friend is approaching you for a helping hand. When in doubt, just ask. A good friend can show concern for another by asking, “Do you need help?” rather than assuming.

2. Lending and Borrowing

If your friend does ask you for money, be careful about your response. In my opinion, it’s never a good idea to lend or borrow money from friends. It can drive a wedge in your relationship, and no friendship is worth the cash. Still, if you’re in a position to help, consider giving a “no strings attached” gift, rather than an actual loan. Doing this anonymously, such as dropping a prepaid gift card in your friend’s mailbox, is a great way to offer assistance without expecting anything in return. That way, your friend doesn’t know that you’re the one helping, and you don’t have to worry about the payback.

If you must make a loan, write up a contract and agree on the terms. Be sure to include the following:

  • The amount borrowed
  • The payback date or payment plan terms
  • Any interest you plan to charge
  • Both party’s signatures

Miscommunication over a loan can create serious friendship tension, so put the terms in writing to keep the intent clear.

Friends Lending Money

3. Feeling Jealousy and Guilt

If you’re the one raking in the cash while your friend is in a financial valley, it’s easy to feel guilty about your good fortune. Similarly, if you’re the one pinching pennies, you may find yourself becoming jealous of your flush friends. Either way, the guilt and jealousy can affect your interactions, even to the point where you avoid spending time together.

If you want to preserve your friendship despite negative feelings, it may be time to have a frank conversation with your friend. Explain how you’re feeling and that you don’t like feeling this way, then come up with a game plan for how you can tackle these feelings together. True friends don’t want to say or do things that make each other feel guilty or jealous, but without voicing the problem, it’s unlikely that you’ll be able to come up with an effective solution.

4. Dealing With Uneven Budgets

While you might be able to afford to go to that new French restaurant, your friend on a tight personal budget can’t factor it into his or her budget. Suggesting the restaurant for a night out is a lose-lose situation – you come off as uncaring, while your friend feels pressured to blow his or her budget. Before you suggest an activity that costs money, consider your friend’s budget and suggest an option that’s comfortable for both of you.

One way to preserve the relationship and conserve money is to continue rituals you enjoyed when you both had the same financial status. If you loved to go to matinees because they were cheaper, ask your friend for an after-lunch movie. If you loved to go thrift shopping together, keep the tradition alive, even if you can afford to buy new. Not only does it take your friend’s position into consideration, but it helps preserve the traditions, routines, and rituals on which your friendship was built.

5. Picking Up the Tab

Every friendship is different, and while one friend might appreciate your offer to pick up the tab, another might view it as patronizing. You know your friend best, so always ask yourself how he or she might interpret your offer to help. Even if you make it clear that you’re covering the bill to be nice, someone who is sensitive about his or her financial status could feel belittled or insulted.

If you’re the one on a tight budget and you want to pay your own way, speak up early. For instance, if you’re eating out for the night, tell the waiter that you’d like the checks split. This sends a clear message that you’ll be paying for yourself and you can order within your budget accordingly.

In my experience, it’s best for friends to split checks at restaurants unless you agree that it’s a celebratory treat. Instead, if I want to treat a friend, I’ll order an appetizer or dessert to share. It’s a good rule of thumb to follow whenever you want to treat someone: Save the treat for a special occasion, or arrange it so it’s a treat for both of you – a shared dessert or a two-for-one spa day – to avoid any awkwardness.

Final Word

Let’s face it: There’s little chance that you and your friends will always share the same budget. Sometimes you’ll be sitting pretty, and other times you’ll be watching your bottom line. Either way, true friends should have little division over money. By being understanding and aware of each other’s finances, you can preserve your friendship throughout all of life’s ups and downs.

Have you found yourself in a different financial position than your friends? How do you cope?

Jacqueline Curtis writes about edtech, finance, marketing, and small business strategy. With over 14 years of copywriting experience, she's created content and scripting for organizations such as GE, Walgreens, Overstock, and MasterCard. She lives in Utah with her husband, three kids, and an overzealous springer spaniel named Penelope.

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