Samuel Butler said that friends were like money- easier made than kept. That may or may not be true, but no one could disagree that the issue of money between friends is a difficult one. The endless awkward situations- the dinner party you can’t throw, the meal out you can’t really afford, the too-expensive bottle of wine you bring to a barbeque- makes friends and money a tricky area. Here are some tips and tricks for dealing with it.
Different Sides
More than ever, people with different financial spectrums are friends. The increase of merit-based education, the big increases in salary for some jobs, and the breakdown of some aspects of the rigidity of the class system has meant we’re likely to know people with very different money backgrounds to our own. It’s not necessarily that we envy them, or the power that their money gives them, just that it can be an awkwardness. Experts suggest just getting it out there. Letting the issue boil over isn’t doing any one any favours. If you hate splitting the bill, when you’ve stayed on tap water and your mate has had a bottle of wine, then say so. Generally, they just haven’t thought about the issue. Of if someone suggests going somewhere you can’t afford, say so, as opposed to resenting the meal and the friends.
Same, Same, But Different
So often, we feel peer-pressured into purchasing habits. As the wondrous Suze Orman suggests, you could look at a group of women and see that they’re wearing similar clothes, same bag, same shoes. What you won’t necessarily see is that one might have a lot of money from work, another might have saved for months and another might have put the whole thing on her credit card and have little chance of paying it back. The friendship circles we swim in can put a lot of pressure on our purchasing, and it’s important to stay mindful of what really counts. In my life, I have less money than most of my friends because I work in the creative industries. It’s meant some sacrifices- I can’t afford to live in the city, I don’t go out as much as they do, I can’t save for a car. But they are all consequences of my decision and aiming for their lifestyle, without having their resources, is only a quick way to get into financial trouble.
Group Behaviour
The flipside of this is that group behaviour doesn’t necessarily have to be a bad thing. In a major study over 32 years, researchers looked at the effect of smoking and quitting on a social group. Not only does quitting effect those closest to you, making them more likely to quit, it also affects the people they know. The same is true of good financial behaviours. If you surround yourself with people who spend frugally, appreciate trying to save money, don’t give ostentatious presents, it’s more likely your behaviour will reflect that. So, what does that mean? To me, it means that the people in your life that make you feel guilty and awkward about money aren’t really worth your time. They’re not only affecting your mental state, they are affecting your hip pocket. So find some positive peeps and get saving.
Founder, Savings Guide
Personal Finance Blogger
Alex (A.J.) Wilson is the founder and head personal finance writer of Savings Guide (a registered Australian company with ASIC).
Alex has 12+ years of experience commenting on personal finance in Australia with major media publications including Sydney Morning Herald, News.com.au, The Daily Telegraph, The New Daily, Your Mortgage and more.
Alex is regularly featured on Channel 9, Channel 7 and ABC Radio as a leading consumer advocate.
Holding a degree from the University of Sydney (UTS) in Communications and Information Management, Alex is based in Sydney Australia and works full time while simultaneously running Savings Guide to help Australian’s make smarter personal finance choices.
Follow Alex on Twitter, Facebook, YouTube or LinkedIn. You can also contact Alex by email.
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