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The 5 Golden Rules of Economically Diverse Friendships

I remember the first time I was with friends and thought, holy shit, they are really rich.

Around the sixth grade, I moved from a humble suburb of Charlotte, North Carolina, to an affluent, WASPy sailing town on the Chesapeake Bay. The median on nearly everything around me rose with a whiplash-inducing immediacy: the clothes kids wore to school, the cars their parents dropped them off in, the houses they ran into for their afternoon snacks (and the overflowing, all-brand-name-stocked pantries those snacks were housed in).

My relatively humble home life, with its sale shopping and coupon clipping, suddenly felt incredibly embarrassing in comparison. And when I first learned that my very good friend — the one with whom I was used to being on equal footing, playing Pokémon and tag in the schoolyard — owned an actual horse, the change in my perception was immediate and somewhat heartbreaking. I knew we would never be the same, want for the same things, or have the same references and standards to compare. And when you’re 11, something like a best friend owning a literal fucking pony feels like a big hurdle to climb.

But we climbed it, and I managed to live another 10 years in a town where I was often decidedly, noticeably less well-off than many of my friends. And when the crash of 2008 hit, and I saw many of the lifestyles around me in that ostentatiously comfortable town cave in, I realized just how much my parents’ lifestyle — always living below their means, never being in debt, preparing for the worst — was nothing to feel embarrassed about.

When the 2008 decimation of inflated mortgages and easy credit hit my town, I felt for the first time that shift in privilege and in relationship to money. Sure, I wasn’t rich by any means, but my family didn’t have to worry about things drastically changing for our bottom line. Before I even left my hometown, I’d watched the elusive, maddening pendulum of “what is normal” swing radically back and forth in my life and in my social circles.

So now, living in New York and working in a creative profession (where one’s social circle easily includes people of all socioeconomic classes and backgrounds), I’m constantly running into the complications of having much less or much more than the friends we love.

I have friends with net worths in the seven figures who have paid for my fiancé and I to travel with them in ways we could never have afforded ourselves, and I have friends for whom I have gladly offered the same.

Particularly in spending every day writing and thinking about money (I founded The Financial Diet, a personal finance site for young women), I have learned to treat not just the topic of money but all of the inherent discomfort it creates with a deep fluidity. Money should never destroy friendships, but neither should it define them. And with all that in mind, I created these crucial five golden rules to remaining solid friends with people who are very economically different than you are.

1. It is always a gift between friends, never a loan.

If there is one thing I have learned in maintaining friendships throughout serious money differences, it is that you cannot make a loan between two friends.

If you cannot afford to treat the money as a gift — and feel happy to receive it back, but not dependent on it or expectant of it — you cannot afford to loan it.

The power imbalance, pressure, and uncomfortable timeline of a loan between two friends is almost guaranteed to cause simmering resentment, if not an outright fight.

If you want to give money, give it, but consider it gone and leave it completely up to the recipient to take the initiative to give it back if and when they can. The profound discomfort of the waiting-to-be-repaid period when it comes to friend-loans is reason enough to disqualify it, but what happens if someone can’t make the payments on time?

These are the kind of awkward, potentially friendship-ruining and lawsuit-necessitating questions that are raised if you are cutting a loan to a friend. It is better to avoid unless it can be universally regarded as a gift, paid back only on a voluntary basis.

This goes both ways. If you are the one who needs financial help, it’s bad etiquette to ask for the loan.

Now, you may have been mostly picturing things like car loans or help purchasing a house. But this comes up with things as small as a dinner.

2. Set expectations as much as you can up front. The person who wants to change them has to pay for it.

When it comes to everything from dinners out, to a group vacation, to a full-on wedding, there has to be a really clear set of terms of what is financially expected from every participant.

For example, is the host covering the lodging but expecting everyone to go dutch at restaurants? Or how about at a birthday party—is everyone chipping in for the cake and champagne?

Not only do all of these expectations need to be discussed openly, without judgment, and in a completely pragmatic way beforehand (group emails and shared Excel sheets are great for this), but it also has to be clear that anyone who wants to deviate from the expectations should be expected to pay for it.

For example, if you are on a group trip and one member decides, “Hey, we should tack on some bottle service at this bar we want to attend,” that person should only add the cost if they are offering to pay for it.

This allows the fluidity of a) a group excursion where everyone has agreed to the costs up front, and b) the opportunity to follow the whims of the night if someone absolutely wants to change it up.

If you are making an expensive change, then your responsibility is also to say something at that point to put everyone at ease. So, in the above bottle-service example, just say, “Hey everyone, let’s get bottle service — my treat!”

If you don’t say anything, the people you’re planning to treat are not going to enjoy your generosity, because their entire experience will be anxiety about having to spend money they don’t have.

In the other direction, if plans you can’t afford start to emerge, then you can say something simple like, “My budget for tonight is $100. Is there a way we can make plans that can include me?”

In almost all cases, your friends will value being with you enough that they will either change plans or gift (not loan) you enough to come along.

3. Make money a normal, fluid conversation.

The more you make money a frequent topic of conversation in a totally neutral, nonjudgmental way, the easier it will be to talk about the money realities that actually make a difference in your friendship.

Even just saying something like, “Ugh, I spent so much money this weekend,” or “I’m nervous about negotiating at my job,” opens up a fluid money conversation and makes both parties feel less of an ambient pressure to be constantly cool and unbothered about money.

The secretive nature of money and the shame surrounding it are what lead people more than anything else to feel that simmering sense of discomfort. The questions around “What does this person have?” and “What can that person afford?” become irrelevant when money is something addressed head-on and in a value-neutral way.

The discomfort you have around these conversations is that they are almost always awkward the first time. Push through until you normalize them.

4. Know your roles, your privileges, and your constraints — and own them entirely.

One of the most difficult elements of having an economically disparate friendship is the failure of both parties to really be honest and up-front about their respective financial roles and capacities.

The truth is that there is often one higher-earning (or at least financially comfortable) friend and one who is much less so. Avoiding that reality only leads to confusion, resentment, and a constant tug-of-war when it comes to what is considered “normal” spending.

Once you own the reality of your financial roles, though, and accept what that means in terms of what you can afford and what is out of the question, you can move on to a friendship that feels much more balanced and fluid.

For example, if one friend earns twice what the other does, acknowledging it gives the wealthier friend the ability to pick up the check more often and cover certain expenses.

Conversely, being frank about not being in the best financial situation makes the fact that one is constantly erring to budget-friendly hangouts or not offering to pay for things frequently not feel abnormal or unfair. The sooner everyone can be honest about what is realistic and what makes sense, the sooner they can stop worrying about the financial differences and just enjoy themselves.

5. Make your needs known, but be prepared to walk away if you feel they are not being respected.

At the end of the day, sometimes you will simply be misaligned with certain people about how to spend or how friends split things up.

While you should never be the friend who insists on breaking a group check down to the penny when everyone got mostly the same stuff, you should also not be the person who frequently gets caught paying nearly twice your fair share because you couldn’t speak up when everyone was putting down a card.

It’s up to all of us to advocate for ourselves and say openly what we can and can’t afford and try to set the financial terms of what we can do up front. But at the end of the day, if a friend or group isn’t respecting those boundaries or seems totally uninterested in adjusting their budget to include you, that might be your cue to exit.

Money should never impede two people from becoming friends, but not having a level of mutual understanding and respect (and empathy!) about our money situations is a big red flag that the friendship isn’t on solid ground.

Sure, one or two misunderstandings that leave you in the red can be forgiven, but if you are constantly left with that feeling of being taken advantage of or not financially listened to, it’s up to you to enforce those personal boundaries. Simply put, not everyone can be a great dinner companion — especially when it comes time to pay the bill.

If you have your own rules or experiences, share them in the responses.