How To Deal With Friends With Money

Dear Christine,
"My core group of friends from college make a lot more money then I do. They all dove right into their careers right after college whereas I have been more of a floater trying to figure out what I really love. They do a lot of things I cannot afford which is hard on my ego so I overspend just to keep up. How can I stop feeling so inferior and jealous?"
- Falling Behind Financially, 27, New Jersey

Dear Falling Behind Financially,
Adjusting to friends with money is a tough transition as most of us were financial equals in college who split tabs and cut coupons for pizza deliveries. Differing levels of income between friends can create differences that weren't there before. I understand that it's discouraging to feel like you are the one at the table who reads the menu from right to left while your friends enjoy reading it from left to right; ordering what is appealing as opposed to what is the least expensive.

But how do you make peace inside with income inequality? First, consider the question, if your friends were not making more money than you, would you be content with where you are? If the answer is no, this issue is not really about money - it may boil down to the fact that you are judging your "floater" path and are perhaps it's time to plant some roots in terms of your career. If the answer is yes, then you are playing a comparison game you will never win.

Comparison to anyone or anything else is a lose-lose game. There is always going to be someone richer, smarter, better looking, funnier, etc. The more you can focus on your own gifts and gratitude for the things you have in your life, the more successful you will be at not feeling inferior. If you keep your attention on what makes you feel separate, the more separate you will feel.

Money will only affect your friendship if you aren't honest about what you can afford and your friends are insensitive to your boundaries. If they are always making pricey plans, say something like, "Hey that sounds like a ton of fun but I am watching my spending, how about xyz instead?" Suggest an alternative or be the one that makes the plans in the first place.

In terms of jealousy, keep in mind that you never really know if money is truly making anyone happy. Perhaps your friends have to work longer hours or tolerate more stress than you. They may even be racking up more debt whereas you are budgeting and watching your spending. It's a well known fact that the more you make, the more you spend.

A way to transform jealous into something more useful is to use it as a fuel for learning. If you really do want what they have in terms of money, ask them to teach you more about it. Talk to them about your career and financial plans and goals. Ask them how they handle the green stuff - they may have some insight into investing, budgeting, or retirement plans.

The point is that it's the friendship that matters, not the number of zeros in your bank account. And if money continues to affect what type of activities you are able to do with your friends, perhaps you need to make some new ones - preferably ones who are in your tax bracket.
- Christine
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Comments

[bbceed]

Try to make some new friends. I'm not a believer in overspending just to keep up with your friends. At the end of the day, you're probably going home sadder and envious of your friends instead of appreciating their company. This hurts both you and them so just find a new group of friends or limit the number of times you go out with them.

[Aesthete]

Most of my friends with old money are more relaxed, secure, and outgoing because, unlike the "nouveau riche" they don't have to prove anything. The ones I know are also giving people who do contribute to worthy causes, not only with money but volunteer efforts as well. They tend to live and dress simply and modestly. Instead of running out and purchasing every new fangled "luxury" item, they preserve what they have, as many still live in the fine older houses, built long ago by their great-grea­t-grandpar­ents.

[ccpostman]

I find that my now rich friends are the slowest ones to pay back money or donate money to anything.

I have rich friends that still owe me money after 15 years. They basically avoid me now, since they feel guilty, but will not pay me back, as if it is breaking the rich mans code. It is like there is some unwritten rule that the rich can now cheat you. Their word to you on paying back money is nullified after becoming rich?

I also donate to PBS/NPR and they will not donate a penny, yet they watch/listen to it EVERY day! They figure someone else richer will magically pay for it. Unfortunately all rich people have the same self-centered view!
I just can not figure out how people get so tight with money. Brings them no joy, and makes them look like total greedy fools.

[newtom]

Write them a letter of collection. Demand your money back. Find new friends.

[lunchlady]

My experience with newly rich friends is mixed.
One couple is never available anymore. The last time few times I talked to her she was mentioning old friend after old friend, saying that they don't socialize anymore because of jealousy of their new wealth. She was abrupt and weird so I stopped calling her and she never called me again so I guess that's it. I initially felt bad and tried to think of all the reasons she might be angry with me but I've decided that she just wants to climb the social ladder.

We have other friends who have had bigger money longer and they don't act like having money is a reason to separate themselves. The richest guy we know sometimes takes us out to a fancy dinner when he comes to town, but he also likes coming to our place for a homecooked meal.
Another newly rich couple would never take us out for an expensive dinner, perhaps because they don't want to seem condescending, but I think they also don't want to be looked at as moneybags. If anything they've gotten less generous, not more.
Newly rich people are so excited about their money that they want to try expensive things with other rich people, and perhaps doing economical things just isn't fun anymore. If they don't value their old friends enough to either go cheap or treat them then the friendship dwindles.

[garystartswithg]

I think one point missed is there is a big difference between someone that has more money and someone that has a higher credit limit. I have lots of friends that make more and have 20x my debt. I don't pay for meals or shoes with credit but lots of my firends do. I don't have a house -- most of the people i know with houses don't really have houses -- they have 300k debt. I could have gotten a newer, nicer, better, faster, stronger car but my car is fine by me and that should be enough. i never dated anyone because of their car and i wouldn't want anyone dating me because of my car -- i mean seriously how many ways can you redefine shallow?

Friends usually like you for being you. If they pick up a tab on their credit card don't order a 80 dollar bottle of wine. Repricate by throwing a dinner party and making everyone coq au vin at home for the same price a single plate out cost.. In the long run your generosity will be remembered a lot more than a bowl of pasta at olive garden.

[1sparrow]

this vicious mafia of lawyers and the so called legal system. no? i thought so.

[Kassandra]

Stop feeling sorry for yourself would be step one.
Realize that money does not a good person make. If you are truly on a quest to follow your bliss you will have richness of the spirit. You may never have all the things your friends have and they may not soon either if you're following what's happening in this economy. Appreciate what you do have.
Hopefully, your friends don't look down on you for not having much moolah. If they do, get different friends. You're only harming your self esteem and chances of succeeding YOUR way if you hang with folks who don't support you and love you for what you are.
and stay away from "Power of Positive Thinking" books, they're junk

[Aesthete]

My black and financially poor family was rich in all the ways that matter. This is what attracted friends to us, whether rich, poor, black, or white.

[PresidentRobertBooth]

If you have friends with money, mooch off them.

[Isis N]

LOL, if only that worked!

[commonsenselives]

I would take a more pro-active approach to planning the outings. If you're the one doing the planning, you're the one setting the price. Also, if you and your friends are all self-made, why would it embarrass you to state bluntly "Sorry guys, can't afford that place right now. How about xyz?"

If these are truly your friends, they won't care that they're at a 3-star restaurant instead of a 5-star. They'll be happy just to hang out with you and catch up.

[Sage Richardson]

Unfortunately, money plays a tremendous part in our every day lives. It not only affects our life styles, but it also affects our friendships and relationships. Only as we mature, go off to college, and begin careers, money becomes quite an obstacle. It divides friendships, families, and plays a primary part of our decisions that we make. People with different levels of income between friends can create many differences. Some people understand the struggles of making money. Some people are born into a family with a great deal of money. So nobody is going to have the same opinion or views on how money affects people. Comparing yourself to anyone or anything else is not logical, because each individual is unique. Their wants and desires in life will always be different. What makes one person happy will not necessarily make the other person happy. “The more you can focus on your own gifts and gratitude for the things you have in your life, the more successful you will be at not feeling inferior.”

[skippyB]

Do inexpensive things with your friends. We have so many friends from all sorts of economic strata - and with the wealthy - some are self-made, some are not - and we just value each other and share. Some friends share travel adventures with us and can tell that we genuinely appreciate that they can do this -(we get a vicarious thrill fresh from the source) some have properties we visit at with them - we cook, and we all have a good time. Then there are friends we get together with for hikes or picnics - and it all gets mixed up.
Over time, it's about loyalty, caring, companionship, trust -
You need to learn to be yourself - unapologetically. And don't expect others to apologize for their fate or fortune - it can all change.

[Kelly Jo]

There is a good article address this issue over at "Get Rich Slowly'.
http://www.getrichslowly.org/blog/2009/08/11/peer-pressure-and-money-do-you-spend-differently-with-friends/

If you find yourself frequently in social situations where you spend more than you can afford, maybe you could be more proactive about arranging the get-togethers. If someone with more discretionary funds is doing the planning, the will gravitate toward activities than are in their price range. By taking the reins more often, you can nudge the group toward more frugal options. And sometimes, you'll just have to say, "No, that's not in my budget right now."

On a related note, it would be unfair to expect your more affluent friends to subsidize your spending. They aren't your parents, and I doubt you would appreciate being put in a child-like position. Such things tend to kill friendships.

[mjeffn]

Find friends who are in your same financial bracket. If you don't, one way or the other, you will end up subservient to the needs, wishes and/or demands of your "friends".

[julibelle]

'I do want to get rich but I never want to do what there is to do to get rich' Gertrude Stein

Like your life, live your life, accept what works, accept your degree of committment, make your own goals.

[yakmeat]

If these people are really your friends, they'll be sensitive to what you can afford. I have some friends who make vastly more money than I do, but they don't expect me to "keep up". When we are together, we do things all of us can afford. They might take vacations that I cannot, but they do that by themselves. If they're looking to spend time with me, they'll choose to do something that is accessible to me.

The common denominator among these friends is that none of them are trust-fund babies. They all remember where they come from. Being sensitive to the financial realities of others might be a bit harder to do for someone who has always had lots of money.