We often bond with our friends over shared experiences, whether that’s going out for dinner, booking holidays or heading to the pub. But when social plans start becoming more expensive, it can be difficult to keep up – particularly if your friends earn significantly more than you do.
A survey of 2,000 people across the UK found that more than one in five adults (22%) feel uneasy when friends suggest plans that cost more than they would comfortably spend, while 20% said these situations make them feel anxious, highlighting the strain money can place on friendships.
The poll also revealed several reasons why people avoid talking openly about finances with their friends, such as a fear of triggering someone who may be struggling financially (24%), concerns about being judged (16%) or being afraid of appearing “cheap” (11%).
Pension provider Aegon commissioned Opinium to carry out this research as part of its Money:Mindshift campaign, which explores the emotional and social factors shaping people’s attitudes towards money.
Dr Tom Mathar, head of Money:Mindshift at Aegon, said: “The research shows a clear link between silence and negative comparison. People often steer clear of money discussions to avoid awkwardness or fear of judgement, but that silence can undermine confidence.”
Burying your head in the sand or succumbing to the pressure of ‘keeping up with the Joneses’ can come at a big financial cost, so here’s some advice on how to navigate friendship wage gaps with sensitivity…
1. Don’t pretend that the gap doesn’t exist
“If you’re trying to keep up all the time and you’ve done a lot of work to perhaps convey the impression that there’s no difference and are constantly nudged into the better restaurants and the longer holidays, then you will inevitably end up spending much more than you can afford, which is a real financial risk,” says Mathar.
He recommends being forthcoming instead.
“Don’t pretend that the gap doesn’t exist,” advises Mathar. “You can give away a bit about your financial situation through your lifestyle choices, such as where you go shopping, whether you’re renting, where you go on holiday etc.
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“If you do this intentionally, hopefully you won’t be put in a situation by your friend where you are forced to say, ‘well, I can’t afford this’, because of the messages that you have indirectly conveyed previously.”
2. Make a social budget
Having an idea of what you want your budget for social plans to be can help you stay on track.
“Budgets are a great thing to have, and you don’t need a big budget for social time,” says Mathar. “You don’t always have to go to a big, fancy restaurant. You could just go for a picnic or cook for your friends at home, for example.”
He also recommends taking time to think about what your priorities are before setting out the budget, so it can cater to your needs.
“Ask yourself, what is important to me? Then think about how you can address that need with the resources that you have,” advises Mathar.
3. Communicate
Communication in friendships is key to avoid friction, especially when it comes to money.
“If someone does make a suggestion of going somewhere that is out of your budget, then communicate this,” says Mathar. “You could say something like, I’m happy to join, but could we do something simpler?
“Simple messages like this can diffuse a lot of tension and can convey what your budget is without mention numbers.
“Think about what you need to convey to your better-paid friend to make sure that you are staying within your means.”
4. Suggest cheaper alternatives
There are many fun ways to socialise with friends that don’t break the bank.
“If a group of colleagues suggest going out for lunch, but you don’t have the money to join, you could say: ‘I’m really keen to hang out with you guys, but I will skip the lunch and perhaps I could join you all for a walk afterwards?
“There are lots of activities that you can do that don’t cost much. Think about how you can still get that social time without doing the component that you can’t afford.”
5. Be empathetic
Empathy allows friends to better understand each other’s constraints and priorities, ensuring that a bond remains close. So, try to put yourself in their shoes.
“Compromise requires recognition and empathy on both sides,” said Mathar. “In a good friendship, there’s empathy and a desire to avoid shame, so you want to think about what your friends would be comfortable with.
“The better earning friend should be consciously thinking, that plan might put my friend in a difficult situation, for example.”
6. Focus on shared values
Focusing on shared values shifts the focus from financial disparities to emotional and intellectual connection.
“Don’t get caught up in moralising or weaponising the wage gap, by saying things like ‘people shouldn’t have that much money’, and try to put emphasise on the strong, common shared values that you’ve got instead,” suggests Mathar.