How Not to Lose a Friend over Their Spending Behavior

by RJ

in Psychology

A pciture with some of my best friends (my twin brothers) at the Chicago Blackhawks game

If I had a nickel every time I have heard someone say, “My friends spend too much money”, I would have $2.45.

My poor sense of humor aside, this is a problem that is universal for young adults. Out of a group of friends, there’s always one that likes to spend a bit more than everyone else. Unfortunately what happens a lot of the time is that you stop hanging out with this person.  It’s not like you don’t like them, you just can’t keep up with their spending.

The big question is, how do you maintain a relationship with a friend who likes to spend more than you?

Talking About Money

If I log in to my Facebook account, I can see what my friends ate for breakfast, pictures of how much they drink last week, what they watched on TV, how they did in fantasy football, where they are SOOO excited to go on vacation, and how they hate their job.

Our generation is open about every subject but one…money.

Before I started Gen Y Wealth, I can’t remember one solid conversation I had with a friend about saving, investing, budgeting, a personal finance book, etc….Now that I do have a blog, which my friends do read, I find us talking about money often. The reason being, I’m transparent  about my financial situation here. In turn, they share their own personal experiences regarding money with me.

If I turn down a chance to do something fun but expensive, my friends understand what I’m going through. They realize that my wife and I are down to a one income, have 11 weddings coming up in 2011, and they know other financial goals of mine.

On the other hand, there’s no hard feeling when they turn down something fun but expensive I want to do. I now understand what my friends are struggling with financially. Some are saving for a wedding, some engagement rings, some have some credit card debt. Whatever the reason, now that we’re open about money I have a better understanding for the reason behind their decision. There are never any hard feelings.

Set a Goal This New Year with a Friend

The obvious answer isn’t for you to spend a few hours of your day, writing a personal finance blog so you can start talking about money with your friends. Start by setting a financial goal or two with some of your closest friends.

Instead of talking about that dream vacation you’ve always wanted to take with each other, lay out a plan to save for that goal. Let your friends know what you’re going to change in order to reach that goal. Just as importantly, ask your friend what changes they will make in order to reach that goal.

If you would like, take it one extra step by having Mint email both of you an update once a month about your progress.

This method is a lot better than losing a friend. Plus, in the long run, you might even help them out more than you think.

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{ 8 comments… read them below or add one }

Kevin MNo Gravatar January 5, 2011 at 8:29 am

That picture might lose you a reader – Blues fan here :) I think being frank and honest with your friends is the best option, otherwise it just leaves things up to interpretation or assumption.


RustyNo Gravatar January 5, 2011 at 2:33 pm

I definitely have a friend like that. He routinely puts $75-80 dollars on his tab at the bar because he loves to pay for everyone’s drinks. Sure, it’s nice to get free drinks, but I know that he’s having a hard time saving for a medical expense of his.
I’ve wanted to approach him regarding having a joint savings goal (not account, lol, I wouldn’t ever do that to anyone), but I’m afraid of making him upset with me.

But sharing a goal sounds great. I think talking with my girlfriend (who just got her dream job!) about saving for a trip together this summer is a good idea. :)


PatrickNo Gravatar January 5, 2011 at 11:10 pm

There are so many factors when talking about money with friends, especially when they are not being honest with themselves let alone you.

We have all had friends who always seem to have something new that you just can’t figure out how they afford it. In the end 99% of the time they can’t afford it and are either living on credit cards or just living widely outside their means.

This is a form of peer pressure, why should I ruin my financial stability because you don’t care about yours? Being a friend is tough, and the toughest thing you can do is tell a friend no. Sometimes that message is the most important thing you can do though.


DavidNo Gravatar January 6, 2011 at 10:03 pm

One thing I don’t like is people using dates to define the Millenial Generation. The way I see it, ANYONE can be gen y if he/she is tech – savvy, open – minded to diversity of all kinds, and is into the latest music and entertainment. I was born in 1979 and all these characteristics describe me, so that makes me a Millenial. I feel this way because there are just some people who do not fit into the generation to which they were assigned. Just call me a VERY forward – thinking individual.


Financial SamuraiNo Gravatar January 6, 2011 at 11:13 pm

I don’t get it. Why do we care what our friends spend?


RJNo Gravatar January 7, 2011 at 1:38 pm

@Financial Samurai – The problem is when you have a friend, that you enjoy being around, but can’t afford too


Richard StookerNo Gravatar January 11, 2011 at 11:01 pm

Hi, RJ,

You bring up an interesting subject, not often written about.

Realistically, in years to come it won’t be such a problem because you’ll find yourself spending much more time with friends in roughly your economic sphere (such as co-workers, professional associates and neighbors), than with friends from school.

Some of your current friends may soon be making more money than you, and will hang with a higher class crowd than you can afford to. Others will fall behind you. And if you try to guess who is who, you’ll be wrong more often than you think.

That’s life.

Your best course of action is to set a good example by taking good care of your own finances, to be open to discussing money issues (without giving away information you consider private — you’re not obligated to reveal your gross income or expenses), and then to hope your friends learn and mature. Beyond that, you have to accept they’re big boys and girls who must accept responsibility for their own lives. Give advice if asked. Shut up if you’re not.

You will lose many friends in this life, for many different reasons. Money is an important one, but it’s just one.

If someone is buying you lots of drinks that you know they can’t afford, you’ll just have to let them know it makes you uncomfortable, because it creates a sense of obligation when you can’t afford to return the favor. If they get POed, all you can do is encourage them to get some help, because they have deeper issues you can’t solve for them.

risks of investing in bonds


Raise Venture CapitalNo Gravatar January 19, 2011 at 8:58 pm

I also have few friends and some colleagues who spends more than what they earn. Well, these few good friends have good income (or their husbands have good income) who spends a lot buying things that are not necessary. And there was one previous colleague of mine who used up her credit limit after owning a credit card for the first time of her life (she had very low credit limit since it’s her first time by the way). Just like what you said, it’s not that I don’t like them, it’s just that I can’t keep up with their spending. I really did try to avoid them but I still managed to maintain our friendship.


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