Chances are, when you see your friends over the weekend, they complain about their increasing expenses or bemoan their dwindling bank accounts. But how much do you really know about their financial realities or how they manage their money?
Many people find it uncomfortable to talk candidly about money, whether it’s with family or friends. For one, most of us have been taught that discussing money doesn’t make for polite conversation. Whether you’re rich or poor, money can feel like a measure of self-worth and a way to define yourself. It is for this reason that money means something— we feel it reflects who we are as a person. Like it or not, it can be very difficult to talk about as it may be an aspect of your life that you’re not proud of.
Given money is inextricably linked to so many parts of your life, it is important to discuss it with friends (and even family), if for no other reason than to chip away at the anxiety and shame talking about money can stir up. Still not convinced? Here are some compelling reasons to discuss money with friends, and how to do it.
A Problem Shared
If your friends dine at swankier establishments, are quick to swipe their credit cards at department stores, and plan weekend getaways to Sun City without batting an eye, you may feel pressure to overspend rather than tuck funds away for investing or put towards paying off your debt.
If you’ve established a budget for yourself and can’t afford to keep up with the spending habits of others, don’t be afraid to speak up. In fact, you’ll probably find that some of your other friends were feeling undue pressure as well.
Remember that budgeting isn’t all saving and no fun! Swap in other cool, yet inexpensive, plans instead. Take charge of your social calendar by hosting a game night, spending your weekend camping in the great outdoors or going on a long hike, or suggesting you cook dinner and host instead of going out.
Let your friends know that while you still want to hang out, budgeting is still a priority. Being honest with your friends about your goals invites respect and understanding so you don’t just have to say “no” to every social offer that comes your way.
Sharing fears brings you closer to your friends – doing so requires vulnerability and trust. It’s also good for both parties: The person who talks about their fear feels unburdened, and there’s a good chance the listener will hear something familiar – a worry they recognise, which feels less overwhelming when they realise others have it too.
You might start by saying, “I’m worried I won’t be able to afford a house/put my kids through school/retire/all of the above – you?”
Such conversations can lead to solutions – an outside point of view can include useful suggestions. This line of discussion is also a great leveller: everybody worries about money, even the rich.
Goals & Attitudes
One of the biggest reasons you and a friend might fall out about money, is if you are not on the same page with your goals. If one of you wants to go on a big holiday every year, while the other wants to save for a house — that’s going to cause issues.
Sharing your goals and values about money with each other has been proven to improve financial cohesion. So, how can you understand your goals and attitude to money better? Talk to each other – That’s it. Below are some questions you could ask, and are worth discussing, to ascertain your goals and attitudes about money.
- What is your attitude to money?
- Do you prefer to live for today? And why is this?
- Are you confident managing money? And why is this?
- Do you think it’s important to keep track of income and expenditure? Why/why not?
- Do you like to shop around to make money go further or do you buy on impulse?
- Do you feel it’s important to adjust non-essentials when life changes?
- Do you ask for help with your money?
- What are your attitudes to spending, saving and borrowing money?
- How was money managed by your family when growing up?
The above list should get you going but once the conversation has started, feel free to research and add more questions, to keep the conversation going. Remember: it’s a two-way conversation. You can ask your friend about their monthly budget, but then don’t balk when they ask you the same thing. The questions will seem less pushy if you make it clear upfront what you’re willing to talk about.
If you’re the friend who has more, pay attention to how you behave. Don’t hide what you have but don’t be showy about it either. You shouldn’t have to make excuses for your good fortune, whether it was due to hard work or luck, but you can also be mindful that your reality may be different from that of others — and that many people feel sensitive about money.
Don’t offer to pay for every meal but treat friends with less to a casual meal occasionally, either out or at your house, without expectation. No one wants to feel like a charity case, and although most people will be happy to accept an invitation extended from a place of friendship, some may feel more comfortable paying their way. Let them.
In the end, good, solid relationships come down to one thing: respect for one another. Money can’t buy that. It can’t take it away, either.