How to navigate big salary gaps in friendship groups

Money can be a bit of a taboo topic and, when it comes to friendship groups – no matter how big or small – finances can become a real issue.

Salary averages in different industries can vary dramatically – even if you’re working similar hours.

Furthermore, with the current cost of living crisis, while we may have been able to splash out on that expensive dinner or buy that extravagant present in the past, that’s now not realistic for many of us.

Within friendship groups, those earning more tend not to notice the strain on their budget whereas those earning less feel it more, which can make get-togethers, dinners and present-giving slightly awkward.

So we spoke to money expert Jasmine Birtles who gave us some top tips on how to navigate pay differences within friendship groups.

What are the most common issues between friends when it comes to money/spending?

Jasmine said: ‘Who owes what. There’s a big fight over splitting bills at restaurants.

‘People with money are happy to just split it in equal amounts. People on low salaries want to make sure that they only pay for what they had.

‘Again, it’s a good idea to make that clear at the start – get everyone to agree that they will pay what they owe, or you will pay what you owe and they can split the rest equally.

‘I’m a non-drinker myself and I have often found that people I’m out to dinner with will pay more if they’ve had wine, which is nice of them, though not all think that way.’

How would you plan a friends holiday and advocate effectively for your budget?

Jasmine said: ‘See if you can be the one organising it so that a) you can choose cheaper options (with luxury extras if they want them) and b) if there are enough in the group you might be able to get yours for free – as some organisations offer one free in a group of 10 bookings, for example.

What if friends say they will pay for you but you don’t feel comfortable accepting their money?

Jasmine said: ‘I have often had people offer to pay for me when I’ve been on little or no money (being freelance my income has gone up and down wildly) and I’ve usually be grateful to accept.

‘With other freelance friends our rule is that whoever is not working doesn’t pay and I think that’s a good rule. Usually, they will be working later and will pay for others – so it tends to even out.

‘On the whole I would say be grateful, accept graciously and make sure you give back by being the life and soul of the event and looking after whoever has paid…they deserve it.’

Is it better to have a conversation about money or to just not attend events/dinners?

Jasmine said: ‘A bit of both probably. Certainly have the conversation about money and don’t be in the least bit embarrassed.

‘Money is just numbers and, the more we see it as separate from ourselves and our psyche, the easier it will be to talk about it. But some events are really just over-priced and not that fun.

‘It’s often a good idea to be selective about what you accept. Often the problem with having a lot of money is that one forgets to think about what one is spending on and that can mean going to events that actually make one unhappy, let alone poorer.’

What if you aren’t sure of your friends salary but, because of their spending habits, you think they earn a lot more than you. How do you bring that up when in social situations?

Jasmine said: ‘Good point. Lots of people spend money they don’t have and this where it is really useful to have the honest conversation.

‘It’s quite possible that if you say to them that you don’t earn that much, or you’re saving for a deposit, or you’re paying off debts and that you have a tight budget for fun stuff, you might find that they look relieved and admit that they’re not earning much either – and that spending on these bit things is putting them into debt.

‘Occasionally, you might have a friend who thinks less of you because you earn less.

‘If so then that’s a rather useful indication that they’re not the sort of person you would want as a friend. It’s handy to find out early who is worth knowing and who isn’t – as it means you waste less time on the ones who are not worth it.’

What if you are the one with significantly more money and you want to do something a bit extravagant but your friends earn less?

‘If you can, offer to pay for them or pay half so that they can join you. Generally, you won’t be able to do this all the time but for the odd fun thing you could do it,’ adds Jasmine.

‘Otherwise I would go for cheaper outings that your friends can manage.

‘It will still be fun – the point is to be with your friends more than the event itself – and will save you money that you can put into investments instead and grow your wealth long-term.’

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