Maintaining strong friendships is a vital part of our lives, but differences in income and wealth can sometimes put a strain on even the strongest bonds.
Of course, talking about money with friends can be awkward. But avoiding the conversation can lead to misunderstandings, envy or discomfort unless both sides come to the conversation with empathy and understanding.
Here are five important things to bear in mind when navigating financial differences between you and your friends, which should, if done correctly, stop money from ruining your friendship.
1. Be empathetic and avoid assumptions
Rather than making assumptions about your friends' financial situations, be empathetic and open-minded when talking to them about money.
Be sensitive to their circumstances and understand that wealth or income alone don’t define their worth. Remember, you’re probably friends with them for their character and shared interests, not their salary.
Instead of assuming someone won’t be able to afford a group holiday and not inviting them, involve them in the holiday-planning process from the start. How much would they be comfortable spending on a trip?
Try this: Take the initiative and start an open and honest conversation about money with a friend.
2. Choose inclusive activities
When planning social activities, make sure you accommodate various budgets and lifestyles. Choose outings and activities that don't revolve solely around spending a lot of money, which may exclude people.
Rather than only ever eating at high-end restaurants, propose lower-cost restaurants and eat at each others’ houses. Or suggest activities like picnics in the park, movie nights at home or free attractions like exhibitions and museums.
This means everyone can join and contribute in a way that aligns with their financial circumstances.
Try this: The next time you’re in charge of making plans with your friends, ask everyone individually what they’d like to do that fits within their budget. That way, everyone will feel comfortable sharing their true preferences, without being influenced by others.
3. Be mindful of how you speak about money
Be intentional about the language and topics you discuss with friends in different financial situations, especially if they revolve around material things, spending, budgeting and saving.
These topics may inadvertently make some friends feel excluded or uncomfortable. Aim to create a judgement-free environment where everyone feels included and valued.
Try this: The next time the conversation turns to expensive purchases or pricey trips, steer it towards shared hobbies, personal achievements or aspirations that resonate with everyone – regardless of their financial situation.
4. Use Monzo to smooth out the differences
Tools like Monzo can make it easier and less awkward to navigate people’s different financial situations. “We constantly use it to split bills. I'm usually the friend who pays and then I split with everyone after the fact,” says Rob*, 27, a software test engineer from Manchester on £53k a year, who spoke to us recently about the money gap between him and his friends.
“We're all on Monzo so it's very easy to do and when we have guests who aren't, monzo.me links make it super simple to use. I've never been paid back faster,” says Rob.
For example, if someone can’t split the bill evenly and can only afford to pay for what they ordered, you can adjust the amount they owe with Monzo. Rob says: “I can enact that and charge them less and no one else is aware. Because some people struggle to be open about their financial hardships, or they can't afford things, Monzo lets them facilitate that without having to talk to the whole group.”
Pots can also be helpful if you need somewhere to save money for socialising. We also spoke to Maya*, 33, from Lancaster, who works in the charity sector and earns £32k a year, around £10k less than her close friends. One of her Pots is purely for “fun spends” and “when it’s getting low I restrict what I can do socially, but it helps me keep track of what I’m doing,” she says.
Try this: Explore Pots and other Monzo features that can make it easier to handle money in group situations, like Shared Tabs, bill splitting and payment requests.
To apply for a Monzo bank account and access Pots you must be a UK resident. Ts&Cs apply.
5. Support each other's goals
Mutual support and encouragement are key pillars of a friendship. Make an effort to celebrate each other's accomplishments, whether that’s a career milestone, some happy personal news or a financial achievement.
Creating a supportive environment can prevent envy or resentment from taking root and instead inspire each other to reach new heights.
Try this: The next time a friend meets a financial goal, like paying off debt or starting a side business, show genuine enthusiasm and congratulate them. Similarly, when you reach a personal goal, celebrate with friends and highlight the hard work that got you there.
Navigating income and wealth disparities within friendships requires empathy, understanding and a willingness to look beyond material differences. Remember why you became friends in the first place – it probably wasn’t because of their income or bank balance.
Why not share this guide with someone you frequently talk about money with to get the conversation started?
*We’ve changed their names.
To apply for a Monzo current account you must be a UK resident. Ts&Cs apply.