What to Do When Money Is Impacting Your Friendships

During my college orientation tour, my guide asked what dorm I’d be staying in. “Hart Hall,” I said. It was the cheapest option available on campus, at an already expensive school, and I needed to save every penny of my scholarship money to afford books, groceries, and supplies.

With a look on her face like she’d just sucked on a lemon, the guide blurted out, “Hart Hall? That’s where all the poor kids stay.” My face went hot as the blood rushed to my cheeks — out of embarrassment, anger, both. I couldn’t stop staring at my shoes. “Thanks,” I said, quietly. “I guess I’m one of the poor kids.” We didn’t talk much for the rest of the tour.

It wasn’t the first time I’d been made acutely aware of how my financial reality created almost unbridgeable between myself and the people around me. I had always been a kid from a low-income household, where my first-gen immigrant parents cleaned houses to support myself and my siblings. I’m certainly not the only one.

“I don’t think people realize how truly traumatizing poverty is,” said Jessica Senquiz, a.k.a. SpottieottieJess, in a recent TikTok post. When she filled out her financial aid forms for her freshman year of college, her family's $18,000 annual income was hardly enough to support a four-person household. “I cried every day because I didn’t have health insurance, and my roommate had Gucci flip-flops to take showers in the communal [bathrooms],” she said.

You don’t need to be living at the poverty line to know that the wealth gap in the United States is bad. (A few illustrative stats: as of 2022, the top 1% hold 18.4 percent of the wealth, while the bottom 50% hold just two percent*; the median income for white households as of 2019 was $188,200, but it’s $36,100 for Hispanic households and $24,100 for Black households**). Not surprisingly, it’s getting worse. And you don’t need to be a college freshman to witness, and feel, what happens when friends and peers live in different financial realities. It can lurk around the corner of night out, every destination wedding, every one of those group birthday dinners where the bill shows up and things get awkward.

Navigating these tough situations can be uncomfortable, but here’s a few pieces of advice to help, no matter which side of the money divide you’re on.

Have the money talk

Talking about money — with friends, your partner, your parents, whomever — is never not weird…at first. But it’s 2020-whatever, and we’re out here breaking boomer taboos. According to Sandi Bragar, chief client officer at Aspiriant, kicking down the mental door labeled “Don’t Talk About Money” opens you up to stronger relationships. “When talking about money, especially with friends, we can share and unpack the lessons we’ve learned directly and indirectly about our money attitudes and behaviors, which play into our relationship with money,” Bragar told GO in an interview. “We can learn from each other’s experiences, which increases our confidence.”

Back yourself up with boundaries

It’s hard having the strength to skip the bachelorette in Old San Juan rather than just putting it on your credit card. It’s equally hard speaking up and standing your ground when it comes to the people you love. But not only will the second option keep you from putting yourself in a bad position, it’s a chance to prove to yourself that you can prioritize what’s important for you. As financial therapist Lindsay Bryan-Povdin advises in this Self piece, “Honoring your financial reality and being honest with your friends is an act of self-care, and that’s worth celebrating.” What you’ll lose in beachy thirst traps you’ll gain in knowing your own strength (and not curling up in fetal position when your monthly bill shows up).

On the other side, try to equalize the situation

Money privilege is very real (too real, tbh), and you don’t have to be vacation-home-and-money-manager wealthy to be on the “advantaged” side of a friendship. If you’re there, try to be self-aware about the ways your relationship to money might not sync up with theirs. Maybe don’t suggest the restaurant that's tasting-menu-only. Consider dialing down the cost on the Airbnb for ladies' weekend. Perhaps you forget to send that next-morning Venmo request after you picked up the cocktail bill. (It’s worth pointing out: there’s a real line between subtle graciousness and flaunting — no one wants to feel like charity case drafting off their more well-heeled friends.) The strongest move toward equality when it comes to less financially secure friends is to stay alert to how they respond when you suggest ideas, and to give them the chance to speak up with an option that works for everyone.

*As of 2022, according to the Federal Reserve’s “Distribution of Financial Wealth”

**As of 2019, according to a 2020 Federal Reserve paper using data from its 2019 Survey of Consumer Finances