How to Watch Your Wallet With High-Rolling Friends

I received an e-mail from a 28-year old budget-conscious reader with a common conundrum. She’s watching her wallet. Her friends? Not so much. How do you deal with friends that perennially spend, splurge, and squander?

Unfortunately, “keeping up with the Jones’” plays a big role in the psychology of spending. We spend to keep up because we envy things other people have. We spend more with friends to win and maintain their acceptance. And when we do it, we usually spend more than we have.

When we assert our frugality before our desire to fit in, however, a new problem emerges: We risk offending our friends, standing out as a cheapskate, or—worse—becoming alienated from them.

Seeing Both Sides

I’ve been on both sides. Before my “financial awakening“, I was the guy rallying my friends to hit the hottest restaurants, throw lavish parties, even jet to Vegas for the weekend. But my frugal friends had no problem telling me “I’m not paying for that!” Others came along, but tempers spiked when it came time to split the tab. (It’s easiest to split, but what happens to the guy that just got water and a salad? Separate checks, please!)

More recently I’ve been the one declining plans (or carefully budgeting for them). Fortunately, most of my friends are cheap and/or broke too, so finding affordable entertainment isn’t as much of a problem.

Just Be Honest

The next time your friends want to grab $200-a-bottle table service at a club, use honesty to squelch their complaints at your reaction. Saying something like:

“As you know, I’m trying to be smart with my money and put some away. I’m not sure blowing a couple hundred bucks here is gonna help that. Do we really want to spend our money this way? Can we do something cheaper?”

Unless your friends are legitimately loaded, chances are they are almost as uncomfortable spending that much money, too. They may just be afraid to question it for fear of standing out.

So yes, it does take courage to call out your friends‘ overspending. But the more you do it, the more comfortable your group will get with talking about money and choosing affordable activities.

What Not to Do

Only excuse yourself from plans as a last resort. If you can’t get your friends to turn down that costly club, make a polite excuse and head home. (Avoid going with as paying the check may cause some controversy even if you don‘t drink or eat as much).

If you do have to turn down one or more events because of your budget, try planning another less-costly get-together shortly thereafter so your friends know that you haven’t been bailing on them, just their expensive affairs.

What about you? Have you had to deal with friends that spend way more than you? How have you handled it? Were you able to remain friends despite your fiscal differences?

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