I Can't Afford My Friends. Now, What?

What happens when you can't afford your friends anymore? A trip to the movies, dinner at a restaurant, night out at the club—all these friends dates start to add up. You're maxing out your budget and your credit usage keeps increasing. Your hours are suddenly cut and money gets even tighter. Or your friends' spending power keeps increasing, while yours stays stagnant. Hanging out with friends is no longer fun or relaxing, but a point of stress and contention. You feel like the odd man or woman out—and you don’t know what to do about it.

“The uncomfortable and challenging elephant in the room is that money matters and financial disparities among friends can trigger a great deal of anxiety, guilt, self-doubt, and self-esteem issues,” explains Dr. Monica Vermani, a clinical psychologist at Balanced Wellbeing. 

But finances don't have to come in the way of your friendships. There are ways to maintain, strengthen, and deepen platonic connections, even without your wallet. Below, we explain how to keep your friends close when you can no longer afford their lifestyle.

Why You Feel Like You Can't Afford Your Friends Anymore

According to a recent survey, almost 30% of people reported feeling like they're not on equal financial footing with their friends. For some, this financial disparity is because of job loss. But it can stem from the birth of a child, a significant health challenge, an unexpected expenditure, or just overspending. Whatever the case, having financial difficulties can have consequences on your social relationships.

Buying a $5 latte or a $25 dinner can become more than your budget can handle. When everyone is at happy hour after work, you're making up excuses to join them. You're canceling weekend plans or birthday events and skipping the concert you’ve all been dying to see because tickets are too costly. Embarrassment, anxiety, and a host of other emotions can develop.

“Being unable to keep up with your friends can impact people very differently,” says Cohen Taylor, behavioral wealth specialist at Wealth Enhancement Group. “Some may withdraw from their social circle due to feelings of inadequacy or intense shame. Other people may feel a sense of jealousy or envy about the person with more financial capacity. Being unable to be present for the events that friends plan that you cannot afford can in some cases lead to feelings of depression or low self-worth.”

Anger, frustration, and anxiety are also common feelings you may have when you can’t take part in the same activities as your friends due to money. You can even begin to feel tinges of resentment, annoyance, or anger because you covet the more extravagant lifestyle your friends have. All of this can cause the dynamics of friendship to change over time—for better or worse.

“When financial dynamics change, both parties can feel an uncomfortable shift in the friendship,” says Dr. Vermani. “All of a sudden, money matters, and both parties rarely know how to deal with the sudden elephant in the room. At a loss as to how to navigate such dynamics, many friendships of this nature fall by the wayside.”

And the research backs this up too—21% of people have lost a friendship because of money, according to the recent survey.

Keeping Money from Ruining Friendships

Addressing the issue is the best place to start. Shame and pride can cause you to veer away from having honest conversations with your friends. (A 2021 survey from Insider even reported that people prefer talking about politics and relationships over money). But there are ways you can make that awkward money conversation much easier.

• Be honest. Talking about money is hard, but remember that it can also be a sensitive topic for your friends. “Speak to your friend with loving kindness, respect, and honesty,” Dr. Vermani advises. “Treat your friend as you would honestly wish to be treated were the circumstances reversed.” Let them know that you feel financially stressed and that you value them and their friendship but would appreciate it if you two can do less costly things together like taking a walk or having a potluck dinner.
• Talk openly about financial issues before it becomes awkward. Heading out to dinner with a friend? Look up the menu before and if it's beyond your budget, request a less expensive restaurant or ask if you could cook together at home. You can also communicate whether you prefer to split the check or pay separately. If your friend is adamant about the restaurant and doesn't want to go anywhere else, ask if they're open to covering you and you can treat them to a homecooked meal next time. The key is discussing your feelings and needs ahead of time instead of staying quiet and building resentment by financially straining yourself.
• Don’t blame or be judgmental. “This one works both ways!” says Dr. Vermani. “Don’t shame or blame a friend who cannot afford to take part in a costly event or occasion. If you cannot afford to participate in an event or outing a friend is excited about, resist the urge to shame them for indulging in what you might judge as over-indulgent or an unnecessary luxury.”
• Don’t bottle up your feelings. If attending your friend’s destination wedding or buying a ticket for their fundraiser is beyond your means, tell them. Talk openly and honestly about your budget and what you can and cannot do. Your friends won’t know until you tell them. Just as you want your feelings to be valued, theirs should be too.

Remember, in any friendship, there are two sides and a healthy relationship requires that each person be willing to openly communicate.

Navigating Your Friendships Going Forward

Put a plan in motion to move forward in your friendship. Setting your boundaries will help you navigate different situations and handle expectations in the friendship. That means allocating a set of money each month for fun activities, and when it’s gone, it’s gone. Or being open to accepting your friends’ generosity if they offer to pay for dinners or events. It could also mean accepting your friends’ help in other ways.

“Friends want to be supportive, and it is helpful to communicate how they can be of support to you,” Taylor says. “Remember that being a good friend doesn’t mean that they are supposed to solve your financial challenges for you, and expecting friends to do so is likely to put a strain on the relationship.”

Navigating the friendship may also mean finding activities that don’t break the bank. There are plenty of ways you can avoid the stress of spending while also enjoying your friend's company. Some ideas include:

• Playing board games
• Binge-watching your favorite movies or shows together
• A walk or bike ride in the park
• A game of frisbee or an outdoor picnic
• Volunteering at a local community event
• Cooking a dish or dessert together
• Going on a hike or a free outdoor yoga event and getting in some exercise in the process

While nurturing the friendship, make sure you’re taking care of yourself and your financial health in the process. If you were previously overspending, find free resources that will help you create a budget to manage your finances. Credit counselors can help you figure out how to consolidate debt and begin to live within your means. And if you feel like your relationship with money stems from past problems or family dynamics, a mental health professional can offer support and strategies to move forward.

“Money is emotional and therefore when it comes to discussing financial limitations, a great amount of empathy is needed,” Taylor says. “Financial limitations can produce a sense of shame and failure for some, and approaching conversations with sensitivity is important.”