On becoming the “responsible friend”: how to set money boundaries in friendships

When you start to get a handle on your finances, it’s common to experience some growing pains in your friendships. Many of my clients find that as their relationship with money changes, they notice how their social circle has historically influenced their spending. This might look like a skeptical reaction when you order a tonic and lime instead of an $18 cocktail, or pressure to go to events that aren’t in your plan for the month. The change can create friction in relationships, depending on how you navigate it. Thankfully, there are strategies you can use to facilitate an easier conversation.

When you set boundaries with a friend around money, I recommend being kind, direct, and concise. You don’t have to explain your reasoning - in fact, explaining could imply that you’re open to changing your mind. For example, compare the two conversations below:

Josie

Steven: There’s an amazing concert happening this weekend. Tickets are only $120 each, are you in?

Josie: Oh, I’d love to. But my student loan payment is coming up, plus my paycheck was light this week because of the holiday, so I’m not sure I can make it work.

Steven: Don’t worry about that, you can make it up on your next check! Student loans are a joke anyway, no one knows what’s going on with that. They’ll probably be forgiven within the year.

Josie: Well, I guess it’s not a big deal….

Concert ticket: $120

Taxes and fees: $30

Drinks at the show: $20

Uber home: $30

Elena

Steven: There’s an amazing concert happening this weekend. Tickets are only $120 each, are you in?

Elena: That sounds fun, but I’m watching my spending. I’d love to get happy hour this week though.

Steven: Oh, okay. We could try the new place in Fremont on Thursday?

Elena: Great, let’s do it.

Two happy hour cocktails: $28

Tax & tip: $9

Bus fare: $3

Josie waffled on the concert and ended up going, spending $200 between her ticket, drinks and an Uber. Elena spent $40 at happy hour, and still got to spend time with her friend. She didn’t try to convince Steven that her goals were valid, or explain why she was saving money. She simply set a boundary and offered a cheaper alternative. By being honest without over-justifying, she respected the friendship while staying on track with her goals. And she got to enjoy her cocktail without a drop of student loan anxiety. Cheers, Elena!