Fi­nance – Friends with money

Be­ing an adult with a low-pay­ing job and try­ing to bud­get is hard. So what hap­pens when your friends are loaded?

True Love - - Contents - By GE­OR­GIA HUMPHREYS

Nav­i­gat­ing cer­tain so­cial sit­u­a­tions feels awk­ward when money is in­volved. Take, for ex­am­ple, an oc­ca­sion when ev­ery­one sug­gests you split the bill af­ter you’ve or­dered only a plate of chips and juice; or when you tell ev­ery­one in the What­sApp group that you can’t af­ford that trip to Mpumalanga. It’s un­com­fort­able, to say the least. You don’t want to be that friend who’s al­ways mak­ing money ex­cuses, but at the same time, you don’t have to suc­cumb to the pres­sure to keep up with friends who earn more than you.

Ac­cord­ing to the 2016 Money Habits & Con­fes­sions Sur­vey by LearnVest, only 22% of peo­ple sur­veyed say they’d turn to their friends first to dis­cuss a new fi­nan­cial res­o­lu­tion. We like to think that our friend­ships are strong enough to han­dle fi­nan­cial dif­fer­ences. But the truth is that money can make things awk­ward, es­pe­cially when one of you earns more than the other.


You may not want to tell friends how much you earn, and nei­ther do you want to be­grudge them ca­reer suc­cess. But, says Han­nah Maun­drell, the ed­i­tor of, it’s im­por­tant to be hon­est. “It can be re­ally tricky if your friends or fam­ily earn more than you. Ul­ti­mately, hon­esty is the best pol­icy to avoid put­ting your­self in any awk­ward sit­u­a­tions. If you can’t af­ford to take part in ex­pen­sive ac­tiv­i­ties you’ve been in­vited to, talk to them about your sit­u­a­tion, oth­er­wise they’ll never know.”

Tho­bile, 28, couldn’t af­ford to chip in with her friends for a birth­day gift for their mu­tual pal, so she told her friends about it. “The money I was asked to con­trib­ute was more than the amount I was plan­ning to spend. So I of­fered to use the money I had avail­able to buy a sep­a­rate gift in­stead. For­tu­nately, they un­der­stood.”

Fi­nan­cial plan­ner So­nia du Plessis ad­vises: “Friends don’t need to know what you earn, but there’s noth­ing wrong with be­ing open and telling them that you’re look­ing at your bud­get and will be cut­ting down on your en­ter­tain­ment ex­penses, un­til you’re back at that stage where you can af­ford to splurge more. Your friends should re­spect where you are in terms of your life stage and that we’re not all in the same ca­reers.”

An­other fi­nan­cial plan­ner, Bar­bara Mun­dell, agrees. “If you do come clean about your fi­nances, your true friends will re­main, whereas oth­ers may not stay. There’s no ben­e­fit in pre­tend­ing that you’re some­one you’re not. At some point, you won’t be able to af­ford the ‘pre­tend role’ and you’ll be stuck with a heap of debt.”

Londiwe, 32, a Joburg-based free­lance writer, shares a flat with her friend. She re­calls the time when in­come dif­fer­ences caused fric­tion in her friend­ship: “I had trou­ble keep­ing up with my bills the first few months of mov­ing in with her. My friend was pay­ing for most things in the house, which made things un­com­fort­able and made her al­most like the head of the house­hold. I had to ask per­mis­sion from her to bring some­one over.”

Du Plessis says: “You should never feel less im­por­tant based on what you earn. You should not have friends who judge you ac­cord­ing to the car you drive or the house you live in. If that’s the case, you’re mix­ing with the wrong crowd. You should never feel that you have to main­tain a cer­tain life­style to keep a cer­tain group of friends.”


Bor­row­ing money is all well and good now, but what about later? “You could end up in debt, which may make you feel re­sent­ful to­wards your mates,” says Maun­drell. “If your friends or fam­ily of­fer to lend you money so you can join them, think about whether you can re­ally af­ford it. If you can treat their gen­er­ous of­fer like a loan, then agree to a strict dead­line for the money to be paid back, write it out on pa­per and of­fer to pay interest if you can af­ford to.”

Psy­chother­a­pist Glyn Mor­ris gives an ex­am­ple of how he helps his clients work out what it is about their earn­ings that both­ers them. “Let’s say you earn R14 000 per month and your friend earns R20 000, ask your­self: ‘What mean­ing do I at­tach to that?’ What makes things worse is the mean­ing you think the other person is go­ing to at­tach to it.

“This has a huge im­pact on self­es­teem. If our self-es­teem is rocky,

then we’re much more prone to de­pres­sion, anx­i­ety and stress. We dis­qual­ify the other ar­eas where we may be do­ing well – our in­tel­lect, our wis­dom, our gen­eros­ity. That builds into worse thoughts, where we mag­nify the achieve­ments of oth­ers while min­imis­ing our own. When we’re mak­ing these think­ing er­rors, we’re just fu­elling the emo­tions that don’t serve us very well.”

Mun­dell sug­gests think­ing of al­ter­na­tive plans when you can’t af­ford what’s been sug­gested. “Tell your friends that you won’t par­tic­i­pate in ex­pen­sive din­ners at five-star restau­rants or go to the cin­ema three times a week, but will rather host a movie night at your home. You can also look for cost-ef­fec­tive ways to have fun. Pic­nics are pop­u­lar and so much fun.”

Laura Adams, au­thor of Money Girl’s Smart Moves to Grow Rich, agrees. “The big­gest fi­nan­cial mis­take you can make with friends who have more money than you is to avoid be­ing hon­est about the types of ac­tiv­i­ties you pre­fer do­ing, and end up feel­ing un­com­fort­able or pres­sured to over­spend.”

So, think out of the box and have fun the re­spon­si­ble way.


The Old Mu­tual Sav­ings and In­vest­ment Mon­i­tor Sur­vey, pub­lished in July 2014, states that only 65% of in­come is spent on con­sum­ables and liv­ing ex­penses. Of those in­ter­viewed in the sur­vey, 38% said they were sav­ing less than they had in 2013. Four years later, peo­ple say the same thing. This means we’re spend­ing more than we’re sav­ing. One of the best ways to man­age fi­nances is to bud­get.

But stick­ing to a bud­get can be a chal­lenge when your friends con­tinue to spend on restau­rants and hol­i­days, says Za­mandlovu, 36, a Dur­ban-based teacher and a sin­gle mother of two. “I have friends with high-pay­ing jobs and they al­ways sug­gest that we go to ex­pen­sive places. I draw up a bud­get ev­ery month, but end up spend­ing more than ex­pected.”

Mun­dell says there’s no easy way to man­age your fi­nances; it takes dis­ci­pline. “Cover your es­sen­tial items first, and al­low your­self funds for en­ter­tain­ment. If pos­si­ble, trans­fer this amount into a sep­a­rate ac­count and be dis­ci­plined enough not to use other funds. If it’s too hard to main­tain this level of dis­ci­pline, find a fi­nan­cial ad­vi­sor to help you.”

Maun­drell ad­vises: “Be grate­ful. We’ve all been jeal­ous of some­one else’s in­cred­i­ble life, but it won’t get you any­where. Com­mu­ni­ca­tion is key, as is be­ing happy with what you have. You prob­a­bly have more than you’ll ever need to feel con­tent, and true friends will love you re­gard­less of cash flow.”

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