Should you pay more than your friends that make less than you?
Should you pay more than your friends that make less than you?
A discussion on income inequality between friends
First things first—do you know how much money your friends make? Even if you don’t, you’ve probably noticed a difference in how much you each spend. I know I have.
I first noticed that difference in middle school. This was, of course, long before any of us had salaried jobs. Most of my friends made no money at all, and some of us made money from babysitting or an allowance (Sometimes in exchange for doing chores. Sometimes just because).
When we went out in middle and high school, as we started to get jobs and more responsibility (and freedom), we paid for everything separately. I don’t remember regularly treating friends or being treated, with the exception of a planned birthday dinner or event, which was often paid for by the birthday girl’s parents. And more excursions we had outside of that were relatively inexpensive—we were kids, after all. Some, however, were more expensive than others, and those more expensive events were with friends who made more money or got more money from their parents.
It wasn’t until post college, living in New York City, that I started regularly turning down plans (or offering a less expensive alternative). I am now at a stage in my life where I have friends (and friends of friends, and coworkers, and Hinge dates) that make and have quite a bit more or less money than I do.
With most of my friends, I don’t know exactly how much they make, but I have a general idea, and that ranges from friends who are currently unemployed to friends who make around $60,000/year to friends that make more than I’ve ever made, $200,000+/year.
When I got laid off from my full time job earlier this year, I was incredibly grateful towards friends and family who covered a drink or dinner when out. Honestly, it wasn’t even about the cost (I knew I could afford it, as I was going fully expecting to pay), but the gesture. It’s not about how expensive a gift is, but how thoughtful it is, for me to feel a stronger bond with the person who got me the gift. Some thoughtful gifts I received in the past year that were inexpensive but make my heart warm when I see them/use them/think of them: a canvas pouch my friend got me from Greece with cats on it, a sheet of self care stickers, a notecard with a letter in it I keep in a keepsake box.
And yes, intentional gifts are great, and can be inexpensive, but that still leaves the question—if you make twice as much money as your friend, should you be footing the bill more often?
It’s tricky parameters because everyone has a different financial status outside of their salary (savings, expenses, family or partner support, etc.), so let’s just say, all other net worth equal, and your friend still makes twice as much. Or, maybe it’s harder to answer if you’re the one who makes twice as much as your friend.
Yes, it feels good to be treated, to receive gifts, and to treat others and give gifts. I am definitely more likely to cover the bill when I’m out with a friend going through a tough time—financially or otherwise. Or not even just a tough time, but a phase in life where they’re making less money—I’ve grabbed the bill more often when my friends were still in school, but I was making a full time salary. But no, I don’t think there’s any obligation to cover the bill more if you make more money.
Have you ever had the feeling that you can’t afford certain friendships? Friends who only ever want to go out and do expensive things (and split expensive bills)? I have, and there’s three ways forward from friendships like that: 1) make (or spend) more money to keep up, 2) convince your friends to do less expensive activities, or 3) leave those friends. #1 can be difficult to control and #3 is the worst case scenario, so that leaves #2.
It can feel awkward or embarrassing to say “that’s too expensive for me,” but I’ve done it. I prefer to frame it in a way that’s more values based—and ultimately, true—“the cost of that isn’t really worth it to me. Can we do something else instead?” Because, sure, I could spend $150 on a ticket to see the Rangers play hockey, but I don’t even watch hockey on TV and don’t have any interest in it, and would much rather spend that money on a concert ticket (or next week’s groceries). It’s okay to suggest a less expensive—or more interest-aligned—activity.
And this should be normalized from the other side, too. A friendship doesn’t need to be saying yes to every activity the other person wants to do, and if your friend suggests an alternative, it’s not a personal dig. If you really want to do that activity that’s out of budget, you can offer to pay for all, but there’s no obligation—and some people might specifically not want someone else to pay for them (I’ve been there—it can feel weird and transactional).
On that note, it’s crazy to be expected to pay more towards something if you make more money. This happened recently to a friend who was invited to an expensive bachelorette trip with the note that she would be able to pay less because some other attendees would pay more that made more money—she declined the invite.
I don’t see much of a correlation between my friends’ salaries and how generous they are with me. I think part of that is that in New York, a $200,000+ salary gets chipped away pretty easily with lifestyle creep, when all the sudden you’re upgraded to an elevator doorman building in a fancy neighborhood—you might still end up with the same disposable income. And part of that is that my friends who are more generous, are just more generous in their nature. And my friends who want to split everything equally have always been that way.
One thing for sure is true: being honest with each other about what we can afford—and think is worth the expense—has made our friendships stronger.
Thanks for reading! I post weekly about personal finance and lifestyle in NYC. I also post a monthly reset on the 1st of each month sharing everything I spent money on the previous month and goals for the next month.
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Two of my dearest, closest friends have vastly more disposable money than I have (like what to me is 10K is $100 to one friend, and maybe a penny to the other). We’ve fallen into a rhythm that I think is good with everyone, where we all contribute but according to where we are in that tier. We don’t get a chance to see each other together that often, so when we do it’s usually an event. So while person one might cover massages and tip for everyone, person two would cover our lunch at a really nice restaurant, and I’d cover tip and offer to pick up coffee or pastries or whatever as well. And while the price of that tip and pastries might seem insignificant percentage-wise, they understand that it’s actually something that impacts my budget, which isn’t the case for either of them. Of course they could pick up my share too, but it feels better this way and I put aside disposable income for these treasured occasions.
Having honest discussions about not only where they are financially but also what they value says more about what they will spend. For example my best friend and I travel the world together. He makes a good salary and I do well too, but we value very different things. I love nice hotels and flying first class, he would never spend the money on that. We both love unique experiences and while we like good food, we both are more “food is fuel” people and spending $400 on dinner is something we would never do because we just don’t care about food that much. But spend $400 to have an interview with a Giesha In Kyoto? Every day and twice on Sunday. So what we did on a recent trip to Key West is he paid of for the food and I paid for the hotel and experiences. If the experience was a considered purchase we split it. Or on one trip we agreed to each have 2 chips. He got two downgrade chips meaning he could use the chip to have a more budget focused experience and I had two upgrade chips to upgrade the experience. And you could not cancel each other’s chip. I think knowing what your friends value is just as important as to what they can afford. We justify spending based on what we value. Good topic Maria!