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Rich in Spirit: When Your Friends Have Money but You Don’t


(Photo: iStockphoto)

My fiancé and I have one set of “couple” friends who are a lot like us in many ways. We’re all around the same age, and we’re all products of similar schools and universities. We live just a few blocks away from each other in San Francisco, and we’re all interested in travel, food, music, and nightlife. 

There’s one major way, though, in which we differ. Our friends are rich, and we’re not. We rent an apartment in a shabby turn-of-the-twentieth-century building, while they own a spacious new condo. They think nothing of dropping $250 on a weekend dinner, while we stick mainly to tacos and Chinese food. We may live in the same city as our friends, but we occupy completely different worlds. 

The Money Melting Pot

There’s nothing that can come between friends as easily as money can, and in the past few decades, growing income disparities and greater social mobility have begun to make money an increasingly contentious issue in more and more friendships. 

A generation or two ago, people were friends with those they’d grown up or attended school with, or people from their workplace or neighborhood, and every group was composed of people at roughly the same socioeconomic level. Wealthy patrician families sent their children to Ivy League universities to become lawyers and doctors, while the children of blue-collar families learned a trade and remained in the lower middle class. Nowadays, a plumber’s son can go to Yale just as easily as the son of a congressman can, leading to peer groups that blur class and socioeconomic lines. 

The economic realities of career decisions can also have a serious effect on friendship; friends who started off together at the same economic level suddenly develop tension once one is a lawyer and the other is a teacher. My fiancé and I work in creative industries, while our wealthy friends became white-collar professionals. These divergent paths become more complicated by the fact that incomes themselves have diverged, too. According to data compiled by the New York Times, the starting salary for a university professor in 1985 was about $24,500, while a first-year associate at a large law firm earned about $53,000. Even though that disparity may seem large, it’s nothing when compared with the gap between today’s salaries: now, that university instructor would start out earning $35,300, and the lawyer would earn $170,000, plus a bonus.

Growth in white-collar professions like banking, consulting, management, and law have led to a generation in which some people earn supersized salaries while their peers who are teachers, nurses, graphic designers, editors, and academics still have low wages. 

Some economic research has shown that being surrounded by wealth can have detrimental effects on a person’s health and happiness. A 2005 study at Penn State University found that people were unhappiest when they were living in proximity to wealth. People of modest means who lived in modest communities were happy, but people with the same income who lived in areas where they were surrounded by richer people were markedly less so. When people develop their sense of self-worth relative to their friends or neighbors, that tendency can hurt their self-image and lead them to spend more to try to fit in and assuage their insecurity. 

It’s difficult not to feel jealous about what other people have, and it becomes very tempting to live beyond your means to replicate the lifestyle your neighbors are living. When more well-off friends suggest a pricey dinner or a day of shopping, it’s hard not to indulge, in an attempt to fit in and grasp a little bit of the luxurious life for yourself. But most of these purchases end up on credit cards, and years of extravagant spending can spell financial ruin. 

Letting Go of the Joneses

If you feel surrounded by friends who earn more money than you do, there are easy ways to mitigate their influence over your own finances and rein in your spending: 

* Be Up-front and Set Boundaries

Whether you’re just generally short on cash or you’re saving up for a big purchase, don’t be afraid to let your friends know. Many people who can’t control their spending also have a hard time saying no, so it’s important to be able to set a limit and stick to it. If a splurgey dinner just isn’t in your budget, suggest something more moderately priced. If you’re honest about your financial situation, your friends should stop pressuring you to live beyond your means.

* Keep It in Perspective

If your friends treat you to a lavish dinner at their house, there’s no need to reciprocate by buying caviar and truffles the next time you host. Avoid getting caught in a game of tit-for-tat or trying to keep score. The kindness is in the gesture itself, not in whether you served haute cuisine or hamburgers.

* Accept Generosity Graciously

Believe it or not, it can be uncomfortable to be the friends with money, too. Many well-off people struggle constantly with trying not to flaunt their success. If a friend offers to treat you to dinner or pay your way for an outing, she’s showing you that your friendship is worth more to her than a few dollars. Many people get uncomfortable if a friend offers to pick up the check, but if she does, it’s best to thank her and move on. No need to feel indebted for the occasional treat.

* If All Else Fails, Get New Friends

Your mom was right—anyone who pressures you to overextend yourself isn’t a real friend. If people know your budgetary limitations but don’t ease up on the pressure to spend, you may have to consider limiting your time with them. Those who care will work with you to do fun activities that won’t break the bank. 

Having well-to-do friends forces us to confront our own feelings about money—how much we have and how much we want. If you find yourself getting envious about a friend’s new purse or luxurious vacation, use the feelings of jealousy to get in touch with your goals for yourself. Perhaps they could give you the courage to consider a career move or to ask for a raise. Instead of resenting your friends or their success, try to think more clearly about your own financial and professional aspirations. 

The best reason not to get too caught up in wealthy friends’ lifestyles is that you never know what goes on behind closed doors. Perhaps they’re the ones living extravagantly, building up credit card debt they’ll never pay off—and having money isn’t a reliable predictor of a better marriage, more well-adjusted children, or any of the intangible things that people value.

My fiancé and I might have to make do with tacos and Chinese food, but that’s okay, because we like tacos and Chinese food. Having money may mean being able to own a bigger house or drive a faster car, but there’s one thing it can’t buy—happiness.

Rich in Spirit: When Your Friends Have Money but You Don’t was provided by

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