• Keeping Friends

Friendship and Money: Minimizing Losses

Published: March 3, 2009 | Last Updated: October 5, 2020 By | 6 Replies Continue Reading
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Given the uncertainties of the global economy and the high rates of unemployment, money seems to be on everyone’s minds these days. This is the second part of a two-part interview on Friendship and Money with MSN Money columnist Emma Johnson. Part I of this interview can be found here: She’s Fired, You’re Not.

On friendship and money, how do economic inequities between friends affect relationships?

In a perfect world, money wouldn’t affect friendships. But there are a few things going on here. For one, in our culture we measure success in terms of professional accomplishments and money, and we often judge ourselves by these sticks. So when one friend gets ahead financially, another might start feeling left behind and less successful all around.

The other thing that happens is that money often has a big impact on our lifestyles. When one friend starts making big bucks, she might move to a tonier zip code, start worrying about private schools for their kids, and spend weekends researching a second home to buy. This is her new life. The friend from way-back-when can’t identify with these new concerns, and vice versa. These are not trivial differences and can create big rifts in how people relate.

There are practical considerations, too, depending on the relationship. If a pair of friends is in the habit of spending money together – be it dinners out, shopping or vacationing – that can all come to a grinding halt once one party can no longer afford it. Worse, the unemployed woman may feel the need to now live beyond her means just to keep that much-needed friendship alive.

Should women talk openly with each other about their financial woes or those of their partners? Why?

I believe we all need someone to talk to about the important things in our lives. We’ve been raised to believe that talking about money is impolite, but it is such an important part of our lives – and often our worries – that the practice of bottling up all our money woes might just be at the root our country’s lousy financial habits.

Blabbing about the nitty-gritty of your income, credit card statements, taxes and inheritances is probably not a great idea most of the time, but there are no holds barred when you have a really truly great friend who will not judge you, will give you some tough love when needed and, most importantly, listen. On the other hand, if you’re tickled because your husband got a raise, your great aunt died and left you a chunk of change and you found a wad of cash in your attic, remember: no one likes a braggart.

Are there circumstances when you should lend a girlfriend money to keep her afloat? What are the perils? What safeguards would help preserve the friendship?

Lending money to a friend or relative is always a tough situation, and can be a real stressor in the relationship. Whenever you get together, the money will be on everyone’s mind, but no one will talk about it. And there is no better way to create resentment than to have an unpaid debt between parties.

If you do decide to lend money, write up a contract signed by both friends, and have it include terms of the loan, repayment dates, interest, etc. But lending money should be a business decision, not an emotional one, and that is tricky between friends. Ask yourself:

  • What is this person’s financial history?
  • What is the likelihood they will be gainfully employed soon?
  • Is the loan for a true emergency or basic living expenses, or something frivolous?
  • And perhaps most important, Will this loan put my own finances in peril?

In an article I wrote for Psychology Today about friendship and money, I profiled a woman who made all her own money and had a very modest existence, one she shared with a girlfriend who later came into a significant inheritance. The newly rich friend felt guilty about it and insisted on treating her friend to meals out, vacations and trips to the mall – which the working woman resented very much. They were able to talk it though, but that financial inequality proved to be a big deal.


Emma Johnson is a New York journalist who writes about business, finance and money topics for publications including the New York Times, Wall Street Journal, Entrepreneur and Psychology Today. Her series on MSN Money, “Jump Start Your Life,” explores money topics for people in their 20s and 30s.

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Category: KEEPING FRIENDS

Comments (6)

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  1. LaTrice says:

    I remember losing my job three years ago, and it was one of the most humiliating times of my life. I had to keep reminding myself that my situation was only temporary, so I had to remain optimistic. Since the bills weren’t going to stop, I had to file for unemployment, and have a little bit of income until I was able to get back on my feet.

    When my best friend came into town, I didn’t want to hang out with her, due to my situation at the time. She told me that I shouldn’t be embarrassed, and that I was going to find a job soon. She still wanted to see me. I’ll have to admit that it was a challenge to place my pride on the sidelines, but at least I had a good time. Best of all, she encouraged me to have her as a reference, and to keep her posted with my job searches.

  2. Anonymous says:

    When people don’t have a job, have been unemployed for a long time, have huge medical bills, are facing losing their home, etc., trust me, they aren’t really spending their energy simply being “jealous” of you and your husband’s nice lifestyle. They are worried sick about how they are going to survive. I doubt they have a lot of people wanting to be their friend, either. So how about having a little compassion for their situation rather than criticizing them for being “jealous” of you?

  3. Anonymous says:

    I’m glad this blog entry resurfaced again. The fiscal problems are still with many, many people. Yet as time goes by, the sympathy and compassion for these people seems nonexistent.

  4. Anonymous says:

    I am in the same boat. My husband is also a physician, I am a recent immigrant, and I have found only a handful of friends in the 20 years I have lived here who can be counted as true friends. Many people are superficial and they will befriend you if they find a use for you, otherwise, they move on. Many so called “friends” have asked me to help them pay for their food, rent, gas, help them get a job etc. Some of them who never gave me the time of day when things were going well, suddenly want to be my best friend when they get divorced or are in financial trouble. I do try to help people who are really in need whenever I can, however, I have learned to say no, with grace and dignity, to those who I feel are just there for my money. However, there are diamonds out there. I have found a few good friends whom I cherish. You just have to keep looking. Good luck !

  5. Anonymous says:

    I never could make true friends over these 10 years I am in this country. My husband is a physician and this is one of the reasons as you can assume due to his income. Nonetheless, I am as down to earth as it can be and as nice as I can but as soon as people see where we live or find out what he does for a living, + my foreign background – a wall falls down between us.

    I understand how it can feel for people; but be reasonable, folks! My husband is still paying for his schooling in college and medical school; he works long hours, not just 9-5!!!! His personal and emotional responsibilities do not compare to a those of a salesman or someone who has a 9-5 job and expects much more in pay. Does one of them feel for any of people he met and sold things as much as a doctor does feeling all the physical pain/legal /moral responsibility? Most people see is the “green-greener(?)” grass over the fence.
    I am so sorry for these people’s envy. Don’t tell me otherwise, I’ve been in your shoes but (thanks to Buddism and just common sense – envy eats you up, people!!!) I learnt to deal with life’s deliverance with grace and in fact that’s how I’ve learned to deal with attachment to things/materialism/detachment from it. Look into it; it is very helpful if you dedicate yourself to the matter. Is not there something about it in Catholizism? Or any other religion you practice?

    This is also only due to the fact that americans are super religious comparing to the Europeans – what happened? Those guys are having all the fun in life.

    Just don’t bring the subject of guns, otherwise I am all in meditation!

  6. Anonymous says:

    Just coming out of a friendship where my former friend’s husband was making significantly less financially than my husband, I can definitely say that large income differences can make a friendship very uncomfortable. I am guilty of being similar to the lady in the article who wanted to treat her friend all of the time and pay for everything. I didn’t understand that this may have seemed like condescending behavior. This probably bothered my former friend, but she never said anything. But on the other hand, I have another friend who is also struggling and she feels like she is entitled to ask me for help. It’s sometimes hard to know what’s offensive and what’s considered helpful. I am thankful for the friends I have that don’t care about financial differences. They are true friends.

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