Are Salary Differences Putting A Strain On Your Friendships?

“It’s only $250 for one night! Isn’t that great?!” my friend exclaimed over our $24 cocktails. I smiled back, nodding enthusiastically. The truth was, my stomach had dropped when she'd mentioned the price.
$250 was all I’d earned that week as a freelance writer. $250 was meant to cover my expenses until a sporadic invoice payment would appear in my bank account. $250, for me, wasn’t great for a hotel stay at all. 
As we enter adulthood and progress in our careers, money seems to be a prickly conversation topic. Where once all of your friends were working minimum wage supermarket and fast-food jobs, now there can be a difference of tens of thousands in the amount you take home each month. 
With growing income inequality, the gig economy and simply a general lack of stability for millennials and Gen Zs, it’s no wonder that money differences can begin to take its toll on friendships.

Why is money so tied up with our self-worth?

In a capitalist society, it’s hard not to tie our ideas of success to the amount of cash sitting in our bank accounts. The messages we’re bombarded with every day tell us to want, buy and earn more. 
In a surprise to almost no one, a 2020 report found that basing your self-worth on financial success is associated with greater feelings of loneliness and social disconnection – meaning the more you focus on your money (or lack of it), the larger the rift it can create in your friendships.
This explains why, when your friend brags about a lavish holiday or buying a new place, feelings of low self-worth can arise. Capitalism has wormed its way into your psychology, making you feel less for not achieving what your peers have.

How can we deal with money disparity in friendships? 

From feelings of jealousy over a friends’ salary to guilt for that bonus you received, the intersection of friendship and money can be murky. One way to alleviate some of that money tension is transparency. Being honest about your money situation and any financial trauma you carry can be a good way for other friends to know where you stand.
In the same way that you wouldn’t rub your happy relationship in a recently dumped friend's face, be mindful of the ways you speak about money. A little empathy can go a long way in the still-taboo topic of how much people earn.
Has your friend hinted that they’re a bit strapped this month? Are they withdrawing from social events? Staying mindful of how your friends speak about money can help to alleviate money-versus-friendship tensions. 
Perhaps suggest some free activities rather than habitually going to expensive restaurants every week. Or choose a walk in the park with coffee over a $50 brunch. Finance apps like Money by Afterpay can help to keep you and your mates on track, so you know when you’ve blown your fun budget and need to pull back a bit.

Choose your friends wisely

While you shouldn’t select your friends based on the numbers in their bank account, if someone is making you feel bad, guilty or shameful over your money situation then maybe it’s time to assess whether that friendship is healthy anymore. Transparency and honesty between friends mean that conversations around money become less awkward and tense. 
Sadly, the system we exist in is a competitive game. While we’re automatically pitted against our peers in the rat race, being mindful of your close friends' money habits and goals is a way to ensure that 'The Man' doesn’t infiltrate your friendships as well.
Capitalism tells us that financial success comes before everything else, including family and friends. But if the pandemic has taught us anything, it’s that social connections will bring more positive mental health benefits than a designer handbag or a fancy restaurant dinner. So the next time an awkward money conversation comes up with a friend, I’m going to be honest. I think it's okay to just say, “I can’t afford that right now.”
Please note that this information is general in nature and shouldn't be construed as financial advice.

More from Work & Money