How to talk to your mates about money, minus awkwardness

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If there are two things I love in this world, it’s spending time with friends, and saving money. Preferably, I like doing both of these things at the same time, but with the ever-rising cost of living it’s becoming increasingly difficult. For example, I paid $18 for a pint last weekend, basically the cost of a house deposit. Ridiculous.

Talking to your mates about money can be difficult, but there are some ways to make it easier.Credit: Nathan Perri

From what I can gather, I’m not the only one wrestling with this conundrum. As the price of our bills, mortgages and groceries rises, it’s becoming harder and harder to justify expensive activities and nights out with our friends and families.

What’s the problem?

A survey of consumer spending habits by research firm GWI earlier this year found 49 per cent of Australians said they’d been cutting back their spending on socialising, a figure 10 per cent higher than the rest of the world, and other similar surveys have delivered the same results.

It’s not surprising, as discretionary spending (like that extra glass of wine) is one of the first things to get cut when we start cracking down on our budgets, but it is sad. And it can be made even more difficult when your mates who may not be struggling quite as much with the cost of living keep inviting you to bougie events.

What you can do about it

We’re all inherently reluctant to talk about money with our friends and family, and even moreso to admit we might be struggling. But broaching these topics is important for both us and our wallet’s wellbeing. Here are some ways to get started:

• Set some boundaries: Paridhi Jain, founder of financial education company Skilledsmart, says it’s important to set boundaries around your expenses when you’re out with friends. She suggests the awkwardness we feel about cutting down on our spending can be self-created, and can feel worse in our heads. Jain suggests starting small: “Practise saying, ‘I’m okay thanks, I don’t want a drink with my meal’ if you’re out at a restaurant with friends, or don’t buy popcorn and drinks if you’re going to a movie,” she says. “Most of the time, you’ll also notice that no one actually cares, no one says anything. The fear, anxiety, awkwardness and embarrassment is often our own internal voice.”

• Lie/why/sigh: If you’re not quite feeling comfortable enough to start setting boundaries, financial counsellor Victoria Shakeshaft suggests a system she calls “lie, why, sigh”. Firstly, it’s okay to come up with a fictitious excuse about why you might not be able to do an expensive event, she says. This could be saying “I can’t make dinner but I’ll come meet you all for dessert or a drink”. If you’re not comfortable doing that, she suggests finding a “why” − a reason you might not be able to attend a certain event. This could be something like saying you’re saving for a trip, or you’ve got a friend’s birthday coming up. Shakeshaft’s last suggestion is biting the bullet and saying things as they are, or the “sigh”, and just directly suggesting cheaper alternatives like a taco night at home rather than a ritzy dinner. “Times are tight right now and whichever method you take, it takes grit to have these conversations,” she says.

• Wait for the good times: Having these conversations is difficult, but it can be made worse if you have them during a stressful moment. Financial therapist Jane Monica-Jones recommends waiting for a relaxed, light-hearted moment to bring up the topic. “That means bringing up the possibility of doing low or no cost activities in general conversation, when things are light, rather than when we feel under pressure, such as in moments of stress when paying for our portion of an expensive meal,” she says.
• Consider others: Finally, if you’re on the other side of the equation, and you’re the friend suggesting regular hangs, Shakeshaft suggests a casual check in to see how they’re holding up, or being proactive and opting for a low-cost activity in the first place. “It can really help a struggling friend when someone takes the mental load off by asking the question first,” she says.

Advice given in this article is general in nature and is not intended to influence readers’ decisions about investing or financial products. They should always seek their own professional advice that takes into account their own personal circumstances before making any financial decisions.