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How To Prioritize Your Finances When It Comes To Your Friends

This post is sponsored by Lexington Law

title photo: How To Prioritize Your Finances When It Comes To Your Friends

We’ve all been in this situation before. A well-intentioned friend extends an attractive invitation to a new restaurant or concert or fitness class. It sounds like a good idea… and it would be a good idea… if only your bank account agreed. 

When it comes to our friends, there can be a lot of financial pressure to spend beyond our means. You might be financially okay with treating yourself to one or two adventures out every month but going every week or even multiple times per week can really add up and put financial strain on your budget. 

If you have some disposable income, you might be okay with that. But for many of us who are paying off debt, saving aggressively, and simply have other life priorities, it can be harder to justify. Remember that no one else has a right to dictate how you spend your money or set your priorities.  

Related: Adulting and Money – How To Prepare Your Finances For a Family 

Prioritizing your finances when it comes to your friends can be challenging. It’s hard to say no, especially when you really want to say yes. That said, it’s really important that you stay financially aware and conscious of your budget. At the end of the day, you are the one paying your bills. You’re responsible for your debt. You are responsible for your credit score. And you are the one responsible for your future — which means you should’t let anyone else compromise it. 

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Being mindful of your spending, debt, and credit is so important because it directly impacts your future financial freedom. 

Our credit scores impact everything from our ability to get hired, to buying a house or a car, to the interest rates we pay when we need to borrow money. The difference between an average and a high credit score can mean tens of thousands of dollars over the course of your lifetime. Why would you want to put yourself in the position of paying this money in interest when you could spend it on things that matter more to you?

If you’re in place where you feel like you need to improve your credit, I’ve written a thorough guide on how to start improving your credit in the next six months.

However, if you’re struggling with your credit or with unfair negative items on your credit report, I highly suggest reaching out to the credit repair consultants at Lexington Law. They will be able to help you identity potential issues and advocate on your behalf to help improve your credit. It’s a step worth taking because your credit score can heavily impact your financial future, both positively and negatively.

Click here to schedule your free consultation with Lexington Law. 

How To Prioritize Your Finances When It Comes To Your Friends

I’ve broken this down into three parts: setting expectations, navigating tricky financial conversations, and how to suggest alternatives. It’s important to remember that we’re all in different places financially and our priorities are different at any given time. If a friend says no or suggests an alternative, it’s necessary to respect that. 

Setting Expectations

If someone suggests something about “getting together” or “hanging out,” set your expectations early on!

Being mindful of your budget, say something like: “I’d love to have you over for wine and a movie!” or “How about we get together for happy hour next week?” 

If you’re comfortable talking about money, say something along the lines of: “I’m trying to be mindful of my spending right now, could we do happy hour or cook dinner together at my apartment?” 

When you open the lines of communication and set your expectations early on, you can help keep yourself (and probably your friend too) on track with your spending. 

You can have a good time with friends without spending any money. You can make plenty of memories that won’t cost you a dime.

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Quote: That "grow together" type of friendship

If someone else doesn’t agree or still wants to do a more expensive activity that’s out of your budget, suggest you get together at a later date. 

You can be upfront like we’ll cover next or suggest an alternative like I mention below. 

Navigating Tricky Financial Conversations

Sometimes it can feel sticky to talk about money with friends. We are all at different places in our financial journeys and are likely living in different circumstances.

And even if it looks like someone can “afford” something from the outside, it’s not our place to say how they should be spending their dollars.

For example, maybe they just bought a new phone but are saying no to dinner out with you. From your perspective, it might look like they have the cash to blow. But from their perspective — maybe they spent six months saving up for that phone. Judging someone by what they have and what they own isn’t a healthy thing to do.

One thing I always try to remember when talking to friends about money is that we don’t owe each other an explanation. We don’t have to spend money to spend time together. And the money we spend on our outings and where we go has nothing to do with the value of our friendship.

When you shift your perspective, you start to realize that the what and the how don’t matter as much as the who. Who we spend our time with is much more valuable than who we spend our money with. 

Phrases to use in tricky financial situations:

Even with that said, there can still be times when we want to try to explain ourselves succinctly. Here are a couple of phrases I suggest to try out:

  1. “I’m prioritizing my [debt, savings, etc] right now, can we do [alternative suggestion] instead?”
  2. “That’s out of my budget right now, do you have another idea?”
  3. “I can’t swing [first suggestion] right now, but how about [alternative suggestion]?”
  4. “I’m not that interested in [first suggestion], how do you feel about [alternative suggestion]?”
  5. “I don’t have the budget for that this week, but could do [alternative] next week if you’re open to it.”

The important thing is to set your boundaries and be honest. If you suggest an alternative, you’ll probably find that most people are totally down with that! 

How To Prioritize Your Finances When It Comes To Your Friends

How To Suggest Alternatives

Instead of waiting for someone else to suggest an activity, why not take the initiative in the first place? Look up free local events that are going on or take advantage of festivals.

I have friends who love going to museums on free days, picnic in local parks, or go hiking or biking. These activities are mostly free for them to do and they seem to have things going on all the time! Yet they’re still really mindful of their budgets on an everyday basis.

Here are a couple of ways to suggest alternative ideas:

  1. Be genuinely interested in what you’re suggesting: If you’re interested in something, chances are your friends will be too. A cool or unique event that’s offers something fun is good bet. 
  2. Emphasize the time you’re spending together: It’s not always about what you’re doing, but that you’re doing it together. Most of your friends are probably down for anything like going on a walk, to a farmer’s market or just making dinner together. Game nights are also a great idea!
  3. Pick lunch or happy hour instead: It’s fun to go out but doing so at a lower-cost time of day can help you both save money. Don’t even bring up the idea of dinner, instead just suggest lunch or happy hour. The same goes for movies or shows — the matinee version is usually cheaper! 
  4. Think of free versions of the paid event: If a friend is suggesting a concert, be confident in saying those tickets are out of your budget but you would love to do a listening party at your house or drive around and blast the album. Or suggest getting together after the show because you would love to hear about it. Also consider checking out Groupon for cool deals!
  5. Consider sharing: How about splitting an entree or appetizers at a restaurant instead of two meals? Or split the cost of groceries or a hotel room for a weekend trip? There are lots of ways to split costs and keep them down for both of you. 

A coffee date here or there might not break your budget, but multiple outings per week can send your hard-earned money flying out of your hands. Be mindful of how frequently you are overspending money on things that you could just as easily spend time on.

It’s important to prioritize your relationships but not the cost of your financial future. 

About the Author

Nicole Booz

Nicole Booz is the founder and Editor-in-Chief of GenTwenty, GenThirty, and The Capsule Collab. She has a Bachelor of Science in Psychology and is the author of The Kidult Handbook (Simon & Schuster May 2018). She currently lives in Pennsylvania with her husband and two sons. When she’s not reading or writing, she’s probably hiking, eating brunch, or planning her next great adventure.