If you’re like a lot of people, you made a financial resolution for the New Year to reach a larger money goal — which means tightening your belt and giving yourself less fun money to play with.
But sticking to a dialed-back budget can be a challenge when your friends continue to shell out big bucks on restaurants, vacations and group acro yoga classes for which you have a standing invite.
Giving them a general heads-up about the spending limits you’ve set for yourself is a smart idea; if they know why you’re cutting corners, they hopefully won’t tempt you to blow extra cash. Still, we understand that telling your group about your money goals might go against your instincts. Only 22% of Americans say their friends would be the first place they’d turn to discuss a new financial resolution, according to the 2016 Money Habits & Confessions Survey by LearnVest.
However, some wallet-draining social scenarios call for an upfront money conversation, even if it means getting over the awkwardness of talking finances with others. Here are five times you might need to explain to your group that you just can’t sacrifice the funds, plus how to do it without sacrificing your friendships — or your financial goals.
Potential Budget Buster: A Destination Wedding
A close friend is getting married in the Maldives, and it’ll run you thousands to attend — which is way beyond this year’s budget for a big trip.
How to Deal: Weddings are super special occasions, and the idea of missing out on a good friend’s ceremony because of cash constraints can make you consider stretching your budget just this one time.
Hold off until you ask yourself this: “Will I look back six months from now and be glad that I chose to spend outside my plan?” Your answer will likely depend on the closeness of your friendship and whether you could find a way to save for the event without depriving yourself, says clinical psychologist Anne Brennan Malec, PsyD. But if in six months you think you’ll still be on the hook for wedding-related expenses you put on plastic or rebuilding the emergency fund you dipped into, skipping it may be the responsible option.
“Let your friend know you simply don’t have the funds you would need to attend the wedding without digging yourself into a precarious financial hole,” suggests psychologist Irene S. Levine, Ph.D, producer of The Friendship Blog. “Tell her you’ll be there in spirit and want to find a way to celebrate afterwards.”
One idea: When the wedding hoopla has died down and the couple is back in town, invite them over for an Insta-worthy brunch or treat them to their favorite locally sourced bistro. And carve out time during the evening to go through their wedding photo stream or video with them, so you can relive each part of the nuptials and experience their joy as if you were there.
Potential Budget Buster: A Pricey Group Gift
You’ve been asked to chip in on an expensive present for a friend, but it’s well above the amount you were planning to spend.
How to Deal: An easy way to get out of this, Levine says, would be to tell a white lie and say that you’ve already purchased a gift; that would keep you from having to clarify your financial situation in the first place.
But in the spirit of being honest and open about money, consider putting the facts out there. “Explain that you wish you could afford that amount of cash, but you simply can’t,” Levine suggests. “Not having money to spend isn’t the same as being cheap.” Good friends will get it, and they may decide to go in on a less costly present you can chip in for or ask you to contribute a smaller amount that works with your budget.
Potential Budget Buster: Boutique Classes
Your gang wants to sign up for the same premium sushi-making class, but you’re the only one who can’t swing it.
How to Deal: It’s no fun being the odd man out because of money issues or budget choices. One way to approach the situation, Levine says, is to remind your friends that you are working toward living within your means — and as a result you want to be selective about where and how you spend your money.
A cheaper way to keep yourself included, Levine adds, is to let them know that although you can’t make the class, you’d love to invite everyone over to your place for a sushi potluck to show off their newly honed skills. You’ll supply the wine.
Potential Budget Buster: A Big Restaurant Night Out
You’re invited to a group dinner where you know your friends will order expensive entrées and dessert shooters while you get salad and water — and they’ll expect to split the massive bill afterward.
How to Deal: Divvying the bill evenly might be how your friends have always handled group feasts, so they may not even realize the financial burden they’re placing on you. In this instance, you could be doing them a favor by raising the issue first, so they don’t feel as if they are forcing you to overspend ... or to skip group dinners altogether.
So the next time you go out, Levine recommends asking early on if everyone is OK with paying for their own share of the check. Bring it up before the drinks and apps are ordered, so you don’t wind up covering a round of everyone else’s champagne cocktails. Once who pays for what is clarified, you’ll be able to enjoy yourself instead of stressing over the running tally in your head of what you owe.
Another option is to just join for drinks at the beginning of the evening, leave cash for the cocktails you imbibed, but skip out before the main event. That way you get to be social without having to deal with splitting a huge bill.
Potential Budget Buster: A Luxe Weekend Getaway
Your friends are planning a fun group vacation. You’d love to make the trip, but the costs are adding up fast — and beyond your travel fund limit.
How to Deal: This is another special occasion most of us would hate to skip. So first, evaluate how much the weekend is going to cost and whether it’s doable with some financial tradeoffs or if it could derail your progress. Think: “Will this expense stretch me or break me?” says behavioral psychologist Ben Michaelis, Ph.D.
If it’s the former, tell your friends that you want to go but high prices are an issue — and then try to problem-solve around it. Chances are, someone else in your group will want to spend less as well, even if they aren’t budgeting for a larger financial goal as you are. For example, “You will probably find someone who wants to split the costs and will be grateful that you proposed the sharing idea in the first place,” Malec says.
You could also see if your friends are open to other cost-trimming moves, Malec suggests, like staying in an Airbnb or budget-friendly hotel. Another idea could be minimizing food costs by shopping at a grocery store and keeping breakfast and snack items in your room, rather than frequenting the hotel restaurant. And hey, do you really need a pricey cocktail in your hand while you gaze at the beach or mountains? Scaling back on alcohol costs can save you a bundle.
At the end of the day, the point of these conversations is to be up front with your group about changes in your life and goals, especially when it comes to money. Once they’re in the loop, real friends will help you see them through, Malec says. This kind of honesty can only tighten your relationships — and who knows, maybe you’ll inspire other friends to think about their financial life and goals they hope to reach as well.