How to talk to friends about money

Mathilda Volant

by , Content Manager

at PensionBee

26 Apr 2024 /  

Apr 2024

A group of friends smiling down on a sunny day.

Friendships are a cornerstone of our lives. They provide us with support, laughter, and a sense of belonging. But what happens when money enters the equation? The truth is, friendships can become surprisingly complex when friends have different financial priorities. Here’s some practical tips for nurturing your friendships without breaking the bank.

The awkwardness of money talk

Psychologist and Associate Fellow of The British Psychological Society; Dr. Tara Quinn-Cirillo says: “How does your body and your mind respond when you’re under stress? So that can be stress around money, gifting or going away for the weekend. If you recognise how it shows up, that will help you to know when there’s a problem.”

Let’s face it, talking about money can be uncomfortable. According to Intuit’s Prosperity Index Study, Gen Z would rather talk about politics, parenting struggles, sex and infertility rather than debt, their salaries and bad investments.

Avoiding financial conversations may create tension in friendships. But discussing money matters goes beyond breaking the ice, it can have a significant impact on your financial health as well.

It’s no wonder that nearly half of millennials overspend to keep up with friends. According to a recent Credit Karma survey, 80% of millennial respondents, who went into debt, kept their debt a secret from their friends.

Tips for talking to friends about money

Head of Brand and Communications at PensionBee; Brooke Day says: “I’m naturally a bit of a people pleaser. Especially in my 20s, I’d feel like if I say ‘no’ to this, I’m not going to be invited again. They’re never going to speak to me again. They’re going to think I’m the worst person.”

When it comes to dealing with money and maintaining friendships, the key is open communication. Talk about your budgets, how much you’re comfortable spending, and suggest alternative activities that everyone can enjoy without feeling left out.

This could be a potluck dinner, game nights, or free outdoor activities. Feel like you’re paying a premium to keep up with your friend’s lavish lifestyle? You can use apps like Splitwise to track group spending and make sure group expenses are divided fairly.

When you’re the wealthier friend

Being the friend with more money can also be challenging. In fact, a LifeSearch survey found that wealthier Britons are more likely to end friendships, with 56% of the highest earners dropping an average of seven friends during 2020 and 2021.

It’s easy to assume that those with the most money also are the most financially healthy. However, this assumption fails to consider the many factors that can influence one’s true financial wellbeing.

The truth is that financial income doesn’t necessarily equate to disposable income. Just because someone earns a lot of money doesn’t mean they have the freedom to spend it as they please. They may have other financial responsibilities that take precedence, such as saving for their retirement or supporting their loved ones.

While it’s natural to want to treat your friends from time to time, always paying for others can lead to resentment. It’s important to set healthy boundaries and be considerate of everyone’s budgets - including your own.

Tips for making lifelong friends

Co-Founder of Millennial Money UK; Niaz Azad says: “It depends on the friendship you have with people. I’ve been reconnecting with friends from my childhood. That’s a pre-status, pre-wealth bond that you have and none of us care what we’re doing.”

Friendships change as we grow older, and money is one of many things that can affect how long they last. Other factors such as health, work schedules, and life goals can also play a part. Here’s how to focus on the things that truly matter.

  • Focus on experiences, not spending - instead of focusing on expensive outings, prioritise making memories together. Engaging in meaningful conversations over coffee can often be more fulfilling than going out for a fancy dinner.
  • True friendship isn’t about money - don’t judge friendships by how much you spend when together. Find happiness in shared hobbies, emotional support, and enjoying each other’s company.
  • Know when to let go - When money becomes a recurring source of conflict or stress within a friendship, it might be worth considering whether the relationship is still right for you. It’s okay to reassess and make decisions that prioritise your overall well being.

Transitioning through different life stages

As time goes on, differences in financial situations between friends can become more noticeable. Milestones like buying a home, going on holidays, or starting a family can highlight these gaps.

Sometimes it’s the unexpected that creates an emotional distance between friends. Events such as losing a job, going through a divorce, or receiving an inheritance, can change your financial situation and priorities.

It’s important to remember that each person’s journey is unique, and these transitions can bring about changes in our relationships. However, understanding and empathy can help maintain strong bonds, even as our life circumstances evolve.


Friendships improve our lives in countless ways. While money can sometimes add complexity, focusing on shared values can help friendships weather financial storms.

Here are five key takeaways on how to talk to friends about money.

  • Push past the awkwardness - however awkward the conversation might feel, it’s better to be open than create tension with friends or have your own financial health take a hit.
  • Being the wealthier friend - it’s important to set healthy boundaries and be considerate of everyone’s budgets, including your own. Always paying for everything may lead to resentment.
  • Focus on experiences, not spending - prioritise making memories together rather than focusing on expensive outings.
  • Know when to let go - it’s OK to reassess friendships that no longer bring you happiness. Financial behaviour can reveal differing priorities or values. If money becomes a source of strife, it may be the right time to question whether you’re still compatible.
  • Engage in open communication - discuss budgets, spending limits, and suggest alternative activities that everyone can enjoy without feeling left out.

Listen to episode 27 of The Pension Confident Podcast and hear from our panel of expert financial guests as they discuss their experiences of talking about money with friends. You can also watch the episode on YouTube or read the transcript.

Risk warning

As always with investments, your capital is at risk. The value of your investment can go down as well as up, and you may get back less than you invest. This information should not be regarded as financial advice.

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