Bridal parties and birthdays draining your account? Here’s how to discuss money with friends
Mounting social engagements — and expectations — means you may have to have some tough conversations with friends about money
If you’re in your 20s or 30s, chances are you’re spending a lot of money on your social life. Between weddings, baby showers and milestone birthdays, you’re likely being asked to devote funds to expensive trips, gifts and more. While you’re likely thrilled to share these special moments with your friends, as your expenses quickly add up, you might suddenly find yourself making tough decisions and having uncomfortable conversations with the people in your life about what you can actually afford to do.
“This [stage of life] is prime time to get your financial house in order and put plans in place to build significant wealth toward your retirement years,” says Toronto-based financial expert and More Money podcast host Jessica Moorhouse. If you spend this time draining your savings or racking up your credit card bill to go to a friend’s destination wedding, “the financial repercussions can really have a big impact on you,” Moorhouse says. “But you may not think of it because you don’t want to have an awkward conversation with your friend.”
Vancouver money coach Parween Mander knows these uncomfortable conversations well. One of the first things she suggests clients do during this stage of life is to set up a separate savings account — which she calls a “sinking fund” — in which you set aside money to eventually be used for weddings, group trips or other friendship-related expenses. “Then you’ll have a buffer of funds to pull from when things come up for you,” she says. “This is one way of honouring your boundary with yourself, and you’ll have a pool of funds you can use in a way that feels comfortable and wouldn’t put you into further financial hardship.”
Having that buffer doesn’t mean you should avoid the tough money conversations, however. Ahead, Moorhouse and Mander offer advice about how to broach these tough topics with your friends.
The problem: “I can’t afford the mounting costs of my friend’s bachelor/bachelorette trip.”
The conversation: The costs associated with extravagant, Instagram-worthy bachelor and bachelorette trips can quickly get out of hand, which is why Moorhouse suggests jumping in at the planning stage. Offer to help organize the finer details of the trip so you can coordinate a budget-conscious itinerary while keeping an eye on the costs.
If that’s not possible (or if the bride has loftier dreams), then bring up your concerns as soon as possible and use what Mander calls the “step-down spending” method. “Approach your friend and let them know that you love them and you want to be there to celebrate them, but you’re not able to commit financially to this trip, but are able to commit to a lowkey event in the city, like a spa day,” she says. “Step-down spending is not saying no entirely, but providing an alternative that shows the other person that you still care, that you’re still wanting to make an effort.”
It’s even better if you consider this cost, and the costs of other associated celebrations, when you are first asked to be in the bridal party. Ask yourself: Would you have to put the expenses on your credit card or use money that had been allocated to something else to be in the bridal party? If that’s the case, Moorhouse advises you’re better off politely declining the offer and being honest from the moment you’re asked.
If you still want to find a way to make it work, be clear about how much money you’re able to commit and ask the bride if that aligns with what they have in mind. Let the bride know you want to support her but you’re not able to commit to every duty and would instead love to participate in certain events (specify which), while also emphasizing that it’s her big day, and if she’d rather have someone who can contribute at the level that matches her vision, that’s totally understandable. “It depends on the expectations of the events,” Mander says. “It’s okay to ask the bride and have clear expectations versus just being sent the bill for things you weren’t anticipating.”
Step-down spending is not saying no entirely, but providing an alternative that shows the other person that you still care, that you’re still wanting to make an effort.Getty Images
The problem: “I don’t know how much to spend on a wedding or baby shower gift.”
The conversation: Mander recommends starting by being honest with yourself about your relationship to the person in question — you shouldn’t be spending the same amount of money on, say, a coworker as you would your best friend. Group people based on how close you are with them and decide how much money you’re able to spend at each level. If you’re still unsure about what an appropriate amount is, Moorhouse suggests asking around to figure out what other people have been spending on similar events on average.
And if your budget makes buying a gift at all difficult, don’t be afraid to go off the registry, make something yourself or offer a thoughtful act of service instead. “In advance — not on the wedding day — you can be like, ‘I’m so excited to go to your wedding. I looked at your registry, and I can’t really afford that because I have a few other financial things going on,’ then come up with other suggestions,” Moorhouse says, suggesting something like offering to pet-sit while the couple is away on their honeymoon.
The problem: “I want to plan a trip for my milestone birthday but don’t want to put financial pressure on my friends.”
The conversation: “You probably already know what [your friends’] financial situations are even though most of us don’t talk about it openly — so it’s up to you whether you’re going to go on this trip anyway [knowing that] some people aren’t going to go because they can’t afford it,” Moorhouse says. If you want to accommodate everyone in your group, Moorhouse says, then consider changing your plans from something like a week-long trip to Mexico to a weekend in Muskoka.
But if you want to go all-out without making your friends feel like they have to do the same, both Moorhouse and Mander agree that the key is, again, to be upfront and specific. Tell your friends what trip you want to take, what your ideal hotel is and what the estimated costs are from the beginning. And, while you’re doing it, be open and flexible with your invitation. “Be like, ‘I totally understand that everyone has a busy schedule,’ then people can opt out if they can’t afford it or [because of] something else,” Moorhouse says. “Present it in a positive way and [say], ‘There’s literally no hard feelings if you can’t make it.’”