Money issues can bring about powerful shifts in relationships. Differences in financial stature, in particular, expendable income, can cause conflict.

Your friend wants to dine at the Savoy, but you can only afford McDonald’s. Or your girlfriend is strutting around in her designer-label suits, while you feel a little dowdy in your off-the-rack department store clothes.

Keeping these friendships fresh and fun all depends on what you put into them – a good mix of understanding, openness, compassion and love is all it takes.

1. Let your financial situation be known

Every authentic friendship requires effective communication. If your friend earns lots more than you, why not drop some obvious hints about your unfavourable financial situation.

Mentioning even the smallest matters, like your insignificant annual bonus this year, will catch the attention of your wealthier friend. Your friend will surely understand where you are coming from.

In fact, it’s advised that you talk openly about your financial difficulties, even though you may feel embarrassed at first. You may be concerned that your friend will see you as inferior. Or even reject the friendship altogether.

Just remember that true friends don’t react this way. Who knows, your friend may even help you towards improving your financial situation.

2. Share your budgetary expectations

As friends, you want to spend time with each other. Remember that it will be your responsibility to let your friend know exactly how much money you expect to spend on joint activities.

Find common ground during the planning process. It may be likely that your higher-earning friend will suggest more expensive activities, and it’s at this point that you must open up about your budget.

If your friend still insists on high-priced outings, this may be the perfect time to get innovative. Suggest alternatives that offer a comparable experience to what your friend suggests.

For example, your friend may suggest a movie at the cinema. You could suggest watching a favourite movie on DVD together at home. And dining in.

Of course, if you suggest thrifty alternatives every time you and your friend make plans, it wouldn’t be fair either. It’s wise to save and earmark a bit of money for the occasional expensive activity.

3. Be honest about what you can’t afford

There will always be lavish, meaningful events that would break your budget: excursions to exotic distant getaways, or your friend’s wedding in Hawaii.

You might find it difficult to sit out such extraordinary events without feeling guilty or hurting your friend’s feelings. In such cases, be totally honest. If you cannot afford these activities, say so immediately. Your friend will understand.

Weddings are particularly stressful and often problematic to organise. For this reason, a direct “no” to your attendance will prevent complications during her preparation process.

If you are invited to take on an active role in the wedding, like serving as a bridesmaid, remember that your friend will need to start looking immediately for a replacement.

Don’t make your friend feel guilty. Instead show how meaningful her “big day” is by expressing your appreciation in other ways. There are many budget-minded gifts you can come up with. You could offer to edit the wedding footage or help post thank-you notes.

Otherwise, take a good look at your finances and attempt to tackle these situations by being honest about how much you can afford. You might decide to travel economy class.

Consider sharing your room with others at a low-cost hotel or hostel. Skip the expensive parasailing or waterskiing and just chill at the hotel pool. Let your friend know about these things beforehand to avoid an uncomfortable situation.

4. Be courteous and appreciative when your friend helps you out

Your friend may want to help you out financially at certain times. When a friend lends you money, be grateful for it.

Show appreciation by repaying it as soon as you can. He or she might not demand an instant repayment but paying it off quickly will be highly appreciated.

Even if your friend does not establish a solid deadline, set one yourself to keep yourself on track. Additionally, you can express your gratitude even more by paying back a little interest on your friend’s “loan”. Just give your friend a simple treat and it will mean a lot to him or her.

This article first appeared in thenewsavvy.com

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