Young people with money and their leeching friends
Imagine you're a 20-something successful lawyer, and you happen to be earning an annual salary that dwarfs those of your friends. What typically happens when you're out for a night on the town, and the check arrives? Well, either your friends kick in their portion of the bill, or they look to you to cover it.
Why would they look to you to pay their bar tab? As the person at the table with the greatest means, you'd have the greatest ability to pay it without feeling the financial impact. After all, you're earning all this money, while your friends are still 20-somethings with low-paying jobs (if they have jobs at all).
Moving from this phase of your life to one of financial maturity can be a very awkward time for young people, especially young people that happen to earn much more than their long-time friends. Along with spiritual maturation, having kids, and the like, financial maturation can test friendships and put a real strain on old relationships.
If you're a young person achieving more (at least financially) than many of your friends, you may feel a sense of obligation to those friends for sticking with you throughout your rise to the top. More likely, they may feel a sense of entitlement for cheering you on during that rise.
It's very similar to what I call the "Lottery Syndrome." Have you ever noticed that folks that earned $10 million through business ownership are bothered alot less for money than folks that won $10 million through the lottery? For whatever reason, many of those lottery winners feel compelled and are almost excited to respond to these overtures. "I'm going to do something with my money." At the same time, the business owner has quietly put a financial plan in place, not in any hurry to start doling out money (while hopefully giving to favorite charities over the years).
How to keep the friends you want and at the same time maintain sane, mature finances?
First off, be understanding of friends that don't have as much money as you. If you don't want your friends to expect you to pay for dinner, don't choose an expensive restaurant to dine at. Dine where your friends would dine. Maybe this is not your lifestyle anymore, but you can hardly expect your less wealthy friends to be able to pay for an expensive meal just because that's what you can afford. Second, you hopefully have friends that will be understanding of your situation. I have some friends that make more than my wife and I do, and we've simply had to say "no" a few times. Finances were tight, I had investing goals for the month, whatever the reason. I just had to say, "No, we can't join you tonight, money is tight." Finally, you hopefully have a group of friends that are not just hanging around you for the money. But if you do, you may feel forced to realign your relationships. Or put another way, ditch some of those so-called friends.
16 comments:
I have this problem too. I am 27, and have a much higher salary than my friends and relatives who have all chosen to do more public interesty things. No one understands that I intend to eventually take a less stressful, lower paying job, and thus need to save as much as possible.
1. I find these friends and relatives come to expect me to treat whenever we do things and their appreciatory thank you's reflect their expectation that I would pay all along.
2. My friends who make the same as I do are completely ununderstanding about my wanting to be frugal and stare at me blankly when I explain why I bring my lunch.
These two phenomena make it very difficult to keep a frugal spending budget as others simply don't understand why I would do such a thing.
Yeah, this was a hard one for me to give advice on, because:
1. I am 36 and don't have this problem anymore. In fact, a few of my friends are business owners and are making way more than me now, for sure.
2. We're not talking about a simple decision like "What percentage of my portfolio should be in bonds?" You're dealing with people, with emotions, and most importantly, with friends. 500% stickier situation that just making cold decisions about your asset allocation percentages. You have to manage relationships, feelings... this is so difficult.
I agree. There was recently a survey on CNN's Money site about whether you should pay the bill if you make more money than your friends, and the vast majority of people said no, it should be split. And I completely agree. Like you said, just don't go to the restaurants that would be a strain on your friend's finances.
I'm in a situation with a group of friends where one person (not me :( ) gets paid significantly more than everyone else.
I think the only way he might pay more is that he usually buys the first round of drinks at the bar. Although, I don't feel bad as some research has shown that people the buy the first round don't normally end up paying out any more.
We go out to the sorts of places that we can all afford - including until recently some grad students. I would be insulted if he paid more for things, it would be like saying that I'm not successful enough to pay my own way.
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