As the end of the year approaches and you set your budget, do you try keep up with your flush friends, or stay in line with your holiday spending?

We all have treasured friends who we can’t wait to spend a much-deserved holiday with come summertime. Some of those will be longer term friends with whom we’ve shared formative experiences, such as being students or junior colleagues together. Back then, we pooled cash for pizza after a night out or to pay for petrol. But in adulthood, income gaps widen, and this can put a strain on relationships.

How sensitive do you need to be to what your friends earn? Is the onus on you or them to speak up? What if the pay-gap problem persists? We delve in for tips on navigating this potential awkwardness.

Saving versus splurging

Good friendships usually prevail thanks to a shared set of values. Remember this when opening up about the pressure money may be putting on shared experiences. Ultimately, this is what will alleviate the pressure to overspend – being honest. Explain that you are on a budget, or you need to save for something important. Without sharing bank account bottom lines, help your friends see things from your perspective. Suggest alternatives (‘takeaway rather than eat out’ or ‘happy hour instead of dinner’) to show that you are committed to spending time with them, just not at the usual price tag. Once you’ve created awareness around your financial limitations, it becomes less onerous to explain, or provide an excuse for why you’d rather save than splurge.

If you’re the higher earning party, be sensitive to signs that indicate unease around money. When a friend constantly cancels plans, or there is tension around bill-splitting , find money-saving measures to show you don’t equate friendship with expenditure. Plan low-expense or free excursions: hiking, visiting an art gallery, or picnicking at a park.

Eating-out etiquette

With a business lunch or even a family meal out, there are expectations around who will foot the bill. But there are no hard and fast rules when it comes to feasting with friends (unless, of course, someone offers). Rather than spending the occasion watching and worrying, follow these payment protocols instead:

• Decide before dinner how the bill will be handled: Check with the waiter whether multiple cards can be taken, or whether separate bills are possible.

• If your group splits a bill equally, you may end up paying for more than you ordered. But take comfort – next time, the group should absorb your shortfall.

• If you’re dining with eager consumers (and you should know … they’re your friends), rather opt for a lunch or coffee date to avoid the overindulgence.

• Agree upfront to everyone having the same number of courses. It’s also perfectly acceptable for those having only a starter, or not drinking, to pay only their way.

Travelling together

A night out with buddies is one thing, but a week or weekend away together is quite another. If not handled properly, this is a sure-fire way to derail a friendship fast.

At the first suggestion of a holiday, raise finances as a basis for planning. Having the same approach to cash will ease the logistics. Basically, unless you want to be awkwardly back-pedalling out of a trip, ensure you only travel with like-moneyed mates, or at least with friends who agree to a system that works for all. Assuming, before you leave, you’ve each paid for your accommodation and travel costs, shared expenses – food, drinks, theatre tickets – can be paid for out of a cash kitty.

Alternatively, one person could keep a record of all expenditure and tally up any IOUs at the end. There are tons of mobile apps you can use to keep track of your group’s finances while you’re on the go.  Still, remember it’s about spending time with those you love the most.

Words: Ciska Thurman | Photography: Unsplash