Are your friends really worth the price?

e|mo SG

Hanging out can be costly, and not everyone makes a fortune. Here are some real-life solutions for preventing your friendships from draining your bank account.

By MP Dunleavey

I've written a lot about my budget and how it's helping me to achieve financial sanity. (And it's mostly true.) But as I've adjusted to life without the indulgences once covered by my credit cards, may they rest in peace, I've realized how hard it can be to live within my means.

I'd like to blame myself. It would be so easy to fall back on excuses. "Old spending habits die hard," and so forth. And I can't blame my budget. It's a well-oiled machine. Long after I die, my budget will keep on going, Energizer bunny that it is.

No. It hurts me to say this, but after long, long, LONG soul-searching, I've had to face facts. The reason I can't keep my spending in check is -- my friends.

You know what I'm talking about. Your friends are carving a hole in your bank account, too, aren't they?

Don't even say it. I can read the desperate truth in your eyes.

e|mo SG

A short history of friends and money

It all began with that show. That cozy group of "Friends" escalated the economics of friendship in a way that is costing us all a pretty penny. First of all, we all got it into our heads that you're supposed to hang out all the time -- and look really hip while doing it. Does anyone on that show ever say, "No, I can't afford to drink nonfat lattes all day and change clothes in every scene?" I don't think so.

In fact, if you track national credit-card debt on a timeline with the show, you will see that with every passing "Friends" season, we have all gotten more and more into debt. Time was when friendship was about Little League, hopscotch and throwing rocks at cars. Now we've come to equate friendship with Spending Lots of Money.

Remember how in college it was totally cool to turn down any meal, beverage, concert or any other perfectly legal activity by saying, "Nah man, I'm broke"? And then your friends would pay for you, so you didn't have to hang out in your dorm alone listening to George Michael and crying?

I'm not sure when it stopped being OK to do that, but it generally coincides with two things: a) the patriarchal, capitalist deconstruction of friendship into a classist, materialist pursuit thanks to NBC and its minions, and b) when all your friends got better jobs than you did.

e|mo SG

Friendship in adulthood

So we've identified two forces at work at the crossroads of friendship and personal finance.

One: Friendship is just more expensive than it used to be. It's not good enough to rent a movie and have a few beers with friends when there are trendy restaurants where you can spend six figures on a single meal -- and friends who insist on going there.

(A woman friend who shall remain nameless got stuck paying $1,500 -- for just ONE room -- for a weekend getaway trip to a swanky resort. She has now learned the value of making a preemptive phone call before packing her bags.)

Two: Everyone grows up, and the sad fact is that some people make more money than others. They get better jobs. And bigger houses. And better cars. And nicer vacations. And the next thing you know, you're taking out a home-equity loan to remodel the kitchen and build a small guest chalet in the back yard because you don't want to look like a loser.

Not me. Thanks to my knack for spotting these sociological trends in our culture, I'm able to live peacefully in Northern Manhattan, content with my 1988 Toyota Tercel, several time zones away from SoHo or anything resembling hip materialism, because I know my friends love me. Although I haven't seen them in a while.

e|mo SG

Friendship and financial sanity
This all makes perfect sense if you consider that from the time you're in kindergarten, you spend most of your time wanting what other kids have. And then whining about it to your mom. If they gave credit cards to kindergarteners (which I'm sure is right around the corner), those little kids would bring "buy now, pay later" to a whole new level.

But you get into trouble when that costly must-keep-up mentality kicks in around your friends. It can lead to a whole host of financial faux pas and strange decisions. For example:

1. Everyone Eats Out So You Do, Too.

Because no one has any time to cook. Unfortunately, this adds up. My budget allows me to eat out about twice a week. Assuming I save one of those nights for my boyfriend, how do I manage to see other people? I go out with them and pretend it's not costing anything. Naturally, I'm shocked when I see my bank account. Not a good system.

2. People Want to Do Things.

Forget "hanging at my house," "grabbing a bite," "going camping somewhere" or any of those other virtually cash-free things you did a decade ago. Most of your peers want to attend a play, book a weekend at a B&B, go skiing or "check out that new restaurant that just opened." (The personal, one-on-one experience of restaurant openings is now on the level of Rembrandt collecting.)

3. We All Pretend That We Earn the Same Amount.

This equal-earning-power fallacy is what we tell ourselves, but it's just not true. And believing it can lead to costly mistakes. So rather than sign up with your friend's shmancy financial planner-contractor-personal trainer-dog groomer, try to stay in synch with your own wallet and practice saying things like, "Thanks, I think I'll shop around."

e|mo SG

What to say, how to cope

It would be nice if honesty were an option. But when it comes to money, honesty is usually a last resort. So in order to protect your personal fortunes from your social life, you have to rely on subterfuge. I and others I spoke to, under strictest secrecy, like to have a few well-chosen words at the ready:
"I just bought one of those";

"I own six just like it";

"I went there last week";

"We'd love to cook dinner for you guys";

"Wow, that's pretty pricey for a gym membership. And you say that kind of extravagance is worth it to you, huh? Me, I like to keep my workout pretty stringent, focused and rigorous -- like Boot Camp."
Excuses are key. One woman I spoke to uses her recent move to a new apartment as a justification for frugality. I myself have trotted out the phrase, "All my money is going to my house" on several occasions. If you're saving for a baby, saving for college, paying off college, paying off law school or redecorating -- these are also very good excuses. And most sensitive friends will immediately suggest McDonalds.

Finally, beware of birthdays. A colleague of mind admitted that when a friend's birthday is held at a restaurant, he always calls ahead to find out how expensive the evening is likely to be -- and then scales back on the birthday gift accordingly. Calculating? You bet. We love our friends, but we must learn to love financial sanity even more.