You and your friends may have shared a similar economic situation when you were kids or while you were in college, but now that you are adults, your incomes might diverge widely. Perhaps you've chosen to join the volunteer corps or pursue a Ph.D. while your friends are already working high-paying jobs. Differences in spending habits can destroy a friendship when they result in wildly different lifestyles or feelings of resentment, but if you approach the money situation with care and you have good friends, you can avoid blowing your paychecks on luxury cruises and sushi dinners that you can't afford.

1. Don't Assume You Can Afford It Too
Just because all your friends recently purchased new luxury cars doesn't mean you should follow suit. If you've always been on similar spending levels in the past, your inclination might be to think that nothing has changed. However, your friend might be earning a bigger paycheck, or be willing to make sacrifices in areas that you aren't, like living in an inexpensive apartment or giving up vacations, in order to afford his or her new wheels. Of course, for all you know, your friend can't afford it, either. Most people don't volunteer information about how much they make. Stick to purchasing decisions you know you can comfortably afford, regardless of what the other people in your life are doing. (For related reading, see How Do Your Finances Stack Up?)

2. Be Honest
People who are your true friends won't drop you because you can't afford to dine at four-star restaurants. You may have to miss out on some pricier outings, but good friends will be flexible and incorporate inexpensive activities into their social lives that you can join in on.

3. Suggest Alternatives
If your friends invite you to a restaurant you can't afford, suggest meeting up at your favorite coffee shop instead or offer to host a potluck. If they want you to join their gym, suggest going hiking or taking a stroll around the block. If they want to visit San Francisco and stay in a pricey hotel, suggest camping on the outskirts of the city or getting enough friends to come along so that you can share the room bill and make it affordable. When you give your friends options instead of turning them down outright, they'll know that you care about spending time with them and maintaining the relationship, even if you can't always afford the things they want to do.

4. Plan the Activity
Instead of taking the defensive position of trying to steer your friends' plans in different directions, go on the offensive and start coming up with the plans yourself. You could suggest a volunteer activity, a movie night at your place, playing Frisbee, or a museum visit. Good friends will understand that spending quality time together doesn't have to cost money.

5. Spend on What You Want
This is an important life lesson. Whether you're making a small purchase or a large one, you should be the one to decide how your money is spent. If you want to pay off your credit card more than you want to go clubbing, don't go clubbing just because your friends are doing it. Let your friends in on why you are turning down their invitations so they'll know that you're rejecting the expense and not their company. As mentioned previously, always follow up a refused invitation with a new invitation.

6. Save So You Can Spend
If your friends really want to fly to Spain for a trip and you really want to go, don't automatically turn down the invitation just because you can't afford it as easily as they can. Make it a priority to save for the trip ahead of time. Sometimes stretching your budget doesn't seem so bad when it's for an experience you'll value for years to come. (To learn more about saving your disposable income, see Sneaky Strategies That Fuel Overspending and Squeeze A Greenback Out Of Your Latte.)

7. Minimize the Cost
If you do take your friends up on an expensive outing or trip, leave the plastic at home and take with you only what you can afford to spend Then, think about ways you can minimize the cost of the outing. Eat before you go to the restaurant and order an appetizer as your meal. If you aren't driving, have a drink or two before you go to the bar, then order a soda while you're there. If you must drink while you're out, drink beer or wine instead of pricier cocktails.

Having friendships isn't supposed to be costly, and it doesn't have to be. If you make a conscious effort, you should be able to stick to your budget without losing your friends.

To get started on the road to improving your financial scenario, see Six Months To A Better Budget.

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