Are income gaps quietly reshaping your friendships?

For this week’s Top Story, we’re diving into the effect of money on our friendships and social circles.

This spring, in between calling out directions during a spin ride, Peloton instructor Cody Rigsby addressed a topic that touches all of us. One that has nothing to do with working out: the impact money, and how much you make, can have on friendships. “Imagine having friends that Venmo to the cent. That’s not my kind of person,” he quipped in a no-nonsense tone during the May 5th class. “You’re strapped that hard? … definitely not coming on the girls’ trip. Don’t even send the details. No. If you’re so strapped for cash, you shouldn’t be taking the trip, babe.”

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Some may think the sentiment as harsh, but it’s a dilemma that many have to navigate in their relationships, whether someone’s got a new job with a big salary or been furloughed and needs to track their daily spending.

When your income changes, so can your social life

Jamie Burke, co-founder of real estate marketing agency Burke by Burke, experienced this with colleagues-turned-friends when she left her property management role to start her company. “I got into property management purely for the money. It’s not like you say, ‘When I grow up, I want to be a strata manager’,” says the Vancouver resident. While in property management, her colleagues would see each other at industry events and socialize outside of work at dinners, drinks and concerts.

When Burke decided to make the shift to marketing and launched her own company, the intention was for everyone to stay in touch and maintain their social calendar. But that never happened. “I thought we were all going to stay friends. And it’s not like we’re enemies now; we still follow each other on social media. I still see them from time to time, but it’s not the same,” she says. “I’m posting my homemade dinners and the crochet sweater that I’m making, and they’re posting about their golf tournaments, trips to Japan and the oysters they’re eating.

“The salary was almost like a bridge, and once that bridge was gone neither of us really bothered to bridge that gap with other means of adapting what we each did,” Burke explains.

The hidden cost of earning more (or less) than friends

We expect friendships to shift through life’s big milestones—marriages, kids, a cross-country move. A change in income, however, can catch Canadians off guard. And unequal budgets and differing priorities on spending can take just as much of a toll as other major life changes. These shifts may lead to resentment from those who feel they have to compromise for friends who can’t spend like they do, and shame or inadequacy for those who don’t have the means to match spending. Those with more money may cover meals, concert tickets or hotel stays, while the friend on the other side of the equation may feel like a charity case.

Stefanie Ricchio is a Toronto-based CPA who also runs financial literacy programs for Canadians. Her advice, when trying to navigate social plans across different financial statuses, is to address the elephant in the room.

“You have to find a comfortable way to have the conversations around it,” she says. “Instead of saying, ‘I would love to go to the Four Seasons for lunch,’ how about saying, ‘I would love to see you. Do you want to get together?’ Get that yes first, and then say, ‘What kind of things are you interested in?’ It’s different than saying, ‘Hey, let’s do this,’ and then they have to say no.”

Ricchio herself has had to navigate the impacts a significant jump in income can have on friendships. When she left a corporate job and launched her own consultancy, her business took off, placing her in a different income bracket than many of her friends.

“I preach financial empowerment, so it never occurred to me that once I achieved those things myself, it would be off-putting to people,” she says.

There have been small adjustments she’s made. She started taking solo trips because friends can’t always afford to join her, for instance. And she joined a women’s network of founders and executives that introduced her to a group of women at a similar income range.

But at times, the impact has been bigger. She had long dreamed of owning a Maserati, and once she was able to ensure her children’s education funds were secure, she decided to take the plunge and make the purchase.

She let a few close friends know of the purchase, and one, despite initially reacting positively, eventually sent Ricchio a message letting her know that her real reaction was the opposite. “She said, ‘I just want to tell you that when you told me that you bought the car, my actual initial reaction was, that b--ch, she was able to buy that car.’” Ricchio recalls. “It kind of winded me.”

Still, she’s positive that there are ways to overcome the tension money can add to friendships, and much of it rests on finding common ground through interests and passions—whether it’s meeting once a month for dinner and taking turns on who chooses the restaurant or both hopping on a bike to go for a ride together.

Is there good news?

Rigsby’s spin-class commentary may have been blunt, but the discomfort it named is real and more common than many of us let on. So, whether you’re the friend who stops responding to the group chat when a birthday weekend away gets proposed, or the one who’s learned to hesitate before sharing good news because you’re not sure how it will land, money has a way of surfacing feelings we’d rather avoid. The good news is that friendships worth keeping tend to be resilient enough to handle honesty—even about something as loaded as a budget.

Read more from this issue of The Get:

1. What Canadians can do with a windfall
2. Celia Sears on making the biggest bet on herself
3. Is premium economy worth it?
4. Where does my money go?