The real price of friendship
We’ve all been there, out for dinner with a group of friends and someone orders the most expensive thing on the menu. You, however, still have three days until payday and are looking at just a side salad.
When it comes time to settle-up, do you become ‘that person’ and ask if everyone can pay exactly what they owe?
Or do you just reach for the credit card and agree to split the bill for the sake of keeping the peace?
Managing money is hard but when you throw friends and social situations into the mix, it’s even trickier and our traditional British stiff upper lip (aka staying quiet even though we’re seething inside) can have real consequences on our bank balances.
Good friends are something we all need and the past year has shown us that more than ever – zoom calls just don’t really cut it when you want to hang out with your best mate.
But going out for dinner, drinks or a night out costs money and after a year of lockdown we’re all more than ready to get out again.
It’s estimated that six million of us have become accidental savers over lockdown, according to the consultancy firm LCP, but if you're one of those lucky enough to have saved money in the last year are you ready to start throwing it at your friends? Or should you be putting it towards your savings?
The most expensive life events
Life events for friends can be a significant pull on your money. It starts with big birthdays when people turn 18, 21, then 30.
Before long, it’s hen or stag dos, which after the foreign trips and bar spend can sometimes require the same amount as a small house deposit.
Then comes the wedding - after you’ve thrown in everything from the travel and accommodation to an outfit and a gift, watching your friends tie the knot is likely to be one of the most expensive events you’ll attend for your pals.
According to research by American Express, being a guest at a wedding costs almost £400. Wow.
If things rise this year by 30% again costs could be up to £508 per wedding. If you’ve got two weddings in a summer - that’s over a grand racked-up just for being a wedding guest.
But remember, that no friend is worth getting into debt for or sacrificing other things you need to spend money on.
We all need to look after our friends but make sure you’re not drifting into debt by doing so.
And keep an eye on your own savings for the things that are important to you, be it for a house deposit, a car, a wedding or whatever you have on the horizon, by putting money away into an account paying interest. Good friends will always support your priorities.
After a year of being locked up, there will be more pressure to spend on these life events – risking the money you’ve saved disappearing quickly
How to cope with the cost – and not ruin your relationships
Everyone loves a new baby, yet the costs associated with the new bundle of joy can add up.
We spend an average of £42 when the baby arrives, according to American Express research, and then there are the presents for birthdays and Christmases every year after.
For birthdays alone, parents spend £25 on average for other kids’ presents, according to the research. If you have 10 friends or family members, all with two kids each, that’s £500 a year. Just think how many plastic Peppa Pig toys that adds up to.
If you find that you’re struggling or uncomfortable with the amount of money you're spending on children’s gifts, remember that a good friend will understand so be open and honest about your concerns.
What’s more, they might even be in the same situation and together you could agree on a gift spending limit or choose not to buy presents altogether.
3 things to do right now...
If there's no way of getting out of being a guest, soften the blow of the expense by planning and budgeting early for the expense. Most people give ample warning so it should give you enough time to bank enough cash to cover the event without a shock.
If you're buying a gift from a registry, set a reminder in your diary for when the list goes live. By getting in early you'll be able to choose a present that best suits your budget.
If buying for a big family blows your Christmas budget or there are six weeks every year that are full of birthdays for the babies in your National Childbirth Trust (NCT) group, organise Secret Santa with an online generator tool such as www.drawnames.co.uk.
Please share this with someone who'd benefit from it.
Don’t forget that while you may think that this article is brilliant, it is intended for information purposes only and should not be mistaken for financial advice or recommendations.
At Compare the Market we make it easy to compare home insurance policies to help you find one that’s right for you.