Money might not be everything, but it can define your lifestyle, goals, and even your friendships. We all have those friends who always seem to be struggling financially, the ones who never seem to get ahead. But have you ever wondered if constantly surrounding yourself with people who are always broke could be affecting your own financial mindset?
Friendships Influence Your Financial Habits
Believe it or not, your friends’ financial habits and mindset can rub off on you. Psychologists say that we subconsciously adopt the behaviors and attitudes of the people around us. “The people we spend time with shape our beliefs and decisions, including how we see money,” explains Dr. Marie Lopez, a psychologist from Spain.
A recent study published in Psychology Today found that people tend to mimic the spending habits of their social circle. This means that hanging out with friends who constantly make poor financial decisions might lead to you doing the same. On the flip side, if your circle includes financially responsible individuals, you’re more likely to make smarter money choices.
Living Large When You Can’t Afford It
When your friends are frequently broke but still want to enjoy life like they’re millionaires, it can create an odd kind of peer pressure. Social events, weekend plans, eating out, and travel trips can start to feel like a drain on your wallet if you’re constantly covering for them or adjusting to their standards.
In Japan, a 28-year-old professional, Mika, shares, “I felt like I had to spend more to keep up with my friend group. I wanted to save, but I kept saying yes to expensive dinners and nights out just to avoid the guilt trip.” Many people feel stuck in similar situations, torn between financial goals and social expectations.
Relationship counselor Rajesh Kapoor in India mentions, peer pressure around spending is real, and it affects people of all ages. The need to fit in can lead to poor money choices that derail your financial goals.
Is Broke by Choice a Thing?
Not all “broke friends” are the same. For some, financial struggles are temporary or a result of unfortunate circumstances. For others, though, it’s a choice—they spend carelessly without thought of saving or planning. Millennials in particular are seen to embrace “YOLO” (You Only Live Once) spending, where they prioritize experiences over savings.
Some of my friends just don’t care about the future financially,” says Carlos from Brazil. They spend on travel, partying, and gadgets, and expect me to do the same. I realized I need different priorities. This “broke by choice” mindset can make it tough for friends who are trying to save and plan for long-term goals.
Relationship experts like Dr. Aiko Tanaka in Japan believe that friends who are broke by choice might influence you into a short-term mindset, which can harm your financial health over time. “When someone close to you disregards financial planning, it’s easy to feel like you’re missing out if you don’t spend similarly,” she explains.
Setting Financial Limits Without Losing Friends
Sometimes, it’s about setting healthy boundaries. If you value a friendship but want to stick to your financial goals, consider being honest about what you can and cannot do financially. You don’t have to explain everything, but a simple “I’m saving for something important” is enough.
Thomas Cannington (a financial consultant) in the UK advises, “If you’re clear about your priorities, real friends will understand. It’s about finding a balance that lets you keep your friendships without derailing your financial goals.
The Hidden Costs of Always Covering for Broke Friends
Covering expenses for a friend can seem like a small gesture, but over time, these “small favors” can add up. You may find yourself in debt or spending more than intended just to keep everyone happy. In fact, covering for others regularly can harm your relationship with money, making you less conscious of your spending.
Statistics show that 30% of people between 25-40 in the U.S. admit they’ve taken on credit card debt to support a friend in need or cover costs in group activities, according to a 2023 survey by Credit Karma. It’s a trend that can quickly spiral if you’re not careful.
Juan, a 32-year-old from Mexico, says, “I didn’t realize how much I was spending covering for friends until I checked my credit card bills. It was hundreds of dollars each month.” If generosity is becoming a financial burden, it’s time to rethink how much you can truly afford to give.
Cutting Ties vs. Keeping Distance
Choosing to distance yourself from certain friends doesn’t mean completely cutting them out. It can simply mean being selective about when and how often you spend time with them. Relationship counselors suggest that this type of “social distancing” can help maintain the friendship without letting their financial habits interfere with your life.
In Asia, where family and friendships are highly valued, there’s often a hesitation to cut ties with friends over money matters. We grew up together, and I don’t want to lose them over money, says Divya (1st year B.Com student) from Ahmedabad, India. So now, I meet them but suggest coffee over expensive dinners.
Prioritizing Your Financial Health and Relationships
At the end of the day, your financial well-being has to be a priority. If your friend’s spending habits start influencing your own, then it might be time to consider distancing yourself or setting clear boundaries. You don’t have to cut people off entirely, but you do need to be honest about your financial goals and values.
In the end, every friendship is unique. Only you know which relationships are worth keeping and which ones might be holding you back. After all, financial health is about making smart choices—and that includes who you surround yourself with.
Anika Sachdev is a freelance writer, who writes about upcoming careers and academic studies. She is currently pursuing her diploma in Fashion Design from iNIFD. She enjoys writing, making illustrations and tracks AI technologies. Based in Mumbai, she likes to draw and listen to Bollywood music in her free time. For any questions, feedback or concerns, please email [email protected].