The Moneyist: My friend has no 401(k), but she likes to spend money. She wants to go on a spa weekend for our 40th birthdays. Should I give her financial advice instead?

Dear Quentin,

I am very fortunate to have a steady career and a 401(k), and I have been able to put money aside for my children’s education. This was not always the case as I had several years of education and a six-figure debt that I accrued, and I have learned to be very cautious with money. I bought a really nice house that cost $200,000.

My best friend got dug into her career after college, and recently upsized to a $600,000 house. Our families have taken vacations together, and we have always split things down the middle without money ever being a sore subject. It recently came up in conversation that neither she nor her husband have a 401(k); to be honest, I was shocked. 

I really enjoy my friend’s company, and I want to continue to do things with her. I don’t feel like it is my place to police her spending habits, and I don’t want to put her in an uncomfortable position either. She keeps on suggesting that we take a spa weekend to a mountain retreat for our 40th birthdays. 

Best Friend

Dear BF,

It’s not your job to police your friend’s spending habits, but it is your job to not stand idly by and watch your friend make bad decisions, if she was making bad decisions. That does not seem to be the case here. It sounds like she’s doing pretty well overall, and you have discovered a crack in her financial armor.

A friendship, a romantic entanglement, a marriage, and even a relationship with a coworker must be based on mutual respect and, yes, honesty. If you are considering canceling a 40th birthday weekend because you are concerned about your friend or you are worried about your friend’s spending habits, don’t do it.

It’s not your job to cancel the weekend, and engage in a “shock and awe” tactic that blindsides your friend: I’m canceling (shock) and here’s the reason (awe). That’s not fair to her, or to your friendship. Friendships should be a safe space. That is what keeps them alive over years and decades.

Yes, friendships require honesty, and you can lead by example. Tell your friend about your plans for the future, and how you are going to get there: saving, investing, and the benefits of a 401(k). She can decide to take what she wants from your story, and give the rest back to you with God’s blessings.

It’s not your job to judge your friend, but it is your job to share enough information about your life and tell her what you admire about hers. Her house may stretch her finances, but this may also turn out to be a good investment, depending on where and when she purchased the home.

Your differences may keep your friendship exciting, and help make it grow. She takes risks, she lives large, she loves her friends, she loves spending money and acquiring stuff. You may both finish the rate race, and hit your respective retirements right on target.

Some people want to go on earning money for as long as they can: They like the structure, and enjoy earning a paycheck. They are driven by the challenge and rewarded by the achievements, and they get a kick out of the social and professional excitement work can bring. Other times, it’s not by choice.

Friendship is a dance, an oil painting, a prestige television show, a movie. It’s a constant whirl of unexpected plot developments, changes of mood and color, flaws and beautiful details that you may not have noticed before. The best ones go on and one, constantly rewarding you with new twists and revelations.

In order for a friendship to survive, each party must believe that the other has their best interests at heart. Any hint of rivalry could do it untold damage. Let me tell you a story of a friendship gone awry: One couple counted their pennies, and drove an old jalopy, while their neighbors always had a spanking new pair of wheels.

As one of these couple told me: “We took camping trips in the mountains, while they enjoyed trips to Europe. We dug trenches, poured concrete foundations, and worked to build our house; they hired contractors. Our idea of a fun night out was the special at the local Chinese restaurant, while they clubbed it in the city.”

The fancy couple invited their prudent neighbors to meet their financial adviser. Perhaps they were showboating, but the meeting was worth its weight in gold. The cautious couple, who always lived within their means, listened to the financial advice to heart, invested wisely, and eventually retired early.

The spendthrift couple did not change their habits, and were reportedly not happy to see how their neighbors had flourished over the years, and afforded themselves the gift of an early retirement with all of the leisure time that brings. That friendship now exists in a world of “polite nods” and “thousand-yard stares.”

Arguably, they were never friends in the first place. They were neighbors who got along and who enjoyed the conveniences of each other’s company. But any hope of those neighbors forming a rich, lasting friendship was ruined by the bitter scent of rivalry. Each couple likely made judgements about the other.

You don’t want to end up like that broken friendship. Maintain open lines of communication with your best friend, go on your 40th spa weekend, and try not to worry about her bank balance. Be there, if and/or when she asks for help, but if your friend is successful and enjoying her life, don’t look for cracks in her wallpaper.

And during a quiet moment in the sauna, do not start peeling it.

Check out the Moneyist private Facebook group, where we look for answers to life’s thorniest money issues. Readers write in to me with all sorts of dilemmas. Post your questions, tell me what you want to know more about, or weigh in on the latest Moneyist columns.

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