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How to handle earning less than your friends

Tags Money Management
Category Budgeting
how to handle not earning as much as your friends

Australia boasts a minimum wage of just over $640 per week, yet it still suffers wider income disparity than many European nations. Even among graduates, many industries (law, medicine and finance) enjoy far higher average and peak remuneration than others (pharmacy, social work and teaching).

This means that many Australians earn significantly different incomes than their friends and neighbours. While many of us measure our success by other metrics than money, it can still present a problem if you can’t afford to ‘keep up with the Joneses’. Here’s how to avoid awkward money moments without missing out on all the fun:

Look for deals

Even wealthy people are surprisingly frugal. Or perhaps not so surprising - their frugality likely contributed to their wealth. If you like dining out but can’t always afford the fine-dining restaurants your friends prefer, be proactive. Hunt down generous discount vouchers and enjoy five-star dining at fast-food costs. Group-buying sites can be a great place to start.

“It’s all too easy to simply swipe your credit card to avoid embarrassment when a big bill arrives.”

Split bills fairly

Here’s a horror story: a cash-strapped friend was once dragged along to a friend-of-a-friend’s expensive birthday dinner. She arrived long after the champagne was finished, but before the bill. She got stuck with a $500 share despite having only a $15 dessert and was “too embarrassed” to say anything. Take the initiative where you can and set the expectation that everyone is paying for themselves before the meal comes. Don’t be steamrolled into subsidising everyone else’s meal.

Leave the plastic at home

It’s all too easy to simply swipe your credit card to avoid embarrassment when a big bill arrives. Don’t put yourself in that situation. Stick to cash so you are forced to stay within your budget. Check the event prices or restaurant menu online, figure out what you need and take the right amount.

Accept generosity

Don’t be overly proud. Sometimes a wealthier friend or relative may genuinely want to treat you. Accept with grace, and if you wish to repay their kindness, invite them over for a home-cooked meal.

Be proud of what you have

There’s nothing shameful about having chosen a career with lower remuneration. The value of a job rarely aligns with its salary. At the end of the day, if you’re a teacher and a childcare worker living next to a banker and a dentist, it’s okay to say that something is out of your budget. Even if you were rich you might have other financial commitments, or simply prefer to spend your money elsewhere.

“After a certain point, a higher income doesn’t increase your happiness”

Dump the money obsessed

If your friends don’t get that you can’t afford to maintain their lifestyles, and constantly pressure you to break your budget or mock you for choosing cheaper options, reconsider those excessive nights out. The fact is that a night out for pizza and cheap wine can be just as enjoyable as caviar and champagne. It’s about the company and the conversation – not the stress of burning through your next rent or mortgage payment.

Above all, count your blessings. While it’s wise to look after your finances and save for a rainy day, money isn’t everything. Even the richest and most beautiful people get sick and made redundant, suffer bereavement and fail in business. After a certain point, a higher income doesn’t increase your happiness.