From hen-dos that cost more than a holiday, to nights out that swallow up your salary – the pressure to keep up with friends can be financially tough, especially if they earn significantly more.

If there’s ever been a time to get real with this stuff though, it’s now. Prices are going up, up, up and soaring inflation is set to hit Britain harder than any other major economy during the current energy crisis, the Bank of England has just warned.

So, where to start? And could saying no to things you can’t afford actually be really good for you?

Normalise money chats

As senior therapist and author Sally Baker (workingonthebody.com) says, most people are feeling the pinch right now – and “that gives us all permission to be really honest about where we’re at, to express our reality about the cost-of-living crisis, because it’s impacting everyone”.

‘Personal finance cheerleader’ Jessie Leong, who shares relatable tips for transforming your relationship with money via her Instagram (@howifundthis) and ‘For What It’s Worth’ newsletter, says it’s OK to keep conversations about money simple.

“There’s a lot of fear that having conversations about money means delving into the details of our finances, but it’s enough to say, ‘Things are a little tight at the moment’. You don’t need to delve any deeper than you want to,” says Leong.

Be proactive

Seeing friends is really “about spending time together”, says Baker. “We all realised during the pandemic we didn’t miss things – we missed people. So, it’s down to us to find ways of connecting, and making that inclusive for people we care about.”

Take the lead in suggesting cheap or cost-free get-togethers. “I always try to offer a cheaper alternative, whether it’s swapping a dinner out for breakfast or lunch, or inviting friends over, to show that even though I can’t afford the event or activity, it doesn’t mean I don’t value the friendship,” says Leong.

“When it seems like everyone is sharing their best lives on social media, it’s easy to get sucked into the idea that we must be doing Instagram-worthy things all the time, and we forget the important part is seeing our friends.”

Be strategic with your budget

Having a budget is key when it comes to taking control of your money. But how you approach it is important – and yes, you absolutely can factor fun into your budget. In fact, it’s wise that you do.

“People often hear the word ‘budget’ and associate it with restrictive spending, but when used correctly, it’s a means to help you achieve your goals, or have money for the things you want to do,” says Leong. “To make a budget sustainable, I strongly believe it needs to come from two sides – the mindset, and of course the money. When we spend our money on things that make us happy, and cut down on things in our control that don’t, we feel like we’re getting more for our money because we place higher value on the things we’re spending on,” says Leong.

“In terms of understanding what those things are to you, reflect back on some of your recent purchases and look at what made you truly happy, and what may have already lost its novelty beyond the thrill of the purchase, or was a purchase you only made out of habit or boredom.”

Spend time looking at where your money is usually going and how much you have to play with. “If you’re looking to reduce your discretionary spending, do this in small increments instead of trying to cut down drastically,” suggests Leong. “Perhaps you’ll choose to spend £10 less this month, and another £10 less next month, until you reach a point where you’re spending less but not feeling like you’re missing out.”

Where’s this pressure coming from?

If you’re aware you’re over-spending to keep up with friends, have an honest think about what’s driving that. Are you embarrassed about earning less, is it FOMO? Do you feel it’s more important to keep others happy than prioritising your own financial goals? Getting aware of what’s motivating our choices can be really helpful.

If your friends tend to pile on pressure or guilt-trip you, what’s that about? “Friends shouldn’t be putting you on the spot or making you feel bad,” says Baker. “If that’s part of the dynamic, then that really needs looking at. You might decide: OK, maybe I don’t need to be so connected [to this person], I don’t need to feel so pressured. Or if I’m going to do everything, it’s going to really increase my stress levels.”

Sometimes it’s about being pragmatic, Baker adds: “There are social demands that feel very difficult to miss or say no to. But consider how the stress involved in increasing your debt is going to overshadow any pleasure of being in attendance.”

Focus on the wins

Ultimately, there’s a lot to gain here. “Those big group events, you often find you don’t get time to speak to the host, as they’re stretched trying to balance themselves out amongst all the guests. If it’s just something small and simple, it strips it down to the essence of why we’re doing this, which is wanting to spend time together,” says Baker.

Plus, by being intentional with your spending, those special treats and splurges will feel all the sweeter when you do decide to splash out.

“I don’t believe in cutting anything that’s important to you, or you get genuine joy from. But by switching things up every now and again, not only are you saving, but it’s likely you’ll feel your social life is more rounded,” says Leong. “Even if you’re swapping one dinner for a coffee once a month, you’ll make some big savings over a longer period of time.”