You should talk to your friends about money. Here’s how

Chances are, when you see your friends over happy hour, they complain about rent increases or bemoan their dwindling bank accounts. But how much do you really know about their financial realities or how they budget? It may feel like you’re in dire financial straits compared to your friends, but nearly 80% of full-time workers claim to live paycheck to paycheck—including about 10% of those who make six-figure salaries.

Many people—and perhaps that includes you—find it uncomfortable to talk candidly about money, whether it’s with family or friends. For one, most of us have been taught that discussing money doesn’t make for polite conversation (just look at the tagline of Anna Sale’s popular podcast, Death, Sex & Money). Whether you’re rich or poor, money can feel like a measure of self-worth and a way to define yourself. “Because money means something—it reflects who we are as a person, like it or not—it can be very difficult to talk about,” says Meghaan Lurtz, a financial psychology consultant and researcher studying personal finance. “It may be an aspect of your life that you’re not proud of.”

That helps explain why nearly 70% of Americans think of themselves as middle class (though only about half would qualify based on income). “If you don’t have money, you can look like you’re dumb, lazy, or irresponsible,” Lurtz says. “Whereas if you have lots of money, you can look greedy, rude, or snobby. In reality, none of those things are true among the masses.”

Given money is inextricably linked to so many parts of your life, Lurtz says it is important to discuss it with friends (and even family), if for no other reason than to chip away at the anxiety and shame talking about money can stir up. Here are some tips for doing just that.

When you can’t afford the same things as your friends

One of the biggest reasons to be more transparent about your financial situation is so you don’t feel coerced into doing things that are financially out of reach—be it a shopping trip or a night out. “A lot of times, if you don’t talk about it, you’ll end up doing stuff that you’ll regret later,” Lurtz says. “Perhaps you’re going out with your friends and you know you don’t have any money in your bank account. And of course you want to go, and everyone is pressuring you to go, but you only have $20 in your account.”

Lurtz believes that being honest about your finances doesn’t have to mean sharing your exact salary. That can feel uncomfortable for people on both sides of the spectrum—someone who earns more than their friends may then feel obligated to foot the bill sometimes or pay more than others. “You don’t have to disclose that much information, but there does need to be a way to tell friends and family to be accepting of the fact that not everyone is in the same financial situation,” Lurtz says. She admits that can be easier said than done, but that you can suggest friends come over before a night out for dinner or drinks, for example, or otherwise “break the night into pieces” so you don’t feel like you have to skip out on the whole evening or spend money that you know you don’t have.

If you can’t afford to attend a big life event—say, a bachelorette party or even a wedding—it can be much harder to break the news to friends. Some people may opt to spend beyond their means rather than disappoint a friend or admit they can’t swing the money. “When [one of my friends] was getting married, I was just starting out in my career,” says Lurtz. “I couldn’t go to her bachelorette because I was already flying home for her wedding. I was like, ‘I’m sorry, I just can’t go. We can have a special night together before the wedding.’” Lurtz says it was an emotional moment for both of them (“I was crying, she was crying”) and that it was hard to see posts from the bachelorette party. “But you have to know your friends and stand your ground,” she says. “Circle back to how you care about your friend and love your friend, but that you can’t make this work.” Think about how else you can participate without having to spend this money, whether it’s planning a night with your friend before the wedding or sending her something during the bachelorette.

Social pressure can also manifest in what friends may want for you. “My two best friends had beautiful lavish weddings, but when it came to mine, I really didn’t want those things,” Lurtz says. “I was getting married a little later, and I also really don’t like big celebrations. There was a lot of pressure I felt from my friends when we were looking at bridal gowns—they would bring me ones that were thousands of dollars. But I bought a $500 dress because I didn’t want to spend my money like that.” Usually, she says, that pressure comes from a place of wanting you to have nice things—to have the “best” things. Lurtz says to be clear on what the “best” means to you and saying something along the lines of: “I know you’re saying this because you want me to have the best. This is the best, and this is what’s making me happy. This is the thing that I want.”

Lurtz says there’s also nothing wrong with pointing out financial differences if you feel like you’re in a safe environment to do so. That could mean telling a friend, “Hey, I’m not trying to make you feel bad, but you probably make quite a bit more than I do.” Keeping the line of communication open and standing your ground—”I’m doing this because it works for me”—is important.

When you want financial advice

Given that the U.S. has spectacularly low financial literacy rates, friends can be a key source of knowledge. Jessica Ornsby, 29, says she frequently talks to her friends about money because she wants to share what she has learned. “One time we had a whole happy hour discussion about credit cards—which credit cards are best for building your credit, and how to increase your credit limit,” she says. Ornsby often shares details on how she manages her credit cards and how she increased her credit. “I have a lot of credit cards, and they’re all paid off,” she says. “That’s because I talked to people about how they paid off their debt and followed that plan.”

In fact, more than one-third of Americans reportedly don’t save money because, well, they simply don’t know how—not necessarily because they don’t make enough money, but because they don’t know what tools or accounts to use. That’s another reason people are uncomfortable discussing money, according to Lurtz—they may not want to admit that they don’t know much about managing finances. “People may be somewhat nervous to talk about it if they make a lot of money, but they’re blowing half of it or not using their 401(k) or don’t know what an IRA is,” says Lurtz. “That’s pretty common. So maybe they don’t discuss [money] because they don’t know any more than you do.”

That said, if you’re soliciting advice and feel comfortable sharing exact numbers, that’s your prerogative—but don’t assume your friends will disclose their own salaries. Since everyone has a different attitude with respect to money, Lurtz says open-ended questions are often preferable to asking someone their salary or bombarding them with specific questions about money management. You could reference an article about IRAs to start a conversation about whether you should open one, for example. “That question isn’t emotionally charged,” she says. “People seem to be more open to questions like that rather than direct questions about what exactly are you doing.” Couching financial discussions in conversations about your career can be another way to broach the subject—whether you’re seeking advice on how to negotiate a raise, or simply want to talk through your career decisions.

Lurtz adds that there is no reason why you can’t attend finance classes or workshops with your friends the same way you do, say, fitness classes. You can improve your financial literacy through countless avenues—Lurtz often recommends podcasts to her students—and those experiences can also be a vehicle for talking money.

When your friend is making poor financial decisions

If you’ve ever wondered about a friend’s spending habits, you may have—understandably—been too afraid to say anything. “It can be really tough to ever say to anybody, ‘Hey i see the decisions you’re making, and I don’t agree with them,’” Lurtz says. “People don’t like to be told what to do with their money.”

Lurtz concedes that this can be a tough conversation to have with a friend. That’s why she suggests taking a page from transformational leadership—not explicitly telling a friend what to do, but modeling good financial behavior. That can mean sharing your own financial struggles, or simply thinking out loud about how you are trying to be more fiscally responsible or how you are making financial decisions. She recommends saying things like, “I’m trying to be responsible and not go out,” or, “I’m going to use cash, not use my credit card.” (One of her tips for not spending more than you can afford is to only bring a limited amount of cash.) When you broach the subject this way, Lurtz says, “You’re not talking at the person—you’re just demonstrating positive financial behaviors without bragging.”

It’s hard to be vulnerable and honest when it comes to money, so you being more vulnerable can often help a friend open up. And if you make more than many of your friends, and one of them comes to you for advice, Lurtz stresses that you shouldn’t make assumptions about their money management. “If they’re asking for help, that is a huge step,” she says. “If you’re talking about the financial decisions you’re making and how difficult they are—or that you’re struggling and want advice—that is incredibly brave.”