debt

Are friends to blame for your debt?

It's the forbidden question most of us prefer to avoid, at our financial peril. If you've ever picked up a tab, purchased a ticket or taken a trip with friends against your better judgment, you've probably wondered, however fleetingly, if your social life is driving you into debt.

"It is a dirty little secret. It isn't something anyone wants to look at or talk about," says MP Dunleavey, author of "Money Can Buy Happiness."

"Your friends can put a lot of pressure on you economically if you're not willing to admit that that dynamic is going on. You have to acknowledge the financial disparity between you and your friends. It's painful, but if you don't, all kinds of crazy things can happen."

Money counselor Ruth Hayden says couples will tear themselves apart to maintain their country club memberships, ski trips to Aspen with the old gang and expensive private schools for the kids rather than risk ostracism by their social circles.

"Whether you're 27 or 67, you are under pressure financially to be part of a group, although we don't choose to think of it that way," Hayden says.

How did we go from keeping up with the Joneses to having lattes with the Trumps? Read on -- if you value your money as well as your mates.

Author learns class lesson
Meet Eliot Schrefer, whose novels "Glamorous Disasters" and "The New Kid," deftly mine the modern no man's land between the haves and have-nots.

The trouble with 'Friends'

Hayden traces the recent escalation in peer-driven debt to one particularly perky, insidiously seductive TV program.

"It all started with 'Friends' on television, which set up an impossible image for young people today," she says. "There are two reasons that young people are in trouble: They've never learned how to problem-solve with money and they've never learned how to defer what they want. Part of the reason is 'Friends.'"

OK, so maybe Ross, Rachel, Chandler, Monica, Phoebe and Joey did seem to have a surfeit of spare time, cash and clothes as struggling 20-somethings in NYC. The point was that friends of different income levels could put money aside for the sake of their friendship, right?

Dalton Conley, the chair of sociology at New York University who studies wealth and class issues, says "Friends" is a nice fairy tale that doesn't accurately reflect reality. He says the friends/money friction in this country dates back to the first immigrant communities where enterprising sorts pulled themselves to success, left and never looked back.

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"There is a long tradition in America of people who no longer feel connected to or comfortable with their old buds once they themselves have made it economically," he says. "They go off to college, get a big job, and they can't really relate to the people they left behind in the old neighborhood."

The awkwardness is more common among college graduates today than it was a generation ago, in part because their economic backgrounds are more diverse. According to Thomas Mortensen, a senior scholar at the Pell Institute in Washington, college enrollment of adults ages 18 to 24 from the bottom quartile of family income increased from 28 percent in 1970 to 42 percent in 2003.

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