Category Archives: Friends

Fighting Facebook Envy

Have you ever noticed that your Facebook friends always seem to be going on great vacations, checking in at various sporting/cultural events, posting pictures of delicious-looking restaurant food, “liking” various stores, and, at the moment, pining over the soon-to-be-released iPhone 5? It’s enough to make you feel like you’re the only one in your circle of friends not spending a boatload of money on random shit you don’t need.

It’s easy to start feeling a little down on yourself. You wonder, “are my friends making more money than me?” or “they seem so happy spending money, maybe by saving so aggressively I’m the crazy one missing out on life.” Stop it immediately, lest you start feeling so bad for yourself that you go out and spend $400 on an iPhone 5! Remember these two simple facts:

1) They are probably not making so much more money than you are that they can afford to save as much as you are and go on nice vacations and buy expensive things. Whether they realize it or not, they are tacitly saying “I don’t mind working a few extra years so I can afford to buy every new gadget and gizmo as soon as it comes out.” Your goal is financial freedom, right? You don’t want to have to work, you want to reach the point where work is optional as soon as possible. Keep your end goal in mind – buying Apple’s latest devices as soon as they come out and going on European vacations twice a year every year will delay financial independence. But more importantly…

2) You have hundreds, if not thousands, of Facebook friends. If it seems like your friends are always spending money, that’s because they are – as a whole. At any point in time, at least a few of your hundreds of friends are going to be on vacation, eating at nice restaurants, going to concerts, and buying fancy gadgets. Because you’re always seeing posts about these extravagant experiences/purchases, it may seem like all of your friends are always spending money. But if you look at the individual walls of your friends, you’ll probably see that each individual is not always spending money.

Friends and Finances – The Frugalist

Did you have an awesome time? Did you drink awesome shooters, listen to awesome music, and then just sit around and soak up each others’ awesomeness?” Why yes, yes we did. Well, not drink awesome shooters and listen to awesome music necessarily, but we definitely soaked up each others’ awesomeness. That’s a quote from Mean Girls, but applicable here in a way completely unrelated to its context in the movie. It’s how I feel when I hang out with my frugal friends. 

How can you not bask in your awesomeness when you spend a girls’ night in playing board games and gabbing instead of going to an overpriced club? Or when you turn an otherwise pricey activity like going to the movies into a frugal night at the drive-in? When two or more Frugalists get together, it’s hard to ignore the fact that you’re just plain awesome.

I’m preaching to the choir here, I know. But just because we’re all awesome, there’s no reason we should become complacent – it’s always possible to be even more awesome. With your friend the Spender, you feel the urge to help guide her toward frugality, but with your friend the Frugalist, you’re on the same wavelength when it comes to money, so you may not feel the need to talk about it. It’s not a discussion of whether you should go out to a fancy restaurant or stay in and cook dinner – you both know where you’re going to end up eating dinner. So how can we be better?

Though we all strive to be as financially responsible as possible, we all have certain areas where we’re not doing everything we could. We also all have strong points though, and as we learn where our friends’ (and our own) weaknesses and strengths are, we can help learn from our friends’ strengths and use our own strengths to advise our friends.

Take my friend Sarah. She has strengths where I have weaknesses and I have strengths where she has weaknesses. One of my weaknesses is that I eat too fast, which means I eat too much, and that’s bad for both my health and my wallet. Sarah is the slowest eater I know. By simply eating so slowly, she recognizes when she’s full before she’s finished her whole plate. I have never seen Sarah not stretch one plate of food into two meals. When we eat together, I try to match her pace, and I always end up eating less and having leftovers. Thanks, Sarah! (But now to figure out how to remind myself to do this even when Sarah’s not around…)

One of my strengths is my housing situation, and it’s one of Sarah’s weaknesses. Granted, my extremely low rent ($500/month in the Bay Area) is due to my fiance’s frugality,* but even before I met my fiance I always made sure my rent was under $1000/month. Whether that meant sharing a house with 4 other people or finding an off-the-beaten-path apartment complex, I have always looked for the best deal possible on rent. Sarah’s rent is somewhere around $1600/month for her one bedroom apartment. It’s the one area where she is decidedly unfrugal (though that is a very typical rent for where we live). Her lease will be up soon, so we’re talking about how she can improve her housing situation. Some suggestions are to move to a neighborhood that is farther away from the ridiculously expensive city where she works, but closer to a freeway so her commute time would remain about the same, or to downsize from a one bedroom to a studio.

When you really start to get to know your friends and become close enough that you can talk about financial matters, use each other’s strengths as examples to shoot for and use your own strengths to advise your friends in areas where they may not be as frugal. And if you’re both just so perfect that there’s no way to increase your awesomeness, challenge each other to improve your health, get better results at work, or help your community. When two awesome people get together, good things can happen.

*My fiance has rented the same 3 bedroom house for about 15 years (he’s a bit older, in case you were wondering), and the house is in total disrepair due to the owner’s refusal to spend any money fixing the driveway, getting new carpets, re-shingling the roof, etc. The owner knows she would have a hard time renting the house out to anyone in its current condition, so my fiance took advantage of the situation and negotiated a lower rent, which we split down the middle.

Friends and Finances – The Poor College Student

When you’re just a few years out of college yourself, it’s to be expected that you’ll have several friends who are still in college, doing a graduate program, or are working entry level jobs and not making very much money. Man do I love hanging out with these people! They’re just as conscious about their spending as I am, so I don’t need to worry about being guilted into spending money. I do however sometimes find myself in the very unusual scenario where I am more willing to spend money than the person I’m hanging out with.

It’s an odd feeling when you realize that you’re not the most frugal person in the room. I’ve gotten so used to dealing with The Spenders of the world, arming myself against their irresponsible influences, that when I’m with someone who spends even less money than I do, I have to completely re-calibrate my mindset.

I may say to The Spender, “sorry, I can’t go to the concert, I can’t afford it.” While this isn’t really true (technically speaking, I can afford it, I just choose not to spend my money there), I had better be careful to not say this in front of The Poor College Student! Remember to choose your words carefully. As a frugalist, it gets tiring to constantly explain to people that your priorities are such that you don’t want to spend $40 on a concert ticket, even though you could technically afford it, so you often fall back on the simple line of “I can’t afford it.” While those words may make The Spender back off a bit, they may have an undesired effect on The Poor College Student. Saying that you “can’t afford” something could make you seem like a cheapskate to someone who may legitimately not be able to afford it. The Poor College Student is responsible with money out of necessity, so she will be much more understanding of your desire to be responsible about money as well. Go ahead and tell The Poor College Student that you’re aggressively saving so you can buy a car/house/start a family/etc. You may not be pinching pennies for the same reasons, but your frugality is something you have in common, so talk about it.

But also remember – if The Poor College Student invites you to go somewhere with a ticket price, it’s probably something really important to her. If her favorite comedian is in town, she might be willing to find an extra $40 in her budget to get a ticket. Though the two of you may talk often about budgeting and saving money, don’t bring it up now. She probably put a good amount of thought into her decision to buy the ticket, and already feels a little guilty about her decision. Everyone is allowed the occasional indulgence, so don’t make her feel bad about splurging on the ticket. (Now, if The Poor College Student starts splurging a bit too often, it might be a good idea to talk to her about it, but leave the occasional indulgence alone.)

But what about when there’s something you want to do that you know your friend can’t afford? You have a couple of choices. If it’s something that you really want to share with her above anyone else, consider whether you can afford to foot the bill for the two of you. Maybe the two of you agree on who the best comedian in the world is (it’s Eddie Izzard, in case you were wondering), and you really want to see his show together. If you decide that you’re able to pay for both of you, explain to her that it’s important to you to have her there, so you’d be happy to pay for her. If it’s something you could do with anyone, or something you know she doesn’t care much about, just invite someone else. She’ll probably feel guilty letting you foot the bill for something she doesn’t care much about anyway, so just avoid that situation.

I think that as a frugalists, we can have a very positive impact on The Poor College Student. We were all The Poor College Student at one point in our lives, and the moment when we got our first decent job represented a dramatic change in our financial situation. Some of us (myself included) started spending wildly as soon as we had a steady paycheck, not truly understanding how all that spending added up each month. We saw other people with jobs spending wildly, so we assumed that’s just what you do once you’re employed. But perhaps if I had an older friend who exemplified a frugal lifestyle I would have realized that I had a choice. Nobody has to have the latest fashions, nobody has to eat out several nights a week, nobody has to have an expensive gym membership. Set a different example for The Poor College Student, and you may be able to help someone start out their adult life with a mature, responsible view of money.

Friends and Finances – The Spender (Part 2)

In my last entry, I talked about Amy, The Spender who can’t afford it. Today I’m going to talk about Joe, The Spender who can afford it. Joe is frustrating in different ways than Amy, but at least with Joe you don’t have to worry that your friend is bankrupting himself.

Like Amy, Joe always buys clothes, furniture and gadgets at full price, eats out frequently, pays way too much for housing, and buys new cars too frequently. Unlike Amy, Joe is swimming in money. Not only has he received a generous sum of money from his parents, he invested it wisely to turn it into more money, and his paycheck is more than mine and my fiance’s combined. And his career will allow him to grow that paycheck very significantly over the next few years. Joe does not have to worry about money.
You can’t be too frustrated with Joe. Yes, he got a lot of money from his parents, but he’s also worked summer internships since his teens and has earned most of his money through hard work. Seriously, this guy triple majored in college. He has earned his money.

The problem comes in when you want to hang out with Joe. He lives in a very different world than I do. A world of fancy dinners, luxury cars, expensive cocktails and a whole lot of suits. The nice thing about Joe is that he knows he lives in a different world than most. If he wants to go do something expensive, he’ll offer to pay your way as well, and if you suggest a cheapo place for dinner, he’ll happily eat there. But you do start to feel kind of down on yourself after a while. You can only accept so many free rides, only bring your suit-wearing friend into a burger joint so many times before you start to feel awkward.

There are a few ways to hang out with a rich friend without feeling too sorry for yourself.

  1. Wear your favorite outfit when you hang out with Joe. You know he’s going to be wearing something expensive-looking, so you won’t feel as down on yourself if you’re wearing something similarly fantastic (but it can be your little secret that you got it for 60% off).
  2. Every now and then splurge for the nicer restaurant or the event you really really want to go to. Even though he can afford it, you’ll feel like a mooch if you let him pay for you every single time.
  3. As with Amy, there are going to be some free or inexpensive activities that Joe enjoys, so suggest those.
  4. Limit how often you hang out with Joe. Let’s be honest, if Joe feels like he can never do the things he really wants to because you can’t afford them, he’ll probably want to limit how often he hangs out with you as well. It’s really a win-win situation in this case to just hang out every now and then. You’ll both appreciate the friendship more.

Friends and Finances – The Spender (Part 1)

If you’re reading personal finance, early retirement, or dividend investing blogs, you’re probably living a frugal lifestyle. And you’re in the minority. Unless you’ve been lucky enough to find a group of people who share your enlightened perspective, you probably deal with a wide variety of financial views and habits in your friends. Today I’m going to start with the most difficult to deal with: The Spender.

The Spender pays full price for clothes and furniture, eats out frequently, replaces cars every few years, and has too much house. There are two types of Spenders – the one who can’t afford it, and the one who can. The one who can’t afford it is living with debt and always one paycheck away from financial ruin. The one who can afford it has a damn good job or inherited a ton of money. One is clearly in a better financial situation than the other, but both can be detrimental to your finances. Let’s look at the former today, and save the latter for another post.

I have a friend, let’s call her Amy. Amy just has to live in a $2200/month luxury apartment, needs to buy nice clothing and purses, needed a $13k engagement ring, and goes out to eat several times per week. Oh, and she wants to buy a $40k truck to replace her perfectly good car. I would estimate that she and her husband have a combined salary of roughly $100k. And they’re in debt up to their eyeballs.

The thing about Amy is that she doesn’t realize her entire life is a dire emergency. She thinks that this is just how people live. She sees other people driving expensive cars, living in nice apartments, carrying expensive purses, eating out at nice restaurants, and she assumes that she should be able to do it too. Of course that means she also thinks you should be able to do it too. So Amy is constantly inviting me to go shopping, go out to dinner, go to events with her. And it means I have to say no to her. A lot.

So how do you maintain a friendship with someone when you are constantly declining her invitations to hang out? The answer – it’s really hard. There are a few things you can try, but with a Spender like Amy, there’s no guarantee they’ll work.

  1. Suggest alternate outings that you know might appeal to her. If she’s an exercise junkie, suggest going for a hike. You could suggest making use of the pool at the apartment complex she’s paying way too much money to be a part of.
  2. Look for deals on what she wants to do. If she wants to go out to dinner, look for restaurant coupons to make the outing more affordable. If she wants to go to an event, look for discount tickets.
At the end of the day, you have to remember that you’re probably not going to able to change her ways. Amy often confides in me that she’s worried about her and her husband’s finances, but when I point out certain behaviors that they could change, I’m met with deaf ears. She knows she doesn’t want to be in debt, but she won’t give up her lifestyle. It’s like she’s just waiting for money to magically appear in her bank account.
The best you can do is protect yourself from The Spender’s influence and hope that one day she’ll see the light and follow your good example. My fiance and I are at our wits’ end with Amy and her husband. We’ve offered advice and set a good example. They don’t listen. They claim to have a desire to get out of debt, but they take no action to do so. In all honesty, it’s getting to the point where it’s putting a strain on our friendship. We frequently employ my above suggestions, but usually just wind up hearing about all the expensive things they want to buy while hanging out at their pool. It gets old. After a particularly frustrating conversation with Amy last night, my fiance told me he didn’t know how much longer he could put up with her.
It’s a shame when someone who you care so much about, who is a great person with a huge heart, is so incompatible with you. If you aren’t able to resist the temptation to adopt her lifestyle, you must stop hanging out with her immediately for your own protection. If you are, keep trying the above suggestions until you reach the point where you’re so frustrated with her poor choices that every time you see her you want to wring her neck. Then it’s probably time to take a step away from the friendship.
What do you think? Do you have any friends who are Spenders? How do you deal with them? Do their habits ever tempt you to stray from frugalism? Have you been able to help them change their lifestyle at all? Can you fight the urge to wring some sense into them? Have you been able to make such an imbalanced friendship last for the long run?