It’s Friday night and everyone’s trying to wind down from the work week with a dinner out with some friends. And maybe it’s Steve’s birthday, like, next week so everyone wants to go to a bar after. And did you hear about that sweet new Froyo place that opened up? Have to go check it out. But our buzz is running out and so it’s on to another bar before finally heading home. Sound familiar to any of you frugal folk?
A bit of an exaggeration (only a tad), but I think that many of you have been here before.
Learning about frugality was something that just made sense to me. It wasn’t really that big of a stretch for me to cut down on extraneous expenses. Like not buying a meal every Wednesday night at bar trivia. Or not ordering a beer and just drinking water. I don’t really like any beers and I don’t enjoy getting drunk enough to warrant putting up with it!
Eventually, though, I felt as if I had a real problem. There were many times in which I avoided going out with friends because I didn’t want to drive and use the gas. Going out to bars was a frequent activity I turned down because of the pressure to either buy myself or friends drinks. After they had bought a round themselves. Any time a social activity came up that required even a minute amount of spending I was immediately looking for reasons NOT to go. That’s a ridiculous way to live.
I felt like I was trying to “keep up with the Joneses” in a way to appease my friends. The last thing I wanted to do was have to avoid spending time with them because our spending habits differed.
I knew I needed to make a change and fast before I started actually losing touch with my friends. And over something so inherently selfish. My brother was the first one to really suggest to me about setting a ‘fun’ budget. A subset of my monthly cash-flow that I would designate myself to spend on ANYTHING. While for the most part this was designed for social expenditures, it also doubled as a splurging budget. Maybe I really wanted some new video game. Maybe I wanted to buy some new parts for my bike. Whatever the item and whatever the reason I could spend it without worrying and then stash the rest at the end of the month.
This was a good start, but it still really didn’t save me completely. I was still trying to optimize my spending and maximizing how much I was saving from the fun budget every month. I’d give myself a pat on the back for not using the fun budget at all! I was right back at the beginning.
It was then that I really reflected upon my goals for FIRE entirely. While I didn’t feel like I was sacrificing any real experiences with how I was living, it was more about how I felt like I was treating my friends.
Was I working on living a frugal life or a cheap one?
There were a couple of Reddit posts that I had read which sparked my change in mindset. Namely this one about building the life you want and then saving for it. The philosophy is pretty straightforward. Many FIRE folks start out with an inherently similar purpose. For many it’s a way to get out of a job they hate. I started out in a similar way, even if I don’t actually hate my job. I just know that I’ll never be truly content as a worker bee.
The main takeaway is that we shouldn’t be pursuing frugality as a means to get away from something, but to move towards something instead.
Bring in the Anti-Budget
Things for me right now are pretty uncommon and downright lucky. I have many privileges that I shouldn’t take for granted. I:
- Have no debts.
- Live with my parents.
- Started my FI journey relatively early. I just turned 25.
As a result, however, it’s very hard for me to plan out what my future life will look like from a financial point of view. I can’t accurately estimate my expenses without knowing what it’s like to pay for a good chunk of some of the most expensive items.
Because of this I’m able to max out my 401k, my Roth IRA, my HSA and fully invest in my ESPP. On top of that, I can still drop a nice chunk of cash into my taxable brokerage at the end of the month as well. After all of this investing I should be DAMN confident in my future. Reflecting has given me clarity on what I want my life to look like.
The best part is that I know I’ll be able to get there VERY quickly even if I’m not full on sprinting towards it. As such, I’ve stopped obsessing over every dollar I spend and just allow myself to spend for ‘fun‘ at will. Don’t let this confuse you, though. Spending freely doesn’t mean spending without thinking. I still look to get the best deals I can in a given scenario and ensure I’m buying high quality things. I’m not, however, going to beat myself up over something like an extra side of fries anymore.
Jessica from TheFioneers makes a great note about how she and her partner manage their expenses using this same idea. They keep better tabs on it with a fixed percentage, but it’s the same concept. In my mind it’s the best way to stick to your guns about how much you want to invest. It enables you to reach your goals at a pace you feel comfortable with. It allows some much needed wiggle room for learning new hobbies, having great times with your friends, and building your ideal life style. When I eventually have a true set of expenses to track I will likely move to being more rigid, but until then I’m going to let it ride.
Leader Not a Follower
Another way I’ve helped avoid unnecessary expenses is by trying to be a person who actually makes plans. I mentioned before that often times my friends will just say “Hey let’s go to X Bar”. It’s not because they only know how to drink at a bar and don’t know how to buy their own alcohol. It’s mainly because that’s just the DEFAULT thing to do. Auto-pilot might be great for investing habits, but it can be extremely detrimental to spending habits as well.
By becoming one of the do-ers you can allow your group to get their weekly recommended dose of fun, while remaining frugal all the same. It’s impossible NOT to save money when you’re doing something that keeps people engaged and away from overpriced activities! It’s one of the reasons I took up DMing a Dungeons and Dragons campaign for my friends. What’s great is that most people are inclined to trying new things, but just don’t have the drive to plan them. It might be a bit more effort on your part, but if you truly believe in reaching your goals you’ll make it work. In the end, it’s beneficial to everyone in the group so I highly recommend giving it a try.
Balancing frugality with friendship will be an eternal struggle, I believe. As long as you have friends who are spendy, you’re going to be battling with yourself to make good financial choices. As with all things, though, enough time and experience should ease the journey. Who knows? Maybe after hanging out with you, your friends will begin to see the light themselves and take after you! Let me know if you have any ideas for improving and maintaining relationship with not-so-frugal friends! I’d love to hear other’s experiences.