My friend Leif over at FiveYearFIREescape.com was kind enough to submit this guest post about how he keeps his friends while being frugal at the same time. Without further ado, take it away Leif!
Honey, we’re doing it. We’re making a budget, we’re tightening our spending, and we’re finally paying off our debt. Oh, but tonight I gotta go out with the guys. Don’t worry. I’ll keep it frugal…I think.
I like to think of myself as a pragmatic, thrifty guy. I know how to save, I know how to invest, and I consider myself good with money.
But until recently, it would all go down the toilet when my friends and I would go out. You see, my friends are not the saving types, and they don’t comply very well with my super-saving-lifestyle.
But I can’t dump them. I love those guys.
Luckily I developed some special techniques to stay frugal AND keep my friends.
And today, I want to share these with you!
But first, who is this guy??
I’m Leif and my wife and I retired a couple of years ago and started a blog about finances for busy people.
We got there with some saving and normal investments and we keep it up because we still have some amazing goals (that’s important for this process).
Finances. Those are the lessons I like to share on my blog, and Ryan likes to share on his. But I didn’t tell you the best part:
I’m a time-freak. I have kids, hobbies, and used to have a job. So after watching so much time slip away, I became a bit time-obsessed. The upside is now everything I do is overly time-efficient, and I judge everything by returns and time absorption. So with that in mind:
…Back to our time-eating, money-spending friends:
If you’ve made a commitment to get your bank account into shape, you should start paying attention to where you spend your money. And I wouldn’t be surprised if a lot of it is spent on going out for drinks or dinners with your buddies.
It’s not their fault. Going out for dinner and drinks is both fun and a normal thing to do (unlike epic levels of saving). Even if you try your darndest to keep the bill small, you still somehow spend fifty bucks at the end of the night.
I have a degree in physics. I made a computer simulation of a night out with friends, and with 99.99966% certainty, it is mathematically impossible to spend way less than those around you.
So what do we do? Well, it seems like we have two options:
Option A – I deserve to go out.
Hey, I get it. You work hard, and you deserve to blow off some steam at the pub or take your in-laws out for dinner, right?
But you know what else you deserve? The peace of mind that half your paycheck isn’t just going to interest debt. You deserve an emergency fund. You deserve to have some money for investing and creating new sources of revenue. That’s what you deserve.
How do those nights out compare to a financially-free future?
Okay, so then there’s…
Option B – I can’t afford that.
So the other option is to start dodging these outings altogether. I’d rather stay in, guys.
Soon, your friends will start having their inside jokes that you won’t be a part of, and in no time you’ll be declared as that lame guy who never goes out. The worst of all the things to be!
Once upon a time, I had a friend who always said. No, I can’t afford that. But as I say, he was my friend once upon a time since he eventually just vanished. I wonder how it all worked out. He certainly doesn’t have a finance blog! (Do you, Dave??)
What? Those are my only options?!
The truth is, you should be able to have fun. Financial freedom isn’t about sitting around at home, counting your stacks of dollar bills. AND you shouldn’t have to find a whole new group of friends just because you decided to take control of your financial situation.
My wife and I didn’t want to start bumming people out, so we came up with a way more inspiring alternative.
So can you get the best of both worlds?
Bring your friends into your goals
We don’t use that negative talk. “I can’t” isn’t part of our vocabulary. We bring our friends in on our plans and get them to be our cheerleaders. We dish all about our plans (kind of, you’ll see later). Most importantly, we share why this is a big deal to us.
We’re excited. They’re excited. Everyone’s happy and positive.
And then we drop our go-to phrase (This is a version of a power phrase that we use all the time…it’s amazing).
Not today. We’re saving up for a ___. How about we get together at our place and I’ll tell you about it? We’ll cook stir-fry, you bring the beers.
Our power phrase to stay frugal
Let’s break this down.
1 – Say no. After you say no, don’t waiver.
Don’t fall to pressure, because then you are screwed next time you try to say no. Be strong; you’re doing it for everyone!
2 – Remind your friends of your super goal (remind…not surprise)
Tell them about the motivating thing you want that’s better than dinner. They’ll say, “com’on, it’s just a couple of beers – that won’t move the needle.” It’s not about the beers; It’s about being in control over where your money goes. Besides, remember my computations? Drinks WILL BE expensive.
3 – Offer up something that works for everyone:
There are tons of frugal options for today’s activity. My favorite is a dinner party. It’s like a normal party but for grown-ups! Plus, if you’re cooking, it’s cheap!
And as a pro tip, share a goal your friends and family could relate to and get excited about with you.
If you tell them you’re trying to save a million dollars to build a real estate empire because you read about it on a blog, you won’t get much buy-in. (Although I do have a guide on how to become a millionaire as an average person if you want).
But saying that you’re saving up for a vacation to Barbados with your family (a motorcycle, Burning Man tickets… whatever) will get some serious street cred.
So here’s what happens next.
The response will be awesome!
One of the reasons we like this phrase is that it’s pretty badass but not threatening. Like we are mafiosos of saving.
People respect commitment and cool goals especially if you present it with energy.
I mean when that friend bummed everyone out with his – I can’t afford it – no one really respected that. On the other hand, no one is going to call me lame for wanting to go to Thailand with my kids for two months.
They’ll say “wow how can you manage that?! I don’t have that money!” (Seriously, while they are trying to spend it they will be confused about how they could have more. Which takes me to my next point).
Prepare to see a change in your friends.
That’s right. You’ve shown them the light. They’re now inspired to have goals, a mentor (you!), and have the tools to actually pursue them. Look at you, motivating everyone to take control of their finances over here!
Prepare for a sign of relief
That’s the thing about offering an alternative. I’m pretty sure your spendy friends are relieved to get to bring an eight dollar bottle of wine instead of going out for a hundred dollar dinner. Everyone wants to save money, but they don’t really know how. They haven’t learned to navigate their habits and these tricky social situations that seem like a conspiracy against their bank accounts.
So that’s it? The end of fun?
Congrats! Now you can stop going out? Is that a great success? Almost.
You can now say NO to your friend on demand, but you can say YES too! You’re in control, and I recommend you break the savings mold every once and awhile. What’s life without a little financial pain? Just be sure to keep it down to the minority of the time.
AND go big when you do go out. Message everyone. Drink a lot (at someone’s house) and have some fun. That way, everyone will certainly remember your participation! Your scarcity can make your attendance alone an event!
Even when we go all out, we keep the bill under control by pre-drinking. I know it sounds a little bit like we are still in school, but it works! This may be my biggest takeaway from college.
But come on, drinking at your house is way cheaper. Have a couple at home and you are pretty much saving money when you go out!
Just in case (Another weird trick if you are having issues):
Pretend you’re on a diet. (Pretending not necessary.)
This is like double conviction. When you’re on a diet you have free reign to refuse almost everything.
I know. Sometimes people on diets are annoying, so just give everyone a 1-2 punch with a power phrase “no, not this month I’m ___ so I can ____” and just carry on.
Just remember that you deserve to have dreams for you and your family and you deserve to have financial stability. And if you share this with your friends and family, it becomes that much easier to go for what you really want.
What about you, has peer pressure ever made it hard to stick to your frugal goals and what have you done about it? If you visit me at FiveYearFIREescape.com, I’d love to hear your story.