Frugal friends and how to find them

Friendships can be priceless but fostering them doesn’t have to come with price tag.

  • By Julia Carpenter,
  • The Wall Street Journal
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Friendship has always called for some maintenance costs.

Whether it is going to a concert of your favorite band or trying out a new wine bar in town, hanging out with friends sometimes means opening your wallet. But in a world where birthday parties for milestones might cost hundreds of dollars and prewedding festivities often come with a price tag, those hoping to stay frugal can have a hard time.

“Back in the day, I’d have friends who had nice cars, who’d buy things, and I somehow got tempted to buy those things,” said Allan Liwanag, a Maryland business analyst and personal-finance blogger.

After climbing out of more than $40,000 of debt, Mr. Liwanag and his wife got more serious about their cash flow. Now, they don’t just avoid keeping up with the Joneses. They include “hanging out” as a line item in their budget and prioritize spending time with friends who adhere to a similar lifestyle.

“I make sure I associate myself and my family with those who have the same mind-set as me: a frugal mind-set,” he said. “My friends are of the same mentality, so it’s easier for us to be frank with them and have fun with them, without having to shell out a ton of money.”

Mr. Liwanag and his wife allocate $100 every two to three months to parties, nights out with friends and other get-togethers. They leave some wiggle room in case they go over the target occasionally.

For those who’d rather avoid spending a lot of cash on friendship, Mr. Liwanag found that age-old advice about finding a spouse applies here too: Pick the friends with similar financial values.

Sonya Lutter, professor of personal financial planning at Kansas State University, says Mr. Liwanag’s approach is common.

“We tend to try to find someone who is similar to us in that ground, financially and otherwise,” she said.

Prof. Lutter’s research has found that arguing about money is a strong predictor of a couple’s likelihood of divorce. A central idea in her research—that satisfaction with money predicts happiness in marriage—can also apply to friendships. Because financial values are important in both friendships and marriages, Prof. Lutter said, diverging views about money will affect the relationship.

“I’ve definitely seen that just in my personal life with friendships: People will stop hanging out with each other if another friend starts wanting to go on extravagant vacations and the other person can’t afford it—it’s definitely going to influence that friendship.”

Jonah Berg-Ganzarain, a 22-year-old publicist, said he has experienced this dynamic after moving from Boston to Chicago, where his peers, according to his estimates, spend between $250 to $300 a week on going out with friends.

“Already I can kind of feel the pressures of just different things: birthday parties, going out to network, hanging out,” he said. “I know some people who have pretty big friend groups and they go to five or six of these things a week.”

A majority of Americans say they have around five close friends, according to a 2004 poll from Gallup, and Americans spend on average an hour socializing on weekend days, the American Time Use Survey found.

But it is harder to measure exactly how much Americans spend on socializing. The average American millennial household spends close to $2,500 a year on the broad category of “entertainment,” which can include everything from movie tickets to out-of-town trips to gym memberships, according to consumer-expenditure data from the Bureau of Labor Statistics.

Research shows most Americans make their closest friends at school and at work. Finding new friends in a new city as an adult, some say, can be difficult and costly.

Rachel Bertsche, an author living in Chicago, chronicled her yearlong adventure making friends in her 2011 book “MWF Seeking BFF.” Ms. Bertsche went on 52 friend dates and spent around $1,300 to establish a friend network in a new city.

Now, she recommends people give and look for cues when they’re first “dating” a new friend.

“As you’re getting to know people, you’re slowly picking up on their attitudes about a variety of things, and money is one of those things,” Ms. Bertsche said.

If someone then suggests a night out at a fancy restaurant, that is a good time to bring up your own ideas for a different (aka cheaper) hangout, she said. Responding with “That would be so great for a special occasion” or “Maybe we could try making one of the dishes at home” is a cue to the other person.

Sometimes, finding a frugal friend is about being in the right place.

Jen Smith and Jill Sirianni, hosts of the “Frugal Friends” podcast, first met at a beach bar in St. Petersburg, Fla. Aptly enough, they bonded over a low-cost activity: The bar they chose offered free parking and free shots at sunset.

The two chatted about why they loved doing free things, how they were on respective debt-repayment journeys—from there, their friendship blossomed. Mrs. Sirianni and Ms. Smith don’t always balk at spending money on socializing. They aspire to balance free activities with costlier celebrations.

Ms. Smith said she often finds friends through free activities. “I knew the people who wanted to do the free things were going to be my people: free movie screenings or walks around the farmers market and going to the beach.”

Mr. Liwanag, whose blog is called “The Practical Saver,” said one important aspect of making frugal friends is being open and vulnerable about money. The bonus of frugal friendships, he said, is bonding over financial decisions.

“The money topic is not taboo,” he said. “We talk when it comes to money. It’s not something to be shy about. You say, ‘Hey, we’re spending so much on food. How were you guys able to do this?’ You share knowledge and experiences in that way, and you’re able to bring down costs.”

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