Rich friends cost $$$
Halibutboy Flatface stashed this in Money cash
According to sociology professor Juliet Schor, it is actually true that having richer friends leads to less savings! You can read all about it here:
A quote from the article:
"My husband moonlights as a financial coach and many of his clients are young people who are very successful and have a level of wealth that they didn't grow up with and are trying to figure out what to do with it. One of his key pieces of advice for people in that situation is to keep their old friends, because your level of consumption changes so fast if you start hanging out with other similarly high earners, and all of a sudden you don't have much in the way of savings from your big salary. You're just consuming more, and your financial situation is actually not much improved."
So is the rule of thumb that you'll end up spending as much money as the people you spend time with?
Yeah, consumption grows as your peers' consumption grows. Let me put it this way: if you and your buddies normally go out for a pizza-and-beer night every month... and then you get a chunk of change and start dining with people who choose a 4-star white-tablecloth restaurant... even if you only pay your whack, you'll end up spending a lot more. If they turn out to be even a little bit better than you at playing the "you pay today, I'll pay next time" game, you could end up paying a LOT more.
I don't usually have money, but when I do, I like coercing others to spend theirs too.
Well maybe you should change that. Coerce your friends to save with you instead.
You know what Lil Kim says: why spend mine when I can spend yours?
You got me!
Geege all it takes is a little practice. The more you save the more you want to save!
Who have you been talking to, Adam?! :)
Savers, Geege. Savers!
I've struck that healthy balance between parsimony and YOLO!
I really envy that, Geege. I've always had a hard time spending on myself, but 4 years in the trenches as a starving entrepreneur and single lady in the burbs have left me a complete lunatic! There's basically nothing to spend money on here even if I were so inclined, except for phenomenally expensive real estate and we have a Target on the other side of town if you need to buy socks or something.
On the other hand, I was at a startup in San Francisco the other day... and thinking, Wow these kids are fresh out of school and they think NORMAL LIFE is catered organic lunches every day and going out for $17 cocktails every night with your friends while wearing lovely designer clothes. How are you going to tell young people to stay home and eat leftover spaghetti if they see that kind of luxury as the baseline?
Gads. How do you tell a kid with stock options they need to set aside for a rainy day?
Eat some now, save some for later.
i have definitely noticed that i spend more money when i hang out with my wealthier friends. and it's no good at all! i don't feel comfortable having them pay for me, but i don't roll at their level. i used to tell one of my couple friends that they were "hijacking me with luxury" every time we'd go out, but in the end, since i was always paying my own part, i discovered they were just driving me to the poorhouse!!
if you can't run with the bog dogs, stay on the porch!
Emily, what you're saying is very relatable.
I've been through similar situations too.
Like you, I've learned from it and now I'm less likely to agree to such "hijacking me with luxury" situations.
Something you see a lot here in Silicon Valley is people who make a lot of money... but then they end up hanging out with people who make even MORE money, and then they feel poor and discontented. It's sort of a disease.
Plus, how good is a friendship if you can only get together when doing something spendy? My best times have been with people who I can just watch football on TV with, or camp by the side of a dirt road with, or have espresso-drinking contests with. Not that we don't blow money on occasion (hey laaadies!) but it isn't the be-all and end-all of our friendship.
Totally agree that the best of times are often just hanging with my homes.
I work with young broke social workers who are (suddenly not mysteriously to me!) happy! Compared to *their* cases they're doing great!
yes to all of it!