When Sandy Smith’s stepfather lost his job during the Great Recession, she was forced to support several family members and two households.
Her family, who emigrated from Jamaica, had always been frugal, but to make her budget work, she became a “crazy personal finance person” to her group of friends. He kept a coupon binder and told his friends what deals to check out, bought clothes at Walmart, covered holes in his shoes with cardboard, and skipped vacations for years while his friends traveled.
His experiences led Smith, 48, to start a personal finance website called Yes I Am Cheap in 2008.
“There’s definitely a negative connotation to being cheap, and that’s why I embraced it,” Ms. Smith said. “Don’t even let me play with the word frugal: I’m cheap,” she said. “It had to be.”
He started a Facebook Messenger group among his close friends, an annual Zoom sleepover to set financial goals, and quarterly meetings to discuss his finances. Ms. Smith has gone from being $200,000 in debt to having a net worth of over $1 million. Friends who initially thought she was “crazy” now come to her for advice.
A friend like Ms. Smith can change the financial future not only of a close group but of a broader social network. Networks spread behaviors (a concept called social contagion), but some members of a group, such as those with more education and those who are more connected, can shape what the crew believes and does more powerfully. A 2024 study from the National Bureau of Economic Research, for example, showed that the more connections you have with high-income earners, the more likely you are to invest and save.
“No one should be surprised that people are affected by the financial decisions of those around them, even indirectly,” said Nicholas Christakis, Sterling Professor of Social and Natural Sciences at Yale, who also directs the university’s Human Nature Laboratory. “You’re not just affected by your friends, but also by your friends’ friends and your friends’ friends’ friends, people you don’t even know.”
Dr. Christakis has conducted research and experiments on the spread of obesity, smoking, and even altruism through relationships. In a randomized controlled study published in Science in 2024, he and his colleagues showed that behaviors spread more efficiently through a community when they are introduced through well-connected people.
Because copying others is effective and, in fact, a good strategy most of the time, Dr. Christakis said, we evolved to use the people around us as role models. Each person can act as an influencer within their group of friends, and the most responsible financial decisions affect people the influencer has never even met. And each social member you recruit to your beliefs and actions increases the likelihood that everyone will adopt them, for better or worse.
“While I pride myself on being someone who thinks for myself and studies this phenomenon, sometimes I also find myself making stupid decisions,” he said. “I look around and say, ‘Well, everyone else is doing this. I should do it too.'”
Dr. Christakis wouldn’t recommend simply getting rid of friends because of your bad financial habits, but he relates it to the way Alcoholics Anonymous uses social media to encourage sober behavior.
“If you find that you have really bad financial habits because all your friends have terrible financial habits, that can reinforce what you’re doing,” Dr. Christakis said. “It would be helpful for you if you had a new community.”
Become the frugal friend
Jill Sirianni met Jen Smith in St. Petersburg, Florida, when she was living and traveling in an RV to cut expenses and pay off her $60,000 debt. During their first meeting, they bonded over the fact that Jen Smith, 37, and her husband had chosen the same bar they were at because it had free parking and handed out free drinks at sunset, while trying to pay off their own $78,000 debt in two years.
“We became friends quickly because we found this safe space to be able to talk about money,” said Sirianni, 36. He added: “We were able to do fun things together, knowing that we had a shared or similar financial goal.”
The two friends started a podcast, “Frugal Friends,” and co-wrote a book, “Buy What You Love Without Going Broke.” Ms Smith said cutting her expenses to pay off her debts gave her clarity in her social life.
During her two years of intense frugality, she saw much less of one of her best friends from college, who was enjoying married life with weekend trips, sushi dinners, and coffee shop dates. After she paid her debt, the friendship recovered with a moderate level of frugality, cooking together or occasionally taking out meals.
These days, with two children under 10, Ms. Smith navigates mothers’ groups. Recently outnumbered and entering a well-established culture of friendship that she had not created herself, she found herself attending a mom’s dinner that ended up costing about $75, more than she wanted.
“They’re new friends, so it’s not like I feel safe saying, ‘You know, I’m sorry, I wrote a book about spending money, so this isn’t my vibe,’” she said. “You also have to navigate social norms when you’re trying to go against the grain.”
Having a friend who walked a similar financial path helped normalize a more frugal lifestyle and the feeling that she wasn’t the only one, Sirianni said.
“It was almost a badge of honor to say, ‘I got this for free,’ or ‘I got this secondhand,’” he said.
Smith says social media enhances the mirage of what is normal.
“Everyone looks at the same things on social media, thinking that’s how every group of friends works: We’re going to lunch, we’re going on vacation together, we’re having $6,000 bachelorette parties,” she said. “Now there is only a perceived normalization and it only takes a small act of courage to change things.”
She suggested limiting scrolling consumption, adding more in-person connections, and curating your feed for people you actually have a relationship with or those who influence you toward greater financial stability.
She relates the spending culture of a group of friends to a flowing river. It’s easier to flow with it, while standing still can be scary, let alone trying to change the course of the flow.
“But I do think that, on the other hand, there is a lot of reward and a lot of self-understanding and problem-solving and creativity that can be implemented,” he said.
Ms. Smith suggests expressing your biggest goals, such as trying to pay off your credit cards, as well as the length of time it will take, so your friends understand that it won’t be forever. She and Sirianni suggest not declining invitations, but adjusting them to a less expensive option, such as inviting people.
“If they respect you, they will respect that you have a goal that you want to achieve,” Ms. Smith said. “They’re going to come to some kind of compromise if they really want to have a relationship with you.”
Find a real community
Sandy Smith of the website Yes I Am Cheap suggested that people who feel inhibited by the need to spend less could make quiet changes, such as reducing the frequency with which they obtain certain services or reducing the quality of the products they buy.
“You prioritize what makes sense for you and accommodate other aspects,” Smith said, discouraging the black-and-white thinking of frugal versus normal. “There’s a lot of nuance out there, and the worst thing I think I’d want someone to do is cut to the bone, then look back and regret not doing something.”
But he said he has no regrets about the decisions he had made to cut back, including not seeing his family in Jamaica for years because the hundreds of dollars for a flight seemed more important than spending on a bill.
“I feel like, especially these days, everything is luxury,” Smith said. She described her group of friends as solid employees and taking vacations that aren’t too extravagant.
“No one wants to be the budget person who keeps an eye on paychecks and stuff, but if you’re lucky, there’s one person in your friend group who kind of keeps an eye on everything, and I’m that person,” she said.
