When Sandy Smith’s stepfather lost his job during the Great Recession, she found herself supporting multiple 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. She kept a binder of coupons and let her friends know what deals to check out, bought her clothes at Walmart, plugged the holes in her shoes with cardboard, and skipped vacations for years while her friends traveled.
Her experiences led Ms Smith, 48, to start a personal finance website called Yes I Am Cheap in 2008.
“There’s definitely a negative connotation with being cheap, and that’s why I embraced it,” Ms. Smith. “Don’t even play with the word frugal — I’m cheap,” she said. “I had to be.”
She started a Facebook Messenger group among her close friends, an annual Zoom sleepover to set financial goals, and quarterly check-ins to discuss their finances. Mrs. Smith has gone from being $200,000 in debt to having a net worth of more than a million dollars. Friends who initially thought she was “out of her mind” now come to her for advice.
A friend like Mrs. Smith can change the financial future of not just a close group, but a wider social network. Networks spread behavior—a concept called social contagion—but some members of a group, such as those with more education and those most connected, can shape what the herd believes and does more powerfully. A 2024 study by the National Bureau of Economic Research, for example, found that the more connections you have with people who earn a high income, the more likely you are to invest and save.
“No one should be surprised that people are affected by the economic decisions of those around them — even indirectly,” said Nicholas Christakis, the Sterling Professor of Social and Natural Sciences at Yale, who also directs the university’s Human Nature Lab. “You’re influenced not only by your friends, but 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 trial published in Science in 2024, he and his colleagues showed that behavior spreads more effectively in a community when it is introduced through well-connected people.
Because copying others is effective, and actually a good strategy most of the time, said Dr. Christakis, we evolved to use the people around us as models for behavior. Each person can act as an influencer within his or her group of friends, making more responsible financial decisions that affect people the influencer has never met. And every social member you recruit to your beliefs and actions increases the likelihood that they will be adopted by everyone, for better or for worse.
“While I pride myself on being a thinker who studies this phenomenon, I also find myself sometimes making stupid decisions,” he said. “I look around and say, ‘Well, everyone else is doing this. I should be doing it, too’.”
Dr. Christakis wouldn’t recommend simply ditching friends because of their bad financial habits, but he relates it to the way Alcoholics Anonymous uses social networking 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,” said Dr. Christakis. “It would be useful for you if you got a new fellowship.”
Becoming the thrifty friend
Jill Sirianni met Jen Smith in St. Petersburg, Fla., when she lived and traveled 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 particular bar they were in because it had free parking and offered free shots at sunset as they tried to pay off their own $78,000 debt in two years.
“We became fast friends because we found this safe space to be able to talk about money,” Ms. Sirianni, 36,. She added: “We were able to do fun things together knowing that we had this common or similar financial goal.”
The two friends started a podcast, “Frugal Friends,” and wrote a book together, “Buy What You Love Without Going Broke.” Mrs. Smith said cutting her expenses to pay off debt 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 enjoyed a marriage of weekend trips, sushi dinners and coffee shops. After she paid off her debt, the friendship picked up again with a moderate level of frugality, with cooking together or the occasional takeout.
These days, with two children under 10, Ms Smith navigates mothers’ groups. Recently, when she was outnumbered and entering a well-established friendship culture that wasn’t of her own making, she found herself going to a mom dinner that ended up costing about $75 more than she wanted.
“They’re newer friends, so it’s not like I felt comfortable saying, ‘You know, sorry, I wrote a book about how to spend money and so that’s not my vibe,'” she said. “You also have to navigate social norms when you try to go against the grain.”
Having a friend who followed a similar financial path helped normalize a more frugal lifestyle and a sense that she wasn’t the only one, Ms. Sirianni.
“It was almost a badge of honor to say, ‘I got this for free,’ or ‘I got this used,'” she said.
Mrs. Smith says social media reinforces the mirage of what is normal.
“Everybody looks at the same things on social media and thinks this is how every group of friends works: We’re going to brunch, we’re going on vacation together, we’re having a $6,000 bachelorette party,” she said. “Now it’s just perceived normalization and it just takes a small act of bravery to change things.”
She suggested limiting your scrolling intake, adding more personal connection and curating your feed to people you actually have a relationship with or those who influence you toward more financial stability.
She relates the consumer culture of a group of friends to a flowing river. It’s easiest to flow with it, while just standing still can feel scary, let alone trying to change the flow.
“But I think on the other hand, there’s a lot of reward and a lot of self-understanding, problem-solving, creativity that can be implemented,” she said.
Mrs. Smith suggests being vocal about your bigger goals, like trying to pay off credit cards, as well as the time frame it will take you so your friends understand it won’t be forever. She and Ms. Sirianni suggest not turning down invitations, but adjusting them to a cheaper option, such as inviting people over.
“If they respect you, they will respect that you have a goal that you want to achieve,” Ms. Smith. “They will come to some kind of compromise if they really want to be in a relationship with you.”
Finding real community
Sandy Smith, of the Yes I Am Cheap website, suggested that people who felt self-conscious about spending less could make quiet changes, such as lowering the frequency with which they get certain services done or lowering the quality of products they buy.
“You prioritize what makes sense to you and you adjust elsewhere,” Ms. Smith said, discouraging black-and-white thinking about frugal versus normal. “There’s a whole lot of nuance out there, and the worst thing I think I’d want someone to do is cut to the bone, and then look back and regret not having done anything.”
But she said she didn’t regret the choices she made to cut expenses, including not seeing family in Jamaica for years, because the hundreds of dollars for a flight seemed more important to spend on a bill.
“I feel, especially these days, that everything is a luxury,” Ms. Smith. She described her group of friends as solidly employed and taking vacations that aren’t too extravagant.
“Nobody wants to be the person on the budget, watching paychecks and stuff, but if you’re lucky, there’s that one person in the friend group that kind of reins it back in, and I’m that person,” she said.
