The Heavy Price Of Frugal Living

Ava and Adam brushed off the first Venmo request.

The Brooklyn couple, who asked to go by pseudonyms, had been invited to a house party by one of Adam’s close work friends, Steven.* Before the party, they got a text from Steven: “Hey, if you’re coming to the party, please Venmo me $20-$25 or more so we can get everything we need. There’ll be tons of food and drink.”

Ava and Adam, who are both in their 30s, thought it was a strange request — especially knowing Steven made more money at his lucrative job than the two of them combined. But they sent Steven the money anyway and hoped for the best.

“We would be like, ‘There’s going to be a ton of food there; we’ll go [to the party] hungry; we’ll see a bunch of people; it’s going to be really fun,’” says Adam. “But we’d go to these parties, and there would literally be a pack of Oreos, a bag of SunChips, and a table full of liquor.”

They noticed patterns as the invites continued. Steven sent reminder texts asking for money up front, sometimes four or five of them. After one party, he let everyone know he’d collected way more than he needed but didn’t offer to give any of it back. He usually asked people not to bring their own beverages, saying he didn’t want his fridge full of six-packs he’d never drink — and then didn’t offer any alternatives to alcohol.

“It’s crazy to be like, ‘Don’t bring your trash; I know what’s good,’” says Ava, who’s sober. “For me, navigating being in social situations and not drinking, normally it’s a totally [understandable] thing. … Let me bring my LaCroix and not make a big whoop out of it.”

The last straw was when Steven invited the couple to a dinner party at his house. Along with the requisite Venmo requests, he asked his 10 or so guests not to bring any additional food. “Just Venmo me for the dinner,” the text said. Ava, who’s a chef, usually brings a dessert or side dish when she’s invited to friends’ homes, but Steven insisted.

“We got to the party, and there was a tray of lasagna, a small thing of tiramisu, and some liquor,” Ava says. “I know it didn’t cost you $200 to make a lasagna.”

Given high inflation, ubiquitous student loan debt and ever-climbing housing costs, it’s a reasonable time to be budgeting. But what happens when someone’s desire to be thrifty turns them into a jerk? A 2017 Bank of America survey found that 53% of people said they’d seen a friendship end over money. Some respondents offered examples of lending people money and never getting it back; 40% would end a friendship over $100, for example.

For Ava and Adam, their experiences with Steven have been enough to let the relationship fizzle out.

“It confirms for us that the joy of hosting is getting all the people you love together to make memories, have a laugh, enjoy a meal,” Adam says. “[Asking yourself], ‘How much do I need to charge for this so I don’t lose money having my friends over?’ That’s not cool.”

Extreme saving can also impact family dynamics. Jeremy and his wife, Julia, a Brooklyn couple in their 30s, don’t see their frugal relative very often. But when they do it’s “the absolute worst.” (They agreed to be interviewed on the condition of anonymity.)

Ryan,* the partner of Jeremy’s cousin, is a savvy investor who’s planning to retire at 35. He refuses to chip in for much of anything — family-style dinners, supplies for get-togethers, even drinks for casual hangouts — which Jeremy and Julia attribute to his brazen financial goals. Now that they’re engaged, Jeremy’s cousin follows suit.

“If you’re penny-pinching over a few dollars, f*ck off.”

“He doesn’t drink very much, and neither does his fiancée. When they have people over, they’re like, ‘Oh, we have water,’” Julia says. Planning family events requires extra work from everyone to “rearrange the whole thing” around what Ryan will shell out for.

“If you’re going to penny-pinch because everyone owes $50 and you owe $43, that just makes it way more complicated [for everyone],” Jeremy says. “If everyone owes $50 and you owe $6, that’s a different story. But if you’re penny-pinching over a few dollars, f*ck off.”

Neglecting social courtesies in pursuit of financial freedom can clearly leave a bad taste. It’s a common criticism of FIRE, or the Financial Independence, Retire Early movement, which encourages a lifestyle of extreme frugality and vigorous saving. The popular blog and podcast How to Money cautions against FIRE-ers sacrificing time with friends and family to cut costs. And ongoing research from the international business school INSEAD suggests that early retirement can itself be isolating without peers in similar circumstances.

“Often entrepreneurs are obsessed with building their ventures, so they end up neglecting key relationships at home,” says Bala Vissa, professor of entrepreneurship and family enterprise at INSEAD and one of the research authors. “[Later], an important issue is often repairing close relationships.”

In Jeremy and Julia’s case, friendship with Ryan is a lost cause. “Whatever real deep relationship we would have had with him is sort of precluded by all this,” Julia says.

But frugal living doesn’t have to damage relationships, says Tanja Hester, the author of the 2021 book Wallet Activism: How to Use Every Dollar You Spend, Earn, and Save as a Force for Change. After years of intentional saving, budgeting, and investing, Hester retired from her job in political consulting at age 38. Now 44 and based in north Lake Tahoe, California, Hester says she and her husband considered the impact of their financial plan on friendships at every step.

“We didn’t cut out stuff that felt important. It’s not like we said, ‘I won’t come to your wedding because I’m not spending money on travel,’” Hester says. “We didn’t want it to isolate us socially, and we knew that would be very possible.”

Hester says she managed to save money and maintain her social relationships by proposing alternatives to more expensive gatherings, such as hosting dinners for friends at home rather than going to a restaurant, pivoting to low-spend holidays, or spending time outdoors with friends. Most of the time, Hester says, other people will be relieved at the opportunity to hang out for free.

She also suggests being mindful of how you explain your budget priorities, making it clear that you aren’t judging loved ones for how they spend their money. And if you do make plans that involve spending: Don’t try to cut corners, like skimping on the tip.

“That’s a bad look and guaranteed to hurt relationships,” Hester says. “I firmly believe in a ‘don’t be an *ssh*le’ rule.”

*Names have been changed to protect sources’ privacy.