I’m not naturally frugal, so when I’m outside of my comfort zone I tend to revert back to old habits. Spending money socializing is one of my weaknesses. Well, among many others.
I know the counterargument is that your friends and family are worth spending money on. Supposedly, if your friends matter to you then you should spend money on them or around them.
But I don’t think it’s the spending money which is a reflection of my feelings. It’s that I make time for them, hang out with them, and stay in touch with them.
Spend Money for Selfish Reasons
I feel that I when I spend money socializing it’s really just an excuse for me to spend on fine dining and cocktails. Shit I wouldn’t do for myself, otherwise.
Or if I don’t see my friends often enough I will tell myself that it’s okay, I only see my buddy every once in a while, it’s not a big deal to spend the money.
Spending is Contagious
Yawn at the table and it’ll go around like an STD. Spend money in a social setting and everyone feels the pressure to do the same.
It’s how we connect to each other as the social creatures we are. We feel more comfortable following the crowd than doing something that’ll make us stand out.
It goes both ways. When one couple doesn’t order any food, I feel comfortable just ordering a coffee.
Because I’m not inherently frugal, if I don’t go out with a budget I’ll spend whatever my friends are spending.
Sometimes I tell myself, alright Dr. Mo, you only gonna drop a 20, and that’ll be more than enough for you to eat something and hang with your friends.
I’ll even carry cash with me for such events.
But it’s not a firm budget and so it inevitably fails. I created a guideline for myself but never committed to it. I haven’t worked up the courage to stick to it.
The worst thing we could do is not see our friends because of the financial pressures of socializing. Just because I can’t curb my spending habits, I shouldn’t miss out on great conversations, fun friends, and building by connections.
Our village – our social network of friends and family – should be made up of people who support us emotionally, spiritually, physically, and financially if we hit rock bottom.
But I also don’t want to feel financially anxious when friends ask me to socialize.
It’s on me to set a solid enough budget that I can stick to. And I owe it to my friends to take my priorities serious enough that it doens’t interfere with my friendship.
As I’ve gotten older I have grown more tolerant, thank dog. Because each of us has different priorities. And I don’t want to be in a position to judge my friends – especially not their spending habits when socializing.
I have friends who are barely getting by financially but they spend like rappers; they live for those fancy experiences. They will choose the fanciest restaurants and order way more food than any of them can finish.
Those friends are out at a nice restaurant to enjoy the ambiance and experience, but they are also there because they want to see me. And they get a secondary joy from me enjoying what they are experiencing.
Exactly because I respect their priorities, I want my priorities respected. But I can’t expect my friends to blindly say yes. There is always a little push.
Over the years I have learned to enjoy these clashing priorities with my friends. It’s these little arguments or disagreements which bring us closer as friends; emotions and conflicts which in the past I would run away from.
Sticking to a Budget
Those of you who have been following me the past few years know that I went from being a big spender to radical frugality. I was spending on only the bare minimum.
In 2013 I realized that I wanted to get rid of all of my debt and fast-track my retirement accounts. A priority which resulted from seeing the writing on the wall – that my career wasn’t always going to give back to me what I was putting into it.
I had to (I wanted to) set a strict spending budget to get to that goal. Easy for me to do because my goal meant more to me than a $25 plate of dead chicken.
But it wasn’t an easy transition for my friends. My friends didn’t change, I did. So it was on me to bring them along and buy into my new lifestyle.
My Social Thermostat
When I suddenly transformed I went from driving a Hummer to a Smart Car. I went from big baller to a hobo.
I adjusted my social thermostat but needed to still bring my friends along.
I lost a couple of friends because of it. One said that I was being cheap because I didn’t want to travel with him. Another said that if I was willing to spend money on a gym membership but not money to get drinks with him, that I was selfish.
But my other friends got it. They would all get together, order their food and I’d join them towards the end of their meal and order a drink. Or meet up with them afterwards for drinks.
With other friends I started meeting up at the gym to rock climb or go on a hike instead. My core friends in San Diego, we’d meet up Saturday and Sunday mornings to go surfing and grab a coffee afterwards.
Doctors and Spending
Physicians tend to dine lavishly and buy fancy gadgets and drive the newest cars. Why are we that way as a group?
Each of us thinks that we are unique snowflakes and that our gastronomical tendencies are unique to us. That only we genuinely appreciate the sexy curvature of a German car. Or that our Iceland vacation is a destination we came up uniquely on our own.
In fact, most of us doctors behave and live very similar lifestyles. We own homes in rich neighborhoods. We drive German cars, Priuses, or Teslas. Send our kids to expensive schools. And each child has 24.5 different afterschool programs they are enrolled in.
Choice of grocery stores – Whole Foods and Sprouts.
Vacation destinations – Europe or expensive tropical resorts.
Choice of clothing – Channel, boutiques, and Lululemon.
Exercise – yoga, pilates, skiing, and personal trainers.
So we spend. We spend for our pleasures. We believe that we need that kind of spending in order to enjoy our lives. Maybe so.
I’ll argue that we don’t need to own fancy homes to live satisfying lives in the US. We don’t need to live on pill-hill. We can drive old, reliable beaters. We can sweat in unbranded, sustainable clothing doing yoga at home, as much as in a fancy downtown yoga studio.
We can make amazing food in our kitchens and socialize with friends in a park, on a beach, or going on a hike.
My biggest poverty mentality back in the day was:
..who cares about $10 or $20 here and there… not like I’m buying a new car every year or live in a $1m house…
It’s the small spending that keeps us in poverty. Rarely is it big budget items, because as physicians we aren’t wealthy enough to be flipping cars every few months.
I was maintaining my negative net worth in $20 increments. A drink here, a dinner there, filling up the tank, dessert, socks, a $7 bar of chocolate… whatever.
Many MD’s are Broke
Most doctors are broke. Feel free to disagree. Most of us have a net worth below zero. Some of us are positive by maybe $50k. We truly are impoverished as a professional group when you look at our cumulative income.
We don’t look it, no, because we mask it. We act ghetto fabulous, as the kids say.
We have $450,000 in student loan debt, $875,000 in a mortgage and a Tesla lease but we’re buying $1,500 purses, enjoying $100 dinners, and buying $8 lattes.
5 Reasons to be Frugal
For myself I have identified a few reasons to be frugal. Your priorities may vary.
Much of our spending leads to garbage accumulating in landfills and in the ocean. It leads to the death of poor, dark skinned people who slave away to guarantee low cost production.
Spending money socializing – the way we do it in our society – is rarely sustainable.
The world would be better off with more of us practicing intentional poverty.
The orchestrated chaos of agreeing on a restaurant, commuting to it, waiting for a seat, choosing a dish, figuring out the payment splitting model … that takes away from the headspace many doctors desperately need.
When we’re in debt, when we’re stressed about dollars, spending money socializing eats into that headspace.
When it comes to the logistics of living there is only 1 factor which separates all of us, it’s money, it’s currency. The person living in the downtown high rise has it, the one living in cardboard box doesn’t.
For centuries humans have traded their free time for money, working their way towards an arbitrary age 65 for retirement.
I retired at age 38. I bought my freedom because of frugality. And I’m not the only one. If the freedom of time is an attractive concept it’s up for grabs for you as a physician.
And once you’re financially independent, you no longer have to be frugal for the sake of accumulating wealth. When you have enough dough to retire, saving for retirement is done with. Which is why budgeting in retirement is so easy.
When I’m in debt, when I’m stressing about money, when I’m trying to juggle my 50-hr work-week and my bikini wax appointment I can’t make much of an impact on the world.
It’s when we get ourselves to a place of financial stability and to career freedom, that’s when I can do amazing things for my community.
When I’m constantly thinking about money, worrying about money, and juggling bills, I’m living a paycheck to paycheck life. It’s hard to grow meaningfully as a human being in that kind of setting.
Frugality – healthy frugality, not being cheap – is the opposite of financial obsession.
I want to be a responsible citizen of the world. In some countries, like Spain, it’s easier to avoid excess consumption. Frugality is the norm there.
In the US we have come to associate spending with wealth. The opposite is true. To be a true stuart of your society, to be a responsible citizen of your economy it’s not enough to go vote.
Voting or educating ourselves on politics is a false of sense of security, with little return from the invested effort. I want to live in my economy instead of just off of it.