Image courtesy of Mykl Roventine

This is what one of my friends recently told me. I've known her for over 15 years and we rented an apartment together a few years ago. This is the same friend that would bring home bags of stuff she didn't need just because it was on sale (she worked at a mall). This is the same friend that gave me an $8 bad check to pay her portion of the water bill. Needless to say, my friend makes bad choices with her money.

Yesterday morning, I was sitting down on the couch with my Sunday paper and a nice cup of coffee when I get the following text message from her:

: Good Morning. Will you buy me an Ipod?

Me: Good Morning. No.

That's mean. Ok a MP3 Player.

: No. Do you want me to lie to you or tell you the truth?

Her: Always lie. LOL.
Sorry, that's not me. One lie turns into many more lies.

Her: Penny Pincher :-(
: Yep, this economy sucks.

: Like an Ipod will break u.

: No, an iPod won't break me. It's the principal.

: Well how much are they?

: I think you can get a cheap one for $49.

: I think I'll go get one of those.

: You sure about that? You were just having problems paying your gas bill.

She called me last week almost in tears because her gas was about to get disconnected and she needed to borrow the money for a couple of days. I told her no because she has borrowed hundreds of dollars from me in the past and never repaid the money.

Her: I can pay my gas bill. I only needed to borrow the money for a couple of days. I can handle my own business.
: Yeah, if you could handle your own business, you wouldn't be asking me for money.

: Whatever, it's paid now.

: Ok, but you still just don't get it do you?

There is nothing to get. My gas bill is paid.

What I'm trying to say is that you need to put a little aside so when that happens again, you won't need to call anyone or stress about it. Once you have a little money set aside, you can then enjoy those little luxuries.

Ok, if I had a little extra, I would. I live paycheck to paycheck. I have expenses, blah, blah, blah. I don't make as much as you do. If I did, I would be able to save. I live way below my means so stop preaching to me about saving. I know what needs to be done, I just can't.

At this point, I was pretty tired of hearing this from her. We've had this discussion many times before and it always ends the same way.
She has asked for my help in the past to get her money together. We've sat down before and completed a budget together. She stuck to the budget for about 15 minutes.

Saving money is not rocket science and it is not about how much you make. Saving money is about making sure that your expenses do not exceed your income. It could only be $5 a week or it could only be $5 a month; every little bit helps. If you aren't able to save money on your current income, you need to increase your income. If you can't increase your income, go through your expenses with a fine tooth comb and find things you can get rid of. I think if you were to examine the budget of 10 people, I am willing to bet at least 8 of them would be able to find additional money to save.

Do you not make enough to save or are you not willing to give up certain non-necessities in order to save?

What are your thoughts? Do you agree with that last statement?

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  1. Anonymous // March 16, 2009 at 7:41 AM  

    Wow, you must be really nice to still be friends with her; I don't know if I'd be able to keep up a friendship with someone who would ask her friends to pay her bills and buy her things after spending all her own money on frivolous things.

    My current income definitely is "not enough" for me to be satisfied about it and keeps me constantly looking for ways to increase it. I co-own a small business with my sister that has suffered a lot in the last year, but we've cut out almost all unnecessary expenses and have managed to save more than we did in the previous year.

    I agree that there are always ways to save more; we're very frugal, but I know there are things we can do differently to save even more if we think hard enough about it.

  2. Anonymous // March 16, 2009 at 7:48 AM  

    Wow, this is an excellent article about saving. I have a brother that is the exact same way.

    He never asks to borrow money but he is always having money problems. You tell him to save some money and he agrees. Then the next thing he is buying season tickets to sporting events.

    He uses a car for a business but he never takes the earnings from the business and puts it aside to save for when the car breaks down.

    For him it isn't an earnings issue it is a spending issue.

  3. Anonymous // March 16, 2009 at 10:44 AM  

    Sounds like she has serious boundry issues. Unless she addresses those issues she'll stuggle with her finances. At her going rate, she promises to make soneone a lousy wife one day.

    Not really meaning to be so harsh but those were my initial (and unfiltered) comments. I'm certain she is a great person in other areas but based on this slice...

    Also, like the new look!

  4. Anonymous // March 16, 2009 at 11:39 AM  

    I do believe it is possible to have so small an income that nothing can be saved.

    Your friend will probably always land on her feet. I know someone like that. It would be frustrating to dwell on that person, since everything she does is contrary to "the right thing", yet she gets away with it. And even gets rewarded - she inherited a 1.5 million dollar estate including a home, but had to move out due to not paying the utility bill and having utilities shut off. She moved back in after a few weeks, but is near the point of having lost everything she gained less than two years ago.

    It's a game to me to see how many expenses I can cut. When I get mad at something, like an extra tax, I "overcorrect" and cut expenses somewhere else in an amount higher than the tax. Even though I've always thought there was nothing left to cut, there always seems to be a way to spend less.

    Our utility company offered a 5% discount on lower usage than in previous years. Because I've always used as little as possible, I did not expect to get the discount and did not try. I used all the heat I wanted this year. Then I got my bill, and I had used less than my prior 3-year average. I actually have no clue how that happened, but I got the discount.

  5. mye // March 16, 2009 at 11:52 AM  

    i can relate to the situation because i am having the same dilemma with my husband. i can't make him understand that we should tighten our belt for the time being since we are paying a lot for amortization, electric bill and the kids necessities. yet, he still wants to have unnecessary items like gundam kits and tools which are too expensive! with the justification that he is not loitering at some place else but at's stressful.

  6. Anonymous // March 16, 2009 at 1:03 PM  

    You know what, i battled this for a while myself and it did not make sense to me.

    But I was finally able to get it when i committed myself to aggressively pay down my debt.

    I did this by actually keep the same income and cutting down all my unnecessary spending.

    So it is very possible and necessary in any situation to cut down costs.

  7. Anonymous // March 16, 2009 at 1:48 PM  

    She better be hot to put up with that BS. :P Personally I am a big fan of always having an FU fund. I love the idea that if a boss eventually starts being to much of a jerk, it is always easy for me to say, FU.

    The relationship changes considerably when your employer realizes he no longer holds the strings over you. Oh, you have that fat mortgage payment? Better make sure you do real good or I can fire you... Go ahead, I can live a long time without a steady paycheck, can you?

    Just my 2 cents (1.5 with inflation now)

  8. Amel // March 16, 2009 at 2:20 PM  

    Gee...having a friend like that must be tiring...she needs to get herself together and start saving money!

    I agree that saving money is crucial, esp. in times like this. When we were in such a tight budget, whenever I needed clothes, I would go to second hand shops. I've got some second hand clothes which are still good even after wearing them for 1,5 years! :-)))

  9. Anonymous // March 16, 2009 at 5:23 PM  

    I agree that if a person has a 40 hour a week above minimum wage job, that they should be able to find a way to save something each month.

    Right now I am into week 6 of being laid off from my job, and have yet to receive any unemployment income. Luckily, before I was laid off, I had a part-time job (5- 8 hrs/wk) for min. wage which I now am doing 15 or 16 hrs a week.

    On what I'm bringing in right now, No, I can't save anything. In fact, unless I get the UI benefits paid soon, I will have to start eating into my savings by mid-April, perhaps May.

    My expenses are only: rent (utilities included), insurance (car/renters/Cobra), cell phone (no land line), internet, gas and food.

    It galls me to think about the day I have to reach into my car savings or my house downpayment savings or eventually my actual EF -- but at least they are there, right?

  10. Anonymous // March 16, 2009 at 8:39 PM  

    Hey, I save money but I still can't afford an iPod. So let me try...

    Will you buy me an iPod?

    An MP3 won't do. It HAS to be an iPod. Oh yea, and at least 8GB.

    Please and Thank You. ;-)

    Sounds like ole' girl needs a friendly kick in the arse!

  11. Anonymous // March 16, 2009 at 9:09 PM  

    Hmm... Well I do believe it's possible to have an income so small you can't save. That said, its' rarely the case.

    Hell, my husband and I are living on $3100 a month combined and still have money to pay down our debt. Of course, we don't own a house, but it doesn't sound like your friend does either. And we have to pay $502 a month for my husband's insurance!

    Even so, we are paying for a few items that we could pare down if absolutely necessary. Like Blockbuster Online. We use it a lot and it's our main form of entertainment. But we could cut it if we had to.

    Because of health problems, we can't even work full-time jobs, so getting second jobs isn't an option. But we make sure to live within our means so that we can get out of debt some day.

    Even if/when my husband's unemployment runs out, we can live on the leftover $1700: After rent & insurance, we'll have about $500 a month to live on for food/utilities/medications. There won't be much (if anything) leftover at the end of the month, but we can live on it.

    So I just don't buy most (healthy, employed) people's proclamations that they can't make enough to save money. Usually it's just that they have classified luxuries as necessities.

  12. Anonymous // March 16, 2009 at 11:03 PM  

    I completely agree with you. I have a friend just like this. Drives me crazy. She is a very good person but financially we are like polar opposites. She smokes (sorry but for health and money terrible idea), sports new clothes all the time yet constantly is fending off creditors or complains to me she has $20 until payday. I refuse to lend money in my adult life therefore our friendship remains intact but she drives me crazy! I actually suggested to her she buy rolls of quarters to use as an emergency fund because she just spends spends spends! She has already declared bankruptcy once, 7 yrs later she bought a brand new car and 2 months after that asks me if she should sell it as she is having trouble making the payments! When will they learn.

  13. Jackie // March 17, 2009 at 3:01 PM  

    We save and we have one daughter who is very good with her money. But, our other daughter is always having money problems and she is an Asst. Professor.

    So we simply did as you are doing. While she was still in school we would help her out. she always paid us back.

    But, she is an adult now, in her 30's, much more educated than we her parents, so she doesn't even ask us anymore.

    I think at some point you simply have to draw a line with everyone if they are wasting money.

    She could stop going to the movies every week and also buying videos every week.

    That would pay at least one of her utility bills I know.

    Great post and thanks for dropping in on me even while I was formerly in protest!!

    Have a super day!!:-))))

  14. Anonymous // March 17, 2009 at 3:53 PM  

    By loaning her money you were, IMO, just enabling her to continue leaning on other people and avoiding confronting her money management issues. Geez. She really was pushy and presumptious.

  15. Anonymous // March 18, 2009 at 12:12 AM  

    I think it's *mostly* always possible to save a bit of money.... of course, if you're already living below the poverty line (defined differently in different countries) you really may not be able to save. In other words you'd have necessary/vital expenses coming up sooner than your savings could sit tight as savings... it would be like trying to breathe underwater or something. I'm not sure what the monetary level would be.

    I started investing in my first year of university, with amounts like $40, just to get my feet wet. I didn't have to pay commissions or fees to do it, either.

  16. Anonymous // March 18, 2009 at 12:14 AM  

    But I should also note that I was able to start those investments because of the student loans the government gave me, which helped bootstrap me up. I was working 27 hours a week, too. But the loans were necessary.

  17. Anonymous // March 18, 2009 at 1:41 AM  

    I think your friend is like a lot of young people out there who honestly don't understand the value of hard work and money. All they see are the ads and others with stuff and want to be the same. Once upon a time, the middle class saw BMW's and fancy clothes and were in envy, now the middle class goes out and gets them without hesitation. I like to think of it as an iPod Society.

  18. Sharkbytes // March 18, 2009 at 2:15 AM  

    I SO have friends and even family like this. What's the smily for rolling eyes?

  19. Anonymous // March 18, 2009 at 7:09 AM  

    I agree with you. In my experience the only thing a higher salary has meant was higher expenses. I've always kept an uneven ratio of income to expenses. Things have recently changed and I'm putting my life back together. Thank you for sharing the article. I never asked people for money, I had pride mind you, but that person is me. If I couldn't have had the iPod like your friend wanted I would have charged it.

  20. Anonymous // March 18, 2009 at 7:15 AM  

    I am trying to save up enough money to buy an Xbox 360 before Halo 3 comes out, but I don't think I will be able so save enough money for it. If the Xbox itself costs $400 and Halo 3 will probably cost around $60. I found out I make about $416 a year in allowance, so I will make around $247 by then, not nearly enough. Also, some of that has to go toward buying clothes.

  21. Anonymous // March 18, 2009 at 10:53 AM  

    I agree with all you said. If you don't earn much, check out your expenses and if you earn much, don't overspend your money with the things that you don't need. Better save up for the rainy days.

  22. Anonymous // March 18, 2009 at 2:23 PM  

    Your friend seems a little high maintenance. Why bother?

    Sounds like you are doing what you can but some people are just stuck, or think they are. If she knew she had the tools to get unstuck, she would. But this is something she has to do for herself...sadly...

  23. Grandy // March 18, 2009 at 10:54 PM  

    Interesting. I was only introduced to Dave Ramsey a few months back, via the "Total Money Makeover". Before that, I was always wondering where the money went myself. It's been an interesting journey figuring it out.

    Your friend doesn't get it. I never did. I get it now.

    I hope she does soon. It's never too late.

  24. Mara // March 19, 2009 at 1:40 AM  

    I have a friend who's like that and she's already getting in my nerves. I keep telling her to stop buying things she doesn't need just because it looks pretty or it's on sale or for whatever superficial reasons so that she'll stop ranting about not having any more money right after spending way much.

    I hope your friend would get how important and necessary saving is sooner rather than later.

  25. RyansDad // March 19, 2009 at 4:55 PM  

    I want to take it a bit further... how about when people say they dont have any money at all? Yet, you see them puffing away on cigerettes that you never see them without. How could they save money? Or how about the people that dont have money or any food? Yet, they just picked up a sandwich from some fastfood place. They wanted to lose some weight, but they dont want to give up the fastfood or go to the gym.

    I do agree that it can be hard to save money with a small income. Its about willpower and determination. If you cant save, can you at least try and stretch your money out and spend wisely? Dont just be spender or money blower. Look for ways to expand your income, but not your spending. RyansDad

  26. Anonymous // March 19, 2009 at 5:26 PM  

    Some less-than-necessary purchases are a quality of life issue. Not saying this is how it is with your friend. But all work and no play, etc. If that relatively cheap iPod is enormously useful, then go for it, even if this means not saving that $50. Sounds like your friend, though, is just being frivolous.

  27. Anonymous // March 21, 2009 at 1:56 PM  

    Interesting, just shows you should never lend money to friends unless you want to get rid of them. Paycheck to Paycheck is a known way to failure.

    You should take people asking you for money as a good thing. That means your doing something right!

  28. Anonymous // March 21, 2009 at 3:31 PM  

    I think there's a difference between not making enough to be able to save and just not managing your money well. I think your friend clearly falls into the latter category. For some people, they spend the absolute least they can and find every bargain possible, but there just isn't enough money at the end of the day. That's a tough spot to be in, and the smart ones just keep at it until they're out of their situation. Others give up and decide "Well, if I can't pay the bills anyway, I might as well go get that sweet new iPod so I have something fun in my life."

  29. Anonymous // March 21, 2009 at 7:07 PM  

    I know lots of people who "don't make enough to save" yet they always seem to have new stuff. These same people usually "don't have time to mess with coupons". Although I think it is possible to earn so little you can't save, most people do not fall into this category. There is almost always some unnecessary expenditure that can be trimmed. Even if you just put aside the money you save by using coupons, and save that.

  30. Anonymous // March 22, 2009 at 10:52 AM  

    Sometimes I feel guilty of this crime but I have learned much lesson though when I checked on all I bought and found I only need 20% of it.the rest was junk.

  31. Anonymous // March 22, 2009 at 5:44 PM  

    Good article.. tough message. It's hard to have these conversations with people you care about.

  32. Anonymous // March 25, 2009 at 2:39 AM  

    There are some people in this world who genuinely do not earn enough to save without serious sacrifice. Many of them live in third world countries.

    Many people of this opinion though, are rather mistaken. As my mother puts it, money burns a hole in their pocket and if money is available, it's available to be spent. Budgeting is something you do when attempting to deprive yourself (much like "dieting") not something you do to reach your goals.

    I actually posted on my blog earlier this week about 20 little things people spend their money on to fill out their available spending money (and which really add up over time!) to the point that they think they don't earn enough to save.

    Great post!

  33. Anonymous // March 27, 2009 at 6:27 PM  

    Have you nailed her yet?

  34. Anonymous // March 30, 2009 at 2:31 PM  

    I'm just curious why you would be friends with this leach.

    Ugh - time is valuable too. You seem too spend too much on telling her you won't loan her money.

  35. Jan // March 30, 2009 at 8:39 PM  

    Good post. I'd suggest referring her to the post I just saw on Tim Ferris' blog about Ramit Sethi's new book The Psychology of Automation: Building a Bulletproof Personal-Finance System at It was brilliant!

    This is a system that could work to help people like this who need the money out-of-sight, out-of mind!

    Good stuff for all of us!

  36. Kate // April 2, 2009 at 10:22 AM  

    You bring up a really interesting point here-- sometimes we think we don't make enough to save because our savings goals are simply unrealistic. Although some of us obviously don't make enough to stash away hundreds of dollars a month, it's all about starting small and training yourself to become a saver. Simply put, harnessing The Power of Small is the key to getting yourself on firm financial footing. Even if you start by making the commitment to save, as you said, just five dollars a month, it adds up and you'll end up with more than you had when you started!

  37. Jennifer @ Money Saver 101 // April 5, 2009 at 12:20 AM  

    Man oh man! Typical, right? I love that. There was a time when I felt like the poorest person of all our friends. Everyone had a nicer home, a nicer car, and nicer clothes. They went out all the time, and I believed it must be because they made more money than we did.

    Then folks were complaining about their credit card debt, some were filing for bankruptcy, while others couldn't pay down their car loans. We were fine. Our lifestyle didn't change one little bit, and suddenly we were the richest people of everyone we knew.

    You get where I'm going with this?

  38. Good Credit // April 9, 2009 at 9:01 PM  

    Hmm, great article right to the point, its not rocket science... It can totally be hard to stay with your goals with people like that in your life. Those with such money skills in my life know that I have unbreakable boundaries when it comes to spending, and they can moan and complain all they wish, but when it comes down to it, I am moving towards my financial goals, whereas they keep relieving their same financial dramas over and over. Its unfortunate, but like you said, its not rocket science but a little bit of personal discipline to cut these expenses. Thanks again!

  39. fake rolex watches // April 25, 2009 at 1:10 PM  

    You may try placing the money monthly in certificates of deposits . However , I'm not sure what the minimum requirements are in India. Some people place their money in a number pool with people you trust .

  40. Anonymous // September 25, 2009 at 3:25 AM  

    Yeah, I feel you. I am related to a lot of those types of women. In my case, I cannot avoid it because I see them day in and day out, and all they talk about it money money money. And when they do end up getting a job, they still ask me, but I lay it straight with them. No.