Recently, my twin sister told me I was a money hoarder. She said this because I’ve been (trying) to save almost all of my paycheck. I rarely buy new clothes and I’d rather eat at home then go out. I’ve been living at home since I graduated college and I really want to use this time in my life when I have almost no expenses to save money.
My sister, on the other-hand, has an opposing view. Since we have relatively few expenses from living at home, she doesn’t see a problem with spending the majority of her paycheck every week. This made me realize that my spending and saving habits are a lot different than that of my friends.
Should you be frugal in your 20s?
My friends tend to spend their money more freely than I do. Most of my friends make more money than me, but have fewer dollars in their savings. Many of us went to state schools so we’re lucky enough to have relatively few (or no) college loans. Our opinions about what this means tend to differ.
My Friends Views on Saving
Weekend Spending – Weekend spending is not something to worry about. If you want to have fun then you have to spend money so just let loose and spend. While my friends do try to pick more inexpensive places to go out to eat or have drinks, it’s a rare weekend that they stay in.
Clothes - My sister spends the majority of her paycheck every week on clothes. She loves shopping and will spend as much as $300 a month on clothing. This seems crazy to me but I can’t say I mind when she comes home with beautiful clothes that she lets me wear.
Travel – My friends like to travel, mostly on ski-vacations and within the region. A bunch of my friends are planning a trip to New Orleans for Mardi Gras. My friends don’t really worry about the price as they focus on how much fun the experience will be. Being frugal isn’t really a concern.
Bank Account Worries – They don’t have them. Basically, since the majority of my friends live at home (so no worries about groceries or rent) they don’t see the problem with spending until their bank account is really low. Having less than $100 on the day before their next paycheck is not rare.
My Views On Saving
Weekend Spending - I hate to spend more than $50-$100 a weekend. I don’t think it’s necessary to spend more than that to go out and have fun. This is something that my friends don’t understand as they feel I’m being too stingy.
Clothes – I don’t buy clothes very frequently. I have to say this is partially due to the fact that my twin sister buys so many. I really don’t have to spend money on clothes because we’re the same size and she lets me borrow hers. Still, even if I couldn’t borrow her clothes, I would be less inclined to go shopping. I only go to the mall when I know I have money to spend so I don’t buy things I don’t need (even if I may want them).
Travel - I love to travel and I do tend to spend the majority of my savings on trips. I have gone to Costa Rica and really want to travel abroad to other countries. At this point in my life, I think that investing in experiences is more important than clothes, entertainment, or other material items.
Bank Account Worries – As little as a few weeks ago I had saved $3,000 of my $5,000 goal to travel to Europe. Unfortunately, in the last few weeks I totally blew through my bank account! I had three friends’ birthday parties to attend that included staying in hotels, buying gifts, as well as going out to dinners, and to clubs. I spent almost half of my savings and now only have $1,600 in my bank account. I refuse to ever have less than $1,000 in my bank account because this is my emergency fund. The fact that I spent so much money seriously stresses me out but my friends say I should be happy I’ve saved as much as I have.
My friends and sister believe that now is the time to have fun since we don’t have any “real” responsibilities. We don’t have children, car payments, insurance bills, or any real debt. Even though I see their point, I’m still very focused on saving my money. I want to make sure that if there is a problem I can cover it or if there is an opportunity I really want to explore, I can. So who’s right?