Sandy Smith embraced the label of being ‘cheap’ out of necessity. During the Great Recession, when her stepfather lost his job, Smith found herself supporting multiple family members across two households. Originally from a frugal Jamaican family, she adapted and became known as the ‘crazy personal finance person’ among her friends. She utilized binders full of coupons, purchased clothes from Walmart, and even plugged her shoes with cardboard to make ends meet. Meanwhile, her friends continued to travel, choosing experiences over savings.
In 2008, these experiences led her to create the personal finance website, Yes I Am Cheap. ‘There’s a negative connotation with being cheap, which is why I embraced it,’ Smith explained. ‘I needed to be cheap, and I owned it.’
She established a Facebook Messenger group with her close friends and initiated an annual Zoom pajama party to set financial goals. This was followed by quarterly sessions to discuss finances. Smith, who was once $200,000 in debt, now boasts a net worth exceeding a million dollars. Those who initially thought her methods were unconventional now seek her financial wisdom.
“Networks spread behavior – a concept known as social contagion.”
A friend like Smith can significantly influence the financial futures of not just a close-knit group but also a broader social network. Networks have the potential to spread behavior, and some individuals in a group, particularly those with more education or resources, can exert a profound influence on the group’s beliefs and actions. For example, a 2024 study by the National Bureau of Economic Research highlighted that having connections with high-income earners increases the likelihood of investing and saving.
Nicholas Christakis, a Sterling professor at Yale and director of the university’s Human Nature Lab, commented, ‘It’s no surprise that people are affected by the financial decisions of those around them – even indirectly. You’re influenced not only by your friends but by their friends and their friends’ friends – individuals you might not even know.’