Don't Underestimate The Power of Networking

Saving Money Tip #196 - Don’t Underestimate The Power Of Networking. We all know the saying “the rich get richer and the poor get poorer.” Part of that is due to networking. The more you know, the more doors open up for you and the more money you make or save. A prominent lawyer may give some legal advice to a family friend who happens to be an orthodontist. The orthodontist in turn may do some orthodontia work for the lawyer’s daughter for free or at a discount. Or maybe, there isn’t a formal exchange of services. A stay at home mother may be on the steering committee for a community project and works with some movers and shakers in town. The movers and shakers let her know about a job opportunity that has opened up that she'd be interested in. While the sole purpose of having friends, networking, and having a social circle isn’t so you can get things for free or make money, it is a side benefit that should not be underestimated.

This networking happens on all levels of society, but the rich seem to benefit the most since they receive the most costly benefits. In the upper middle class a doctor might be hobnobbing with a building contractor, giving him some medical advice while the builder puts an addition on his home for a discount. While in the working class, a nurse who is friends with a construction worker might “open up a door” to get the construction worker a doctor's appointment that has the longest waiting list in town.

No matter the socioeconomic levels, however, we can gain knowledge, save money, or earn money by opening ourselves up to networking opportunities. Volunteering at your child’s school may give you the chance to meet another parent who paints murals for a living. As an acquaintance of hers, you may get a discount. Being in a mom’s club may allow you to be friends with women in your town you wouldn’t have otherwise met. Through them you may learn the best plumber, the cheapest tailor, and the most reasonable lawn service in town. Offering to work in a community garden may allow you to meet other gardeners who share their produce with you. Making dinner for a sick neighbor may turn around and benefit you when her daughter becomes your babysitter.

Again, the purpose of this networking shouldn’t be just to receive things. You must give as well – your time, your friendship, or your knowledge. And in return you may get a job, get a discount on goods or services, or receive some free advice. Don’t discount networking.

In Real Life (IRL) – In my former, single life in another state, I was a pretty social person. I had a large circle of friends, and they were all professionals. At the time I didn’t think much about it. But looking back, it came in quite handy. A good friend of mine was a computer programmer, and a darn good one. He came over many times to fix my computer and give me advice on some programming classes I was taking in graduate school. The cost of that help would have been pretty hefty if I brought my computer in for repair and hired a tutor. I also had a friend who was a dentist who once was able to give me some dental advice, saving me the expense and inconvenience of a dental appointment. I had another friend who was a doctor who wrote me a prescription once when I was feeling way too ill to go to the doctor’s office. He later gave me two epidurals (for free!) when I delivered my children in his hospital. He’s a handy friend to have! We didn’t necessarily do an even exchange of services. In some cases, I have only offered my friendship in return. Other times I have given financial advice and relationship advice or at least a listening ear. In fact, I never really thought about it as networking as these folks were my friends. But, they actually became my friends through some social networks.

In my current married life, I am not as social, as I am mostly busy with my children. But I do have mom friends who I see on a fairly regular basis. Most of us are out of the working world so we don’t necessarily “talk shop” so much or exchange professional services. But I have helped list items on eBay or Craigslist for several moms and have notarized documents (I am a notary) for free for members of my Mom’s Club. Doing these kinds of favors makes me feel more comfortable asking for help when I need it. And I’ve gotten some baked goods or small tokens of appreciation for the help I’ve given. As I try to analyze how some people are able to keep expenses low and save money, I realize more and more how networking and socializing benefit people. For other tips on saving money, check out Frugal Fridays.

Find Like-Minded Friends

Tip #64 - Find Like-Minded Friends. The road to financial independence is not always an easy one. Especially if you have had poor spending and savings habits in the past. Trying to change those habits into ones where you are cutting down on consumption, putting away for the future, foregoing entertainment, and shopping sales can be difficult at best. And it's even harder if all of your friends are still holding on to their expensive habits (whether they can afford it or not).

If you and your three mom friends are used to going out to a pricey children's play place every week, it's going to be difficult to bow out of going if you don't find somewhere else to go. And if you and your husband are accustomed to Saturday night dinners out plus the cost of a babysitter, it will be hard to stay in with nothing to do. And if you are used to walking into the mall and buying something you want whether you can afford it or not, it will be hard to control yourself to wait until it goes on sale or not buy it at all.

To make this change in lifestyle easier, it's best to find people whose financial goals are similar to yours. I'm not saying to let go of your other high-spending friends - just to spend less time with them or find cheaper things to do with them. By finding friends who are also trying to save money, you will not only have people to do things with at an inexpensive price, you can pool resources and gather ideas. And it doesn't have to be any less fun. There are plenty of great restaurants, events, discount stores, and at-home activities that can be had for low-cost or even free.

So how do you go about finding these thrifty friends? Well, I think the first place to start is among your current group of friends. I think you can approach them one of two ways. If you are not embarrassed (and you shouldn't be!) to tell them that your family is trying to save money, then you can suggest doing some cheaper activities - going to the park with no admission instead of the indoor play place that costs $10 per child. Or checking out the new thrift store that just opened in town instead of going to the mall. (Shopping at a thrift store can be just as much -or more! - fun than shopping at the mall.) Or inviting them all over for a cup of coffee rather than going to the coffeehouse. Coffee for 4 people at home is still probably cheaper than for just yourself at a coffee shop.

If you don't think that most of them will react well to your announcement, then you can try to figure out which one or two of them appear to be tighter with their money. And you can ask them separately to join you for some inexpensive activities. Hopefully, you will be able to find a like-minded person or two among your current group. And if you are lucky, maybe your newfound thriftiness will spread to all of them.

If that doesn't work, then I suggest going to these cheaper venues on your own, with your spouse, or with your children. If you start shopping at yard sales every Saturday, you will often see the same people over and over again. Maybe one of them has a child your child's age with whom you can suggest getting together. If you start going to the playground, again, you will often see the same people. Listen to conversations around you or start some yourself regarding the consignment sales that are going on this weekend. See who bites. Offer to switch off with a family you know in the neighborhood for babysitting. then your Saturday night dinners out will be cheaper and maybe you will acquire a like-minded friend in the process.

I've talked about inexpensive activities you can do in another post, so I won't go into that here. But one thing I will suggest is that holding activities in your home is often a good way to get the ball rolling to a cheaper lifestyle - having friends over for dinner instead of eating out with them, having a movie night for your children's friends in your home rather than having them go to the movies. Inviting people to see a free music concert in the park for an evening out rather than going to a club. Oftentimes the people will reciprocate and invite you back over and suddenly you are in a routine of doing cheap, fun activities.

It will probably take some time to find like-minded friends. And again I'm not suggesting that you dump your old friends. It's just a good idea if you spend less time with people who are costing you money and more with those who are helping you to save it.

In Real Life (IRL) - I moved to my new town shortly before I became a mom, while I still had a full-time job, 30 minutes away. After my first baby was born, I realized I had very few friends in town. I joined a Mom's Club and frankly whether the moms were spendthrifts, frugal or had two heads, I wouldn't have cared. I just wanted someone else to talk to. It took several months before my friendships were built up with some of the women in my newly-formed playgroup. Some moms joined, others left, and a few of us stayed for the duration. And now my first baby is 7, and I am still friends with those same moms. A few of them were the ones who first introduced me to shopping at thrift stores (much to my horror!). I remember thinking that I liked a couple of these women despite the fact that they were so different than I was. I would never have bought used clothes for my precious first-born!

Years have passed and I think I have surpassed many of them in thriftiness now. Most of us enjoy going to cheap, kid-friendly activities, and many of them still buy clothes for their children at consignment stores. But they also eat out at nice restaurants way more often than I do, and I think I am the only one who goes yardsaling every weekend in spring and summer. I'm also pretty sure I am the only one with a blog about saving money. But we all do our own things, too, and I only participate in certain activities with them. I usually bow out of the group meals at restaurants, but am more than happy to host and participate in get-togethers in each other's homes.

I have also made a friend by shopping at yardsales after seeing the same woman over and over again every Saturday morning. We got to know each other and the following year our kids were in the same preschool! I am also setting the stage for making some new friends in my daughter's elementary school. I have set up low-cost activities for my daughter and her friends in my house such as pretend sleepovers and movie nights. These hardly cost anything and are fun activities for the girls. Also, I am slowly learning about my daughter's friends' parents. One set belongs to a country club. Another has a family of 6 in an 1,100 square foot house. I think I know which one I'll invite yardsaling with me. :-). I am always on the lookout for thrifty people. And for the most part, I am blessed to have some like-minded friends in my town. It has made my journey to financial independence that much easier.