A British Man's Take on Debt, Saving & Investing

7 Reasons My Friend is Poor

Posted on October 11, 2009 by Lee

I have a dear friend who I have known since school. She is funny, caring, tough and always the life of any party.

She also never has any money, and is perpetually in debt.

Here’s why.

She is a Dog Owner

I have been down the pet path myself in the past with cats.

While having a pet is a great boost in certain areas of life, they can be a real big money drain. Food, vets, insurance, initial purchasing, sundry items such as carriers, leads, clothes etc. etc. Year on year these prices just go up and up and sap the life out of your finances.

My mother is in a similar situation – with 3 cats with big appetites (and of course, they will only eat premium food), she spends more on them per month than she does on the adults in the house.

My friend has a rather large dog, that costs rather a large sum to feed and insure. To add insult to financial injury, due to the times she works (she is an A&E doctor), she has to pay for someone to come and walk it at least once every day as well.

I hazard a guess that in total she spends over £4,000 annually keeping her four-legged friend.

She Likes Expensive Holidays

Everyone needs to get away for a while to relax and recharge, but it does not need to be to expensive destinations year in year out. For the last 4 years running she has flown to Las Vegas which is expensive enough, but to compound the issue she then spent 2 weeks gambling whilst there (and lost overall, naturally).

I estimate she spends £2,500 a year on each holiday.

She Only Buys Premium Food

If it is not from Waitrose or Marks & Spencer, she doesn’t eat it. For those of you not in the UK, they are the two more ‘upmarket’ supermarkets that cater for the more well-to-do in society (or those who wish to be associated with same). An average microwave meal from either will set you back approximately £5, where the same could be purchased in Tesco for £1.50 or so, or even half of that if you are not averse to buying from the Value range. In other words, these stores are 6 times more expensive for no good reason other than buying into the brand ethos.

As an experiment at the beginning of the year just before I found my frugal self, I shopped exclusively in both stores just as she does for a whole month. I have just dug out my bank statements and added up each visit for the month.

I am shocked.

My food bill rocketed from an average of £97 to £339!

Over £4,000 a year just on food to feed one person. Nearly 3 and a half times my spend then, or nearly 7 times what I spend now.

She Drives a Lexus SUV

When she bought her four-legged friend, she felt she needed to upgrade her car to not only be able to carry the thing in comfort, but also project a more professional persona in line with her vocation.

She splashed out on a brand new 4×4 – on finance – to do this. Couple the interest payments and horrific mile per gallon calculations for the vehicle concerned, I suspect Sarah is sinking an additional £7,000 a year here compared to if she had just kept her perfectly suitable and fully owned, cheaper to insure, cheaper to run, cheaper to service previous vehicle.

She Carries a Credit Card Balance

You may wonder how I know this, but let’s just say it is amazing what friends will disclose after a few drinks. My attempts thus far to bring her round to financial sense have failed, despite probing questions and long discussions.

Her current credit card balance is around £2,000 at 19.9%. She always pays the minimum amount and by my calculation will be free of this debt around 2036 having paid £3,240 in interest for having done so. If we include the accrued interest, let’s say keeping this revolving balance costs her £1,000 a year.

She Smokes 20-a-day

My thoughts on smoking aside, a packet of her cigarettes currently costs £6.04 for a packet of 20. If she buys a packet every single day as her habit demands, this adds up to £2,204 a year.

She Cannot Resist Clothes Shopping

Remember that carried credit card balance? The majority of it is from her regular romps up to London for clothes shopping. She thinks nothing of spending the entire day traipsing up and down Oxford Street going in all the fancy designer clothes boutiques and coming out with armfuls at a time.


Every year, adjusting for the fact she needs to buy some kind of food, my friend is spending £16,000 a year either servicing habits, keeping a companion or trying to inflate her lifestyle.  If instead of spending this she saved it at 4% for 25 years (the amount of time until she will theoretically retire) the effects of compounding would result in her having a retirement fund of her own – excluding the one she pays into with our employer – of – wait for it.

Wait for it.


Very nearly three quarters of a million pounds.

Do you have any friends you’d like to hit with a financial clue-stick?


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Category Debt, Money Management, Spending Analysis
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  1. 02 11 09 08:18

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5 Comments to “7 Reasons My Friend is Poor”

  1. Lulu says:

    Your friend needs to learn how to budget. While I agree with you on most points…having a pet does not necessarily make one broke. I had a budget of $310 for food and groceries for the month and when I got my cat (someone gave him to me as a gift after my mother died, to keep me company) I simply included him in the monthly budget. So since I spend $9 a month on his litter, that means I spend $9 less on eating. My budget has not increased…just moved about to accommodate the pet.

    Your friend really needs some help though…have you tried getting her to budget?

    • Lee says:

      Yikes, sorry Lulu, Akismet ate your comment.

      Alas, yes my friend could use a budget. But how blunt do you get trying to suggest these things? I’ve all but come out and said it and it still goes in one ear and out the other. I think if I pushed it any more she’d just stop talking money with me altogether !

      Sorry to hear about your mom 🙁

  2. billythekid says:

    Holy 750grand Batman!

    Have you used this projection for yourself? I might well have missed it on here. If you continue in the current frugal trend, even giving yourself a little more slack than during your debt pay-off period, what’s your own retirement pot worth?


  3. Rob says:

    If you’re numbers are correct on that dog then that dogs annual budget is only marginally less than mine based on my average rent for the past 3 years (I probably live off about £4.5k per year)! I’m exempt from council tax, but that’s astonishing given that a dog doesn’t have to pay rent. If your numbers are right then cigarettes plus holidays certainly cost more than my entire expenses for a year. Now I don’t feel I’m missing out on line on my budget so that puts it all into perspective doesn’t it.

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