Unless you live in cave, which most people don’t, you’ve probably let people around you influence your spending from time to time. It’s nearly impossible to avoid letting people influence our spending all of the time, and sometimes it can even be a good thing.
During my personal finance journey over the past few years, I’ve realized that the people you surround yourself with can have a big impact on your financial goals in good way or a bad way. Unfortunately, most of time when friends and family influence our spending it’s not a good thing.
They may convince us to spend money on drinks, dinner and a whole night out even though we know we shouldn’t. They convince us otherwise. Bye, bye budget!
If we really want to make progress on our financial goals this year, we need to stop letting friends and family influence our spending. Here are five ways our family and friends influence our spending and how we can stop it from happening.
Your peers give the best influence or the worst influence. When it comes to finances there is some positive peer pressure. You know you should have an IRA or 401(k). You know you should save more than you spend, and you know you should pay off your credit card right away. This is all positive peer pressure to help you become better with your finances.
Negative peer pressure is when they help talk you into buying something that you know is out of your budget, even if it is “on sale”. You may have hesitations, but you buy it anyway.
The best way to avoid this is to simply stay away from negative peer pressure. Find friends that lift you up and support your goals. But if you really can’t avoid some of these people, try to keep your receipts so you can return items later. They’ll never know!
That’s How Mom and Dad Did It!
Again, this can be both bad and good. If mom and dad gave to charity, saved and lived well below their means – good for them and good for you from learning those habits. But, if mom and dad took out credit card after credit card and never paid in full, learning from them is not so great. For better or worse, our parents are usually the first financial influencer you’ll have. Just keep in mind that you don’t have to do everything they did.
Ah jealousy, rears it’s ugly head. This is one of the biggest drivers of overspending. A friend or family member might have just bought a new house, new car or cool new gadget. This often leads us to wondering how come we don’t have a house, car or gadget just as cool (if not more cool) than their’s. You are not alone in thinking this. These thoughts go through almost everyone’s mind at some point. That jealousy will often lead us to buying something to keep up, even if we can’t afford it.
Instead of going shopping and trying to keep up out of jealousy, do you best to remember why you are living on a budget. Most likely you have some kind of reward to look forward to, so try to keep that in mind too. Best of all, remember to be grateful for the things you do have already.
Expectations, especially from family members, can quickly get out of hand. Family, friends and even society expect you to get a “good” job, buy a large house, have a fancy car, etc. If this is what is expected of you, you might incur large debt just to save face and appear as successful as they want you to be. Don’t fall for it! Stay true to yourself, your budget and your priorities.
Shaming is hurtful and it comes in more forms than you think. Shaming can go both ways. Shame on you for being poor and getting food stamps. Or, shame on you for flaunting the wealth you worked for while there are people starving in other countries.
Shaming often leads to guilt, which is a huge proponent of spending. You may feel guilty about earning more than friends or family and end up spending money on them to make yourself feel better.
Just remember, everyone’s situation is different. Don’t give into shame, and especially don’t go shaming others.
Most important of all is to remember that not everyone is out to make you blog your financial goals and influence you to spend your money. They may not know they are causing you to get off track with your goals if you’ve never told them. But if they do know about your goals, you might want to rethink how often you meet up with them. The easiest way to avoid letting others negatively influence our spending is to avoid it altogether.
Who is influencing your spending? How have your avoided being influenced by others?
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