No matter your confidence level, you probably don’t want to be known as the poor one in your group of friends. When they’re going out to dinner and planning vacations together, it can be hard to turn down invitations or resist pressure to join in on the fun.
Financial peer pressure is a real problem that can affect people of all ages. According to a study conducted by the American Institute of CPAs, about “78% of young adults look at the financial habits of their friends to determine their own habits.” Another 66% admitted that they strived to keep up with their peers in terms of living conditions, and two-thirds of consumers feel some level of financial peer pressure.
If you don’t think friends influence your spending habits, consider this: Have you ever charged something you couldn’t afford to a credit card to keep up appearances? Have you ever spent outside your budget so you wouldn’t feel left out? Most of us have been in these types of situations. Luckily, we also grow and learn how to make better choices with our money, and one of the best decisions you can make is learning how not to give in to financial peer pressure.
1. Shop Alone
To resist financial peer pressure, you have to know what you can handle. You can’t control what your friends do or buy, but you can control who you shop with. If hitting the mall with friends results in you burning through more cash than you have, you need to shop alone.
Your friends may not have ill intentions, but if they see you drooling over an item, they could unknowingly put pressure on you to purchase something you can’t afford. You have to remember one important fact: You’re the one who has to deal with the repercussions of a purchase. Your friends aren’t getting the credit card statement in the mail; you are. Likewise, they’re not the ones who’ll worry about making ends meet if you spend outside your budget. Learn how to become your own shopping buddy.
Personally, I only shop alone, and I love it. I’m not tryin’ to wait for you to try on six different outfits just to pick the first one you had on. No, thank you. I’ll meet you back in the food court in an hour.
2. Don’t Be Ashamed of Your Limitations
The fact that you have some financial limitations doesn’t make you a loser or mean you’re inferior to anyone. Maybe you have more expenses or responsibilities than your friends. Some of your friends might be single with no kids, have roommates, or live with their folks, whereas you’re the breadwinner of your household. Everyone has unique circumstances. So if you have to pass on a costly night out or a fancy excursion, it’s okay.
3. Don’t Be Fooled by Social Media
Even if your friends seem to have it together financially, it could very well all be an act. With that said, stop coveting the lifestyles you see on Facebook or Tumblr. Remember, most people don’t use social media to broadcast their problems. What they will do, however, is showcase the good in their lives, such as vacations, new cars, new homes, and other achievements. There isn’t anything wrong with people sharing good or exciting news — just realize that what you see online isn’t always the truth, and it definitely shouldn’t be the standard you live by. Some of the people you envy are up to their eyeballs in debt — all because they’re trying to portray a certain lifestyle.
4. Don’t Forget Your Goals
Adopting a frugal mindset is one of the best ways to reach your goals, such as saving up to buy a house or finally taking a European vacation. This involves pinching your pennies and making sacrifices for the betterment of your personal money. But you won’t reach these goals if you’re giving into financial peer pressure. The next time a friend ups the pressure or tries to make you feel bad for not spending money, think about your goals and decide whether saving face is worth derailing your plans.
5. Don’t Let Braggarts Get in Your Head
Some people will brag about anything, and you might feel tempted to outshine them — but you shouldn’t do this at the expense of your finances. The braggart is the one with the problem, not you. This person wants to stir competition and outdo his friends, family, coworkers, neighbors, etc. You have a choice. You can either ignore this person (at which point he’ll take his annoying self elsewhere), or you can fall for the bait and get trapped in a game of one-up. Just know that in this game, there are no winners. You might come out on top, but it’ll cost you.