How Peer Pressure Affects Your Debt

peer pressure can put you into debt

How Your Social Life Can Put You In Debt.

Often times the money issues that arise from your social life aren’t just about the events you attend – they come from your own emotional reactions to what other people do, buy, and have. Comparing your life and purchases to those of people around you will only lead to negative things.


Peer Pressure Affects Your Debt

This cycle is an important one to recognize and cut off as soon as possible. Whether it’s eating out at restaurants too often or getting pressured into expensive group vacations, recognizing how and why you spend your money is a key part of getting out of debt and back in control.

If you’ve ever felt pressured into spending money – whether it was on a new car you couldn’t actually afford or a pricy group outing that blew your budget – you’ve experienced financial peer pressure firsthand.  This kind of peer pressure can be especially difficult for folks trying to pay down credit card debt or save for the future.

Stop Trying to Keep Up

Your neighbor buys a shiny new convertible – and all of a sudden your practical, ordinary, not-so-new sedan looks old and outdated.  Your brother-in-law has filled his Facebook timeline with photos of his newly remodeled kitchen – and you think of those photos every time you open your beige, 1980s-era refrigerator.

Any of those scenarios sound familiar?  When people fall into the financial peer pressure trap, it’s often because they want to keep up with their friends (or neighbors, or coworkers).

This is not an especially new or rare phenomenon, but if you’re trying to pay down (or avoid) debt, stick to a budget, or build up your emergency fund, trying to keep up with your friends and neighbors is a dangerous, expensive game.  Sure, you might feel a twinge of envy every time you see your neighbors’ new car or your friend’s gourmet kitchen — but that’s not an excuse to start spending money you don’t have.

The next time you find yourself tempted to make a purchase just to keep up with someone else, remember this:  Things aren’t always what they seem.  The neighbor with the new car might be eyeballs-deep in debt.  Your brother-in-law might not have a dime set aside for retirement.  And who knows?  Maybe they felt pressured into those big purchases by their friends, neighbors, or relatives.

See what I’m getting at?  You can’t let others influence how you spend your money.  Focus on your goals, and stop trying to keep up with other people.
– via DebtGuru

How To Keep Peer Pressure Out Of Your Wallet

If you can see your own patterns in the discussion above – letting yourself spend more than you should just to keep up with those around you – you might be wondering how to break that cycle. It could be easier than you think! The two main elements are honesty and deciding what REALLY matters to you. Once you have that, everything else will fall into place.

First, be honest with yourself. Use a debt calculator to figure out how long it will take you to pay off your debt with what you are currently paying.

Once you’ve established your baseline, experiment with the calculator to see how fast you can pay down your debt if you just pay just 5% more than you are currently spending.

Once you know how little money it takes to cut YEARS off your debt, try to figure out what amount of money you can cut out of your budget and throw at your debt.

  • Do you have good public transportation in your town? Would it be worth it to stop driving your car for a year if it meant you could pay down a credit card debt in the same amount of time?
  • Would people at your office still be your friends if you stopped going on Starbucks runs with them every day and instead baked a homemade cake once a week to share with them in the lunch room? Would they still be your friends if you just escorted them to Starbucks and didn’t order anything yourself?

Second, be honest with your friends. Put on your adult pants and just be out about your budget parameters.

In addition to saving yourself from friendship-ending misunderstandings, being honest about your finances can actually lead to finding extra work. Most people do live lives of quiet desperation, and those people are not the ones who get recommended for jobs. I am very loud about my life of desperation, and consequently I’ve always had odd jobs come my way. No reasonable person can fault you for wanting to sock away more cash during a recession, and you might as well reap the rewards of talking about yourself.

Decide What You Really Want

Nothing is more depressing than not being able to afford something you really want because all your money is going to pay down credit debt. That said, if you earned an extra $100 per month this year that didn’t have to go for bills, what would you spend it on?

When I was still in college, I decided that I wanted to buy a house by the time I turned 30. Every time someone pressured me to spend money I didn’t have I would say, “I’m sorry, I can’t afford that because I’m saving up to buy a house.” That really shut people up because people can understand the desire and expense of homeownership. Also, by having that goal, it was so much easier to not feel deprived because I would just ask myself, “Do I want this cocktail, pair of shoes, theater ticket, whatever more than I want a house?”

So what do you really want? The kids in private school? A vacation? The ability to eat sushi three times a week? People are a helper species. If you commit to a personal goal, even random strangers will root for you to achieve it.
– via Wise Bread

What about you? How does your social life affect your wallet? Do your friends help or hurt your budgeting efforts?

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