Like many adults, you probably have long-term plans for your money. This can include saving for retirement or building up a three to six-month emergency fund. These goals prove you’re thinking smart with regard to your personal finances. But there’s a problem that can seriously derail your plans—financial peer pressure.
Peer pressure is often viewed as a young person’s problem, but it’s not limited to adolescent. Older people also deal with peer pressure, just another type. Even if you’re a secure individual with a mind of your own, you might fall victim to this kind of pressure. Maybe you’ve splurged buying a nicer home or renting a fancier apartment because your friends live in luxury. Or maybe you purchased more car than you could comfortably afford because you didn’t want to have the cheapest car in your group.
On a small scale, financial peer pressure might seem like a minor thing. But the more you splurge, the harder it’ll be to reach your goals. The good news is that this type of peer pressure doesn’t have to ruin your finances.
Be Firm With Your Entertainment Budget
Some people make the mistake of focusing all their attention on financial goals that they neglect to set money aside for fun. While their commitment is commendable, this thinking increases the likelihood of frugal fatigue. Extreme frugality can trigger expensive splurging later on, so you need a little play money in your budget. But this doesn’t mean anything goes.
Setting a clear entertainment budget for the month and sticking to this budget can help you avoid pressure. You’ll need to take a look at your overall budget and determine how much you can realistically spend. Once you know a comfortable amount, commit to only spending within this range. This doesn’t mean you can’t enjoy yourself throughout the month, but you’ll need to get creative. Rather than allow friends to suggest all the activities, speak up and recommend low-cost or free activities.
Stop the Shame Game
Some people think there’s nothing worst than admitting they’re broke, and they don’t want to feel inferior to financially well-off friends. But just because you choose “not” to participate in an activity may not necessarily mean you can’t from a monetary standpoint. You have goals and priorities, so you set limits on how much you spend—it’s the responsible thing to do. You don’t have to respond to every invitation, and you don’t have to feel bad for watching your pennies. Others might spend more on fun and entertainment, but at the end of the day, you might be in a better place financially because you’ve made smarter choices with your money.Are you giving into peer pressure spending?Click To Tweet
Fix Your Mind on the Future
Some people exceed their budget and dig a hole for themselves because they want to appear better off than they actually are. Just know that giving into spending peer pressure is one of the fastest ways to derail money-related goals. To fight pressure, keep your mind fixed on the future. Think of the benefits you’ll gain by resisting the pressure to splurge or dine out several times a week. Let’s put it in perspective for a moment. If you’re looking to buy a house and you need to save $7,000 for a down payment, think of how long it’ll take to hit this goal if you’re spending $250 a month on nonsense. On the other hand, if you take this $250 a month and put it in a savings account, you can save up the money in about 28 months, or a little over two years.
Avoid Financial Enablers
I’m by no means suggesting you cut people from your life permanently, but you should identify individuals who put the most pressure on you. When you’re trying to be smart with your money, the last thing you need is a financial enabler. This person not only turns up the pressure, she may tell you want you want to hear and unknowingly contribute to the spending problem.
Of course, only you can control your purse strings. But if you’re looking for someone to offer support and positive encourage, this is the wrong person to have around when you’re trying to stick with your budget.
So many things can stand between you and your financial goals. Some setbacks are beyond your control, but you can control whether you allow the attitudes of others to influence your spending habits.
What are other tips for resisting financial peer pressure?
Are you looking to tame your finances once and for all (and save $5,000 or more in the process?). Check out my new course to get all the details!