We’ve all been there. One day you’re handling your business and staying on budget and the next day, one of your friends suggests a weekend getaway or wants to go to dinner somewhere a tad out of your price range. Do you cave to the pressure to keep up with your friends or do you stick to your financial goals? If you cave to the pressure, you are not alone. Approximately 48% say they’ve overspent when sharing experiences with friends, whether it’s dining out or going on a group vacation, according to Schwab’s 2019 Modern Wealth survey.
Spending money isn’t the problem but when we allow social pressure to influence our spending decisions and live beyond our means, it can impact our long-term financial stability which can be a problem. Although it isn’t always easy, we have a few quick reminders about how to stay on track with your financial goals.
Check Your Friend Group
We can’t make everyone happy. Peer pressure is all about your circle of friends. True friends will respect your feelings and choices about how you manage your money. Don’t be afraid to distance yourself from people who don’t support your financial decisions and goals. Saying “no” is hard and there is a definite possibility you will have FOMO (fear of missing out) but don’t let the pressure from a “friend” derail your financial goals or worse, put you into debt.
Limit Yourself to Cash
When you go out with friends, rather than carrying your credit or debit card, limit yourself to the cash you have on hand. Only take the cash you estimate you should or want to spend on the outing. For example, if you have $100 but don’t want to spend it on one night out, only take $50, leaving your plastic at home to avoid the temptation to spend more than you want. Here are some other cash tips from The Balance.
Keep Social Media and HGTV in Check
Let’s face it – social media influences everything! Just being aware that the things you see on social media or HGTV are not reality helps to keep the pressure off. In all honesty, the Joneses are probably living beyond their means so stop trying to imitate what they have and how they live because they’re probably in debt. Whether it’s social media or a home décor TV show, it may be giving you an unrealistic view of life so limit your social media and TV consumption. Better yet – Follow social media accounts that help you stay on track with your financial goals.
Do I Need It or Do I Want It?
In the “Treat Yo Self” culture we live in, it’s easy to confuse what is essential versus what is a wish. When your budget is tight, reducing “want” purchases is the best way to lower expenses without cutting the important stuff. The best way to tell the difference between wants and needs is to pause and reflect before making a purchase. Ask Yourself, “Do I truly need this?” But the trick is to answer honestly because sometimes you think you need things when you don’t. To get to the truth, ask yourself these two follow-up questions:
- What would happen if I didn’t buy this?
- What would happen if I bought a cheaper version instead?
Think Big Picture and Long-Term
Never stop thinking about tomorrow or your long-term financial goals. Short-term pain or delayed gratification can help you achieve your long-term financial success. Think about – Do I want to buy that expensive item I’ll probably get rid of in a few years, or do I want to increase my chances of being able to retire earlier? Thinking bigger picture helps you make smart financial decisions.
Protecting your financial health is important, and at the end of the day, you get the final say in how you spend your money. So, here’s to making smart choices when it comes to your spending habits and the friendships you build. Let Members Trust help you achieve your financial goals with a variety of savings options.