My friend Michelle spends every paycheck she gets, and then some. She doesn't seem to care that she's in debt up to her eyeballs. And every time we hang out, I end up spending money that I don't have! Do you have friends like that -- friends who seem to encourage you to spend, spend, spend? If you’ve been struggling with debt for a long time, maybe it's time to re-evaluate your friendships. Here are five ways to make sure your friends are helping you establish good financial habits...…
1. Stick with the friends you don’t feel the need to impress. “We decide we want to be debt-free,” writes Gail Vaz-Oxlade in Debt-Free Forever. “Yet we go out and charge up a storm, buying expensive stuff for our homes, our friends and family, ourselves, ignoring the fact that when the bill comes in, we won’t be able to pay it in full. If it’s common sense to only spend what you can afford, why do so many people spend money they don’t have?” She says it’s the social pressure to conform – which we get from our friends. They may not even do it consciously; if they buy expensive clothes, cars, and critters, then we feel the need to ante up. To reach your money goals faster , surround yourself with friends who have similar views on money.
1. Stick with the friends you don’t feel the need to impress. “We decide we want to be debt-free,” writes Gail Vaz-Oxlade in Debt-Free Forever. “Yet we go out and charge up a storm, buying expensive stuff for our homes, our friends and family, ourselves, ignoring the fact that when the bill comes in, we won’t be able to pay it in full. If it’s common sense to only spend what you can afford, why do so many people spend money they don’t have?” She says it’s the social pressure to conform – which we get from our friends. They may not even do it consciously; if they buy expensive clothes, cars, and critters, then we feel the need to ante up. To reach your money goals faster , surround yourself with friends who have similar views on money.
2. Figure out peer pressure versus your true needs and wants. Even 70 year olds succumb to peer pressure – it’s not just for teenagers! Are you buying an iPhone or big screen TV because you really need one, or because your friend can’t live without hers? Do you go out for lunch every day because your coworkers or friends do? Do you go shopping and purchase items because you need them, or because your friends are shopaholics? Think about the difference between peer pressure and your authentic self.
3. Be aware of how your friends’ money perspective affects your relationship. “If you and your partner are at odds, if one of you is allowing peer pressure to throw the family budget out of whack, you better sit down and figure it out before you end up divorced and broke,” writes Vaz-Oxlade. Sometimes friends who hinder your attempts to stick to your budget are also hurting your marriage or relationship…which can be far worse.
4. Identify your "goal-friendly friends." “One of the hardest things to deal with once you decide to live on a budget, change how you’re using your money, and modify your life is finding people who are friendly to your new goals,” writes Vaz-Oxlade in Debt-Free Forever. If your friends sabotage your goals, you don’t necessarily need to dump them…instead, find different, non-monetary, low pressure ways to spend time with them. Increase the amount of time you spend with the friends who do encourage you to save money.
5. Recognize what good friends do. A friend who helps you reach goals will share smart ways to save money . She’ll point you in the direction of the best deals, ideas for cutting costs, and ways to have fun for free. Good friends don’t believe you need to spend money to enjoy life fully – and they celebrate your victories with you.
Do your friends help you save money, or are they not part of the equation at all?
Do your friends help you save money, or are they not part of the equation at all?
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