In my last post, I posited the question: Why don’t we do better about our finances when we know we should?
Asking around yielded one theory: peer pressure. I tend to associate the phrase with teenagers and trying to fit in, something we do before we’ve stepped into our identities as mature adults. But in his book I Will Teach You to Be Rich, Ramit Sethi states that social influence (what peer pressure becomes after 17) is a huge reason why people don’t do better with their finances.
He calls it the “Sex and the City Effect,” pointing out that any random group of friends is likely to be dressed the same—even though their incomes probably greatly differ. Sethi goes on to cite a New England Journal of Medicine study that found when a person becomes obese, it increased their friend’s likelihood of being obese by 57 percent.
To be honest, I’ll admit that when my friends are flush, we do more going out and socializing and spending money. When most of us are low on funds, we’re more creative, socializing at home and potlucking as opposed to spending money in the streets. Who wants to be the lone “I can’t afford it” voice while everyone else is kicking up their heels?
With that said, we need a game plan to avoid getting sidetracked from our financial wellbeing by unenlightened friends.
1. Clarity of purpose: You’ve got to be crystal clear on why you’re trying to adhere to a spending plan and laser-focused on your financial goals. If saving for my upcoming Vegas trip is in the forefront of my mind, a $25 round of drinks this Saturday looks less appealing than a nice hour at the slots in a few months.
2. Alternatives: Just because you’re not running the streets doesn’t mean you have to be a home-bound hermit. Try going out one night a week with a budget and then entertaining one night a week at a different friend’s home.
Make sure when you go out, you check the menu and drink prices in advance. I budget $20 for a night out—and I like to get the most bang for the buck, so I’m going where the mixed drinks are $5 & under, not $8 & above! When hosting at home, make a big dish like lasagna or a pot of chilli and let your friends bring wine and dessert. It’s cheaper and less headache than traditional potlucks.
3. Good Excuses: Have your lines at the ready, and don’t deviate. Having a standard response to the lunch/drinks/movies invite allows you to repeat yourself often enough until your friends are trained. “Can’t, I spent my $20 fun budget for the week. Let me know the next time, though!”
Deliver your responses in an upbeat manner—no one wants Eeyore for a friend. But conscious spending is not about deprivation, so sound enthused about the money you’re saving, the bills you’re paying and the payoff at the end of your goals.
Once your finances are thriving, your friends will wonder how you did it and ask YOU for tips!
Bougie Financial Columnist Toni V. Martin’s work has appeared in national magazines and media outlets. Pre-order her newest book, Tight $queeze: Escape from Life’s 25 Worst Financial Fiascoes, at tonivmartin dot com.