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lifestyle
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budget
How Our Friends Hurt Our Finances
Have you ever felt like the only way to get your money right is to become a hermit and just have no social life whatsoever? I’ve been there too! When I first moved into my own apartment and was living alone, I knew I needed to be really careful with my money. My rent had nearly doubled and my student loan payments had increased. So there wasn’t a lot of extra money to go around. My response to that was to almost completely obliterate my social life. I turned down most social requests and spent a lot of time alone in my apartment. Of course, this helped me to build up a substantial emergency fund and pay off my student loans four years early. But looking back, I think I went to an extreme when trying to cut my spending. I believe it’s possible to be social while also sticking to a budget, even if it’s a strict one.
However, sometimes our friends and social lives actually do harm to our finances. This can be intentional or unintentional, but the damage can still occur regardless. But there are also ways that you can react to prevent that from happening.
Judging Our Choices
Last week, during our Money Circle meetup, one of the attendees told the rest of us about an experience she’d recently had with a friend. She told that friend that she didn’t think she’d ever want to own a home, and the friend, who’d recently bought her own home, thought she was crazy. The conversation escalated to the point where she felt judged and silenced by her friend. I’m sure everyone reading this has been in a similar situation where they felt judged for what they choose to do or not to do in their lives. This can make us feel embarrassed, ashamed, or alienated. And it can make us question the choices that we’ve made.
What you can do about it: Try to understand that in this scenario, your loved ones are probably projecting their own issues onto you. In my friend’s case, perhaps the friend was feeling insecure or overwhelmed about buying a home, and wanted to validate their own choice. Remember that it’s probably not about you, it’s probably about them. And then remember that your choices are just that - they’re yours. No one else has to agree with them. All that matters is that you feel good about your choices and that they align with your values and goals.
Ignoring Our Limitations
Have you ever told your friends that you are on a budget and need to cut back on spending? And then they invite you out to brunch or dinner. Sometimes they pick fancy locations where even an appetizer will cost you $25 after tax and tip. Sometimes people want to split the check evenly when some people bought multiple drinks, while one person only got a starter. This can be frustrating and difficult to navigate. This is especially true because it’s still hard to talk about money, particularly when you have to say you can’t afford something. But having these conversations is necessary if you want to maintain your social life while also working towards your financial goals.
What you can do about it: Be honest and clear about your budget limitations. It’s important, though, to take a positive approach when having these conversations. Frame it around your goals and suggest alternative options. For example, “I’m trying to pay off my credit card, so I’m being extra frugal this month. Do you want to come to my house for dinner instead?”
Pressuring Us
Have you ever gone out with a friend who seems to take joy in getting you to overspend? They might know that you’re on a budget but they push you to have another drink or buy that additional dress. It might not even be conscious; I’ve definitely done this before too. Sometimes it makes you feel better if someone else is overspending right along with you. But this can also get out of hand and lead us to overindulge more often than we can really afford to. So it’s important to recognize when this is happening with certain friends so that we don’t socialize our way into debt.
What you can do about it: It’s important to surround ourselves with friends who support us and want us to succeed. So if you notice that you have a friend or two who consistently pressure you to overspend or spend on things you don’t really value, it might be worth spending a little less time with that person. Prioritize the people who are onboard with your goals. Plus, keep those goals top of mind, so that if you do get pressured, you remember what you’re working towards.
The moral of the story is that whether they mean to or not, sometimes our friends are a bad influence on our money. But they only have as much power as we give them. As long as you keep your eye on your goals, and be honest about your needs, you can stay on the right track.