07 Feb How Your Friendships Shape Your Finances
In honor of the upcoming Valentine’s Day holiday, I want to focus on some ways that our personal finances affect and are affected by our relationships – romantic and otherwise. For instance, our friends and social circle can significantly sway our spending, saving, lifestyle, and even investment choices. The idea of keeping up with the Joneses is nothing new – yet the challenge of resisting peer-pressure spending can be as difficult as ever.
It is natural to want to fit in with friends, and we value the input and opinions of those close to us. However, when it comes to your financial situation, what is right for someone else is not necessarily what is right for you. Furthermore, appearances can be deceiving: you don’t really know what someone else’s financial situation is like. If they have a stylish wardrobe but built up a mountain of high-interest credit card debt buying it, then that’s not a financially healthy example to try to live up to. Finally, you are the one who has the power to take control of your finances and build a strong financial foundation for the life you imagine. That means prioritizing your own needs and taking smart, strategic steps to safeguard your financial health. Read on for some ideas.
- Make a list of your own financial goals and priorities. Having this clear reference of the dreams that you’re working toward can help you feel good about staying on track with smart choices – even if that means passing on something like a splurge vacation with friends.
- Just like you might sign up to take a class or join a gym with a friend, you can enlist a “money buddy” to help keep you focused on your financial goals and make getting in financial shape more fun. Talk to each other about your goals and progress, and brainstorm financially healthy alternatives to any old habits you want to change. Instead of peer pressure spending, it’s positive peer support.
- Take the lead in planning social outings among your crowd. Before someone suggests making a reservation at that expensive new hot spot, invite everyone over for a potluck and game night. Jumping in with a financially healthy solution means that you don’t face missing out on the fun.
- Know that everyone’s financial plan should be tailored to their unique situation and goals. What works for your friends, family, neighbors, or coworkers isn’t necessarily what’s right for you; their financial needs and goals may be very different from your own. Rather than taking investment advice from your social circle, seek out an independent fiduciary advisor – someone who is legally required to act in your best interests.