Great Savings 29: Opt Out Of Financial Peer Pressure


Climbing a mountain of debt.

If you’re facing a mountain of debt, maybe it’s time to consider why you can’t seem to break the habit.

When we were kids our friends exerted tremendous influence over the things we did. There was a sense we had to do what they did if we wanted to be popular. That could look like a lot of things: Wearing a particular type of clothing, owning the latest game console, trying cigarettes, teasing or beating up others, drinking, smoking pot, skinny dipping, or sneaking out for a party.


Peer pressure is an odd phenomenon. There’s a sense our lives really aren’t our own to control and we have to buy into the values or opinions of those we choose to live with. As children, that turns out to be an easy leap, because our parent’s really do make many of our decisions for us. The problem is peer pressure isn’t limited to children who have yet to develop a strong sense of self. It’s also a powerful motivator for adults, and quite often it shows up as ever-growing debt.


To be clear, today’s Great Savings Tip isn’t just about a matter of rejecting the notion we should all “Keep up with the Jones’s.” Not buying a new car like your neighbor might easily be the right financial choice, but there’s something more going on as we speak to the issue of peer pressure and spending.


Financial Peer Pressure Takes Many Forms


Don't buy into financial peer pressure. Fight it!How might peer pressure look as an adult? Consider these examples:


(1) Mary is 29. She’s married and wants children, but her husband isn’t sure he can find regular employment. Mary has several friends she likes to hang out with. All of them smoke, most of them drink, and they often spend their off hours at a local casino. Mary has wanted to quit smoking for some time as she’s been developing a nasty cough. However, every time she’s made it a week or two without cigarettes she’ll be out with her friends gambling and she’ll start to go on a streak of bad luck. Inevitably one of her friends will offer to buy her a drink or take her outside for a smoke. Since she feels so down and out to begin with it’s nearly impossible to resist.


Gambling is one activity often reinforced by peer pressure.

I never wanted to go to Monte Carlo in the first place, but I had no idea it would be so expensive.

(2) Greg is 43. He just ended a long-term relationship with Cindy, a woman who lucked out early in life and made a small fortune working for a “dot com” company. Greg had hoped to marry Cindy, but the truth is she easily makes 3 times the amount of money he does. Both Greg and Cindy like to travel, but where Greg would be happy camping out or hiking in the woods, Cindy loves staying in a posh hotel with a day spa and then going out in the evening to dine and see a show. As he wanted to make her happy, Greg often capitulated and agreed to Cindy’s destination of choice whenever the issue of travel came up. However, now that they’ve broken up, Greg is looking at his finances and realizing at least half of his credit card debt of $50,000 is related to travel expenses he made trying to keep Cindy happy.


(3) Sam is married to Melissa. They’re both 58 and own their own home in a nice neighborhood. A number of their neighbors who are all good friends worked for a large employer in the area—one that still pays their employees a pension. As a result, several have now retired and appear well set to enjoy their “golden” years. Sam and Melissa have not been as fortunate. They each have a small individual retirement account, but as it stands retirement is still a vague dream to them. Recently, at a block party, several of the neighbors announced they are planning a group tour of Europe and need at least 12 people to get the best rates. Currently, 10 have signed up and Sam and Melissa have been strongly encouraged to join group to make it an even dozen. They decide to sign up, even though going means time off from work and having less money to set aside for this year’s retirement contribution.


In each of the examples above, the parties involved felt pressured to “keep up” or “do what others wanted them to do”. Also, there’s a sense that the action they took wasn’t really what they wanted or the best choice financially. And there’s the rub: We can know we’re doing something we really can’t afford, but we’re either addicted, hope to gain something by playing along, or we lack the willpower to make a better choice.



Overcoming Peer Pressure


How do we overcome financial peer pressure as adults? Try these 5 steps:


Seek time alone to figure out who you are.

Sometimes its best to sit down and map out a strategy. Do that alone or find supportive friends to help you.

(1) Work on issues of low self-esteem. Overcoming peer pressure is never as easy as it sounds. Often, it’s not the pressure of the moment that’s the problem, but the lack of a strong sense of self. In other words, the reason we succumb to peer pressure is because we buy into our low self-esteem. When we don’t feel good about who we are or are uncertain about what we’re trying to accomplish, it’s much harder to resist the suggestions of others—even when we know those suggestions are a bad idea. While many people never seem to struggle with issues of low self-esteem, don’t feel bad or alone if you do. Instead, consider getting help. How? Seek a counselor or “life coach” who specializes in the field. Or if you know you have a particular issue that’s been troubling you, find a way to change it. For example, if you know you’re overweight and hate the way you look (or perhaps the way your clothes fit), join a weight loss program and stick to it like glue.


(2) Figure out who you are and what you want. Knowing who you are, what you like, and what you really want is another important key. Spend time figuring it out. That can feel hard if you’re surrounded by people who only like to do certain things or want you to be a particular way. Therefore, find a place where you can be alone or seek the company of supportive friends who encourage, rather than discourage you for going a different direction. Do you like hobbies? Do you like sports? Do you like movies? Do you like working with people or working on your own? Do you like books, art, cooking, gardening, pets or certain TV shows? In each case, give yourself permission to try new things until you know whether or not you enjoy them. Make a list of the things you like and those you don’t. Don’t let others tell you what you like as you go about this process. If they try, then give yourself permission to tell them you need time and space to decide for yourself. Knowing who you are goes a long way toward making better choices.


Set goals to build a brighter future.

Goals are a little like having a GPS for life. Instead of taking the chance you’ll flounder around or even get lost along the way, why not take charge by setting course from the get-go?

(3) Become more goal-directed. Goals are good because they allow us to visualize a different outcome. Setting an achievable and firm goal is a great way to stay on course when there are lots of reasons or pressure to go down the wrong path. By itself, a goal is only as good as your willingness to keep at it, but sometimes making a goal is all it takes to make different or better choices. For some great ideas on setting goals, read our post “Turning Dreams Into Reality: Setting Goals.”


(4) Limit exposure to pressure. If you can’t do it any other way, try limiting exposure to peer pressure. For example, if all your friends like to gamble but every time you walk away poorer then make a choice to opt out. If you have to tell your friends anything, tell them you can’t afford it or don’t feel like it. Or you could ask if any of them would like to go to a movie instead. Sometimes, others succumb to the same pressures you do and aren’t even aware of it. When you stand up for yourself, it can be a great example for others to follow. And if the group shuns you for making a different choice, then as difficult as it sounds, it may be time to find a more supportive group of friends. Don’t let the idea of losing friends stop you. Find an activity you enjoy and a club or group that meets in your area. Join up with those who are like-minded and avoid those who want you to continue to do the same old self-destructive thing.


A praying statue.

Seek strength and comfort wherever you can find it, but understand the change you seek only comes when you decide you’re worth it and are ready to take personal responsibility.

(5) Take responsibility for actions. While it’s easy to blame others for ending up in a bad situation, taking personal responsibility is a major key for making positive changes in life. For example, say we feel pressure to spend money we don’t have just to hang with certain friends. Maybe the group likes to hang at an upscale bar. Now ask who’s really to blame? The truth is no one can physically force you into making this choice. It’s a choice you make all on your own each time you decide to tag along. This may not feel like an easy thought to bear, but it’s powerful because it implies you can now take control and make a different choice which serves your interests better.


Whether you’re just struggling to get by or well on the road to building long-term wealth, it’s important to consider how the people you hang around with influence your decisions to spend or save money. When you let pressure from others affect your decisions, it can mean spending beyond your means, piling up debt or failing to put away money for education or retirement. To take back control decide who you are, what you want, and then opt of the game of peer pressure.


Action Item: Take a few minutes to examine your credit card statements or checking account. Now, decide if any of the expenses you see are tied to pressure you’ve felt from family or friends. If so, ask if spending this way is really serving your long-term interests. There are no right answers. What turns out to be true for some won’t be true for others. The point is to discover who you are right now in order to decide whether there’s work to be done building a brighter tommorrow. If you feel there is, then try one or more of the five steps above.


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