Do you have friends, family, co-workers and peers who make more money than you?
Chances are they aren’t all going to have the same financial reality as you, nor will they have the same goals and priorities. What is affordable for them may not be what is affordable for you.
According to a 2013 study from the American Institute of CPAs and the Ad Council, many people (78% of Millennials, to be exact) feel the pressure to keep their spending in line with their friends — even if it’s at the expense of their own financial well-being.
It might be hard for them to understand why you don’t feel comfortable spending money. But the fact is, you know your finances better than anyone else and no one should make you feel pressured into spending outside of your comfort zone.
So how can you fight the pressure to spend more than you can afford? Start with these steps:
Have a monthly “play”/ entertainment budget. Everyone deserves to enjoy a drink or a nice dinner or a good girlfriends’ getaway every now and again. Know how much you are willing to spend for social occasions and stick to that limit. To take it a step further, budget for EACH occasion and only bring enough cash to cover your planned costs. It will force you not to overspend or be swayed by peer pressure.
Prioritize. Once you’ve defined your “play” budget, you may find you’re unable to attend every party or celebration. If you’re worried that dinner out with a particular friend or a birthday celebration at a restaurant could be a drain on your budget, just say no. Simply send your regrets and then maybe invite them on another night to celebrate. Rather than feeling pressured into going anyway and making spending choices you’ll regret later on, be direct with your peers.
Suggest low or no-cost alternatives. Saving money doesn’t have to be the end of your social life. There are plenty of ways to spend quality time with friends and peers without spending beyond your budget. Invite friends to a potluck at your home. Find coupons and group deals that everyone can enjoy. Everyone, regardless of his or her financial circumstances, loves a good deal.
Lastly, always stay positive. Don’t get disheartened with a negative, self-pitying, “I can’t afford it” mindset. Instead, chose to feel empowered by your decisions to spend and save wisely. Your new mantra should be, “That isn’t my budget priority right now.”
photo credit: People Dancing at a Discotheque via photopin (license)