Financial Peer Pressure

What is Financial Peer Pressure? Do you often succumb to financial peer pressure?
If yes, here is a guide about how to fight financial peer pressure effectively.

What is financial peer pressure ?

Financial peer pressure refers to people developing new habits because of people they hang out with. For example, you start working and you get a new set of colleagues. You may not be regular with your evening coffee but since new colleagues regularly visit cafeteria for evening coffee dose, you also start visiting the tony coffee joint daily for the same.

Financial Peer Pressure in the longer run can suffocate your financial planing and it has capability to put you down morally too.

Looks like same thing happened to me too when I joined my company last year. Can you give some more examples of financial peer pressure so that it’s more clear to me?

In our day to day life we encounter many instances of financial peer pressure.

• We often plan our summer vacations at exotic places with stay at signature hotels just to show off our relatives and friends.
• Weddings are the place where people love to show their wealth – be it designer clothes, designer jewelry or lavish spending at the wedding functions.
• People rush to buy latest gadgets just to show off them to their colleagues.

The typical financial peer pressure is visible everywhere around us. Knowingly or unknowingly we also succumb to this financial peer pressure.

• At home

• Financial peer pressure comes to us in the form of holiday trips. We get tempted by the trips made by our neighbors and relatives and try to go to the same places they visited so that we do not feel inferior to them.
• We often plan a movie at the multiplex followed by the dinner at signature restaurants on the weekends so that we do not feel inferior to our friends and colleagues. And we have good masala updates for our Facebook timeline.
• We make it a point to visit malls over the weekend to do some window shopping to satisfy the shopper in us. Do read this to know how supermarkets are a big trap.
• We always look to buy new gadgets so that we can match the standard of our neighbors. If our neighbor buys a 60 inch LED TV, we try to better it by buying 75 inch LED TV.
• We always look to buy / upgrade our automobile to show others that we have big car and we are no less than others.

We always buy latest toys for our kids, we send our kids to popular summer camps, we send them to expensive schools just to ensure that people see we are doing good financially and for the heck of not feeling inferior to others.

• At work
  

• You make it a habit to join end of the day coffee at coffee joint with your team members
• Weekly lunch outing to expensive restaurants
• Event celebrations at expensive lounges / resorts like birthdays / anniversaries etc
• You join regular office parties and snack parties  
• You keep updating your mobile phones just because your office colleagues have the latest models.

Oh my God, the list is long and well diversified. Unknowingly I am also spending a lot of money just to show off others – which is not required. Can you help me out on how to tackle financial peer pressure in day to day life?

The solution to this menace is not that complicated. Below are few points I am mentioning which will help you out in tackling financial peer pressure.

• Stop trying to keep up with others

• You do not have to plan your vacations based on your neighbor’s vacation plans or your friends vacation plans. Plan your holidays based on your likes and more importantly based on your budget. Intelligently planned vacations can save tons of money from going into the drain
• For kids – stop buying expensive toys just because your neighbor buys them for their kids. Kids are more happy when you spend time with them and they are more happy with activity based games.
• Say a clear no or fix the frequency of the parties your colleagues arrange. You need not to attend every single party. Right?
• Don’t follow your friends and neighbors and go for shopping sprees. Whenever you go for shopping make it a point to have written shopping list as frequent window shopping can make a big dent in your budget.
• It doesn’t make any sense to visit multiplexes every weekend to watch the latest movie and have food in expensive restaurants. You can have a movie night at home. Now with Netflix and host of other service providers it’s possible to have movie watching a less expensive affair. Also food tastes much better if prepared at home with entire family pitching in as helping hand.
• Stop getting into FOMO – Fear of Missing Out. This will make you feel inner happiness in a better way and you can enjoy life more.

• Take experience – Create memories instead of buying stuff

• Kids would love to go out and have a match of football instead of going to the mall for watching movies every weekend.
• Take kids to museums, parks, forests, outdoors – help them to see beauty of nature, identify plants, birds, insects. This will make them more happy than sitting in VR room playing video games.
• Plan vacations such that you see places of natural beauty, historical importance in and around your town. No need to go to maldives to experience beaches when you can have same experience in Goa for less than half the cost.
• Instead of having theme based parties for kids birthday, you can have activity based party wherein all the kids do some activity which interests them. Kids always love doing activities together.
• Focus on your monthly budget
  Keep track of your expenses. This link will help you out on how to budget for expenses. Make sure you keep an eye on useless expenses like subscriptions, eating junk, mall visits etc and cut them down.
• Do not get influenced by Social media
  If your neighbor is visiting Switzerland for summer vacations, you need not to visit the same place just to show that you are no less than your neighbor.
• Learn to draw a line – Learn to say NO
  This is very important. If you master the art of saying no to the things which harms you, you can overcome the financial peer pressure to a good extent.

Some good insights and some practical steps which I can take to counter Financial peer pressure. Thank you for elaborating these for me.

Yes, and one final thing – Your life should be driven by you NOT by the likes of others. This will not only make your life better but will improve your finances in long run. Also this can be considered a positive step towards wealth creation.

Happy investing !!!