Peer pressure isn’t something that only affects teenagers. It may be more subtle, but it affects adults too. In fact, if you pay close attention you can feel it in your relationships with friends, coworkers, and family members.
If the peer pressure is great enough you may not be able to resist the temptation to give in to it. Sadly, when you succumb it can result in unfavorable financial consequences.
Here are some of the negative impacts friends and family could have on your spending.
One of the negative impacts friends and family could have on your spending is overspending. The peer pressure you feel when you are shopping with friends or family can cause you to make purchases you otherwise wouldn’t.
It could be that you give in to prevent others from poking fun at you. Or, you may feel the need to “one up” your friend or family member.
Regardless of the reason, you need to recognize it when it happens and think before you buy. Instead of spending on impulse, stop and think about why you want the item first. If you can come up with an important reason or reasons, go ahead and buy the item.
Another of the negative impacts friend and family could have on your spending is increasing your debt. Friends and family who persuade you to spend what you shouldn’t may influence you to pull out your plastic.
The truth is that charging spur of the moment purchases on your credit card increases your total debt. If you’re living paycheck to paycheck or have a tight budget already adding debt can be devastating to your finances.
Furthermore, it can put you into a cycle of debt that you might never get out of. Rather than increase it, pay your debt down and manage your finances better.
Damages Credit Scores
Negative impacts friends and family could have on your spending includes damage to your credit score. If you are unable to keep up with your bills due to overspending your credit score can go down.
The next time you need to get a loan for a major purchase you may not get approval if your credit score is too low. Or, if you do get approval, your payments may be too high to afford.
You don’t want to reduce your retirement funds or delay retirement significantly due to negative influences. If you overspend often and have trouble keeping household bills paid you probably aren’t contributing to your retirement funds.
Getting everything you want when you want can prevent you from retiring on time. It may even end your dreams for retirement completely. But you can plan ahead for your retirement.
Ruined relationships are just one more of the negative impacts friends and family could have on your spending. For instance, hard feelings can develop if you are asked for money.
If you give in to the request it’s possible you may not get repayment. You may feel resentful knowing you could have used that money yourself, especially if money gets tight for you later on.
To avoid ruined relationships it’s ok to say “no” when asked for money. Of course, denying the money can also have negative impacts. However, that may be better option for you financially.
Lowers Emergency Funds
Finally, negative impacts friends and family could have on your spending includes lowering your emergency funds. If you are buying what you shouldn’t because it “looks cute” or you “just have to have it” you may have to short your budget elsewhere.
The problem is that you can’t predict when you will need emergency funds. If that is the area of your budget you are dipping into for unplanned purchases you could put yourself in a bind later.
Peer pressure will always be around. Keep in mind there will always be other cute clothes or cool electronics even if you pass up an item or to now. Remember these negative impacts and resist the urge to cause harm to your future finances.
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Have you ever had friends or family negatively influence your spending?