Five Ways to Overcome Spending Peer Pressure

Statera Financial Planners |

Navigating peer pressure is a rite of passage for many, but when it comes to financial decisions, the stakes can be particularly high. From extravagant outings to lavish purchases, the pressure to keep up with friends' spending habits can wreak havoc on personal finances and long-term goals. However, understanding how to overcome spending peer pressure is not just about saying no—it's about cultivating financial confidence and assertiveness while fostering meaningful connections.

Here are five strategies to help combat the allure of overspending, empowering you to prioritize your financial well-being without sacrificing social connections!

 

1. Take only cash with you

Despite its lack in popularity, cash is still king. Studies show that consumers spend up to 18% more when using debit or credit cards, opposed to cash. So, take just enough cash to join friends, colleagues or family for an outing without making your disinterest or inability to spend like you normally do a big deal. Leave the rest of your cash, and definitely your credit and debit cards, at home.

Knowing how much cash you have available to spend can be challenging. Budget and money apps can help, but to this day nothing beats the good, old envelope system for managing spending.

For as many spending categories as you’re comfortable, such as “gas,” “groceries,” and especially “social discretionary,” put your allotted amount of money in each envelope each payday. This will reduce your number of trips to the bank and ATM, the latter of which can cost you money with each visit. Be aware of the amount of cash you have available in each envelope between paychecks. Put the money you don’t withdraw toward your emergency savings or your investments.

A solid budget will help you with all of this.

 

2. Have a buddy

We all think we’re alone in our money struggles. The truth is most of your friends and family could benefit from spending less, so don’t be afraid to share your story, even if only to one person.

That person can then be your accountability partner or sponsor. Call them when you need support or, if they’re part of the group of friends you’re out with, ask them to be your backup. Even just knowing that your accountability partner will ask how you did, you’re more inclined to do better.

 

3. Have an exit strategy

When you’re going out with individuals who often tempt you to overspend, know how you’ll exit stage-left when it’s time to go.

Have a friend or family member text or call you to “come home,” or make backup plans. Your friends will give you a different kind of a hard time if they think you’re leaving for a late-night date rather than not wanting to spend money.

If you’re strong enough to put a hard-stop on your time out, whether you care to share why or why not, make it clear when you’re leaving and stick to your plan. If you say one thing and do another even once, your friends will know they can talk you out of your plans and unintentionally keep you from reaching your goal.

Finally, make it a habit to never be the first one to arrive or last to leave. The longer you’re out, the more likely you are to spend money you’re trying not to spend.

 

4. Participate only in so much as you can contribute

If you’re not going to buy a round of drinks for your friends in reciprocation, don’t participate in the rounds of drinks.

Know in advance what your money goals are and be upfront with your friends. Tell them you’ll skip the drinks because you have to wake up early tomorrow or you’re taking a break for a while. The more direct and succinct you are, the less likely they’ll be to peer pressure you more.

 

5. Focus on the end

Take a page out of Stephen Covey’s book –7 Habits of Highly Effective People – and focus with the end in mind, the end of the day, end of the night and, ultimately, your end goals.

Do we want the margarita on your deck or would you prefer a margarita on the beach in Puerto Vallarta? Invariably, it’s the latter, and asking this question often helps us make better decisions.

When you know your higher goals, your higher purpose, your higher desires—when you keep those in mind – you think about them more. You focus on them, you plan around them, and you spend accordingly.

This is why Dr. John Demartini says, “The hierarchy of your values dictates your financial destiny” and is why many of us don’t have an income problem, we have a spending problem.

 

The peer pressure to spend comes at us from all angles today. But knowing your individual goals and dreams, having a plan to manage your money while managing your friendships, can help you avoid financial mistakes caused by peer pressure.