Do you worry your friends are keeping you poor and holding you back?
We all have that one friend right?
The one who wants to go on an unplanned road trip, orders rounds of drinks and spends like there´s no tomorrow. 💸💸💸
Only to later burn out like a toddler on a sugar crash full of remorse.
I actually was that person at one point! Ha ha! I would go on spending sprees and trips then freak myself out and go ultra frugal until I had financially “caught up” again.
Like yo-yo dieting but with my bank account.
It was pretty dumb.
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Why are we so Influenced by our Friends?
You know that saying “you are the sum of your five closest friends”?
The research is clear, we take on the habits of our friends. And can’t help but mimic them sometimes; it’s called ‘mirroring‘.
We copy the traits of our friends, usually on an unconscious level. Back in our hunter-gatherer days our survival depended on it.
It´s a way of showing we´re in-sync with our group.
And It´s not always a good thing.
“If the other person’s mirroring isn’t leading you to a comfort zone, but instead leading you somewhere you don’t want to be, that’s a red flag.
Remember the phrase “misery loves company”?
Being around people with bad habits is dangerous! Especially if you don’t want to adopt those habits.
Ways your Friends might be Keeping you Poor
Going Broke with The Joneses.
You want to keep up with your friends, you see them buying clothes, cars and going on trips so of course then the only way is to go out and spend some money too!
You might feel that your friends always have new stuff and you don´t, so you go on a shopping spree.
Worse of all you might not even realize you´re doing it! This leads to lifestyle creep so even with pay rises you can´t get out of living paycheck to paycheck.
If you can´t keep up with those around you it can mess with your mind.
Comparing yourself to others can lead you down a path of insecurity and unhappiness. How are they buying all this? How much do they earn? Why aren´t I “winning at life”?
Bad habits are contagious and it´s natural to want to fit it.
I definitely went down the road of trying to keep up with The Joneses. Until I started to learn about Personal Finance.
I stopped spending so much, made a budget, paid off debt and started invested.
Soon coworkers started to come to me for advice and open up about their situation.
Turns out it´s true…a lot of The Joneses are living a facade. Their cool cars, full wardrobes and fancy zip codes are hiding an empty bank account.
The book The Millionaire Next Door (I like listening to audios in the car) helped me get a grip on my spending.
Don´t be fooled into thinking everyone around you is doing better. Just because they buy things doesn’t mean it’s the smart choice for them either. Maybe they feel as insecure as you do and are looking for validation.
On the flip side maybe they can afford it. That doesn´t mean you can!
Tough love: Comparison is a thief of joy. You´re the only one responsible for your finances.
They Don´t Have Your Back
Do your friends fully back you in your dreams? Maybe you´re trying to save up for a new car or to launch a small business. Maybe you want to pay off debt?
Some friends will support your decisions, some won´t. It is up to YOU if they are worth having in your life.
If they can´t support your life style choices then it might be time to reevaluate how much time you spend with them.
Friends who are supportive will help push you towards your goals.
They´ll rally together and push you to the finish line and celebrate your successes.
People who are negative will always have something to say. They might even try and sabotage your plans or change the goal you´re trying to achieve to keep you down.
A simple and powerful tool is to recognize how you feel when you´re with your friends. Do they make you feel jealous or regretful of your life choices?
When you´re with a true friend you should feel relaxed and safe.
Friends with a different set of values and money practices than yourself can lead to resentment and conflict that isn´t worth it in the end.
I have friends who earn much less than me and friends with huge wealth who have retired early. It works 👯♀️👯♀️
It´s not about the difference in our Net Worth but the similarities in our values. We respect each other´s journey and find it easy to adapt our plans to accommodate everyone.
Maybe you want to save money but your friends are always splurging. Maybe they don´t care about saving or investing and that’s ok! Just remember not everyone is the same page when it comes to their finances.
The important thing is that everyone feels comfortable. Easier said than done, right?
If you have higher financial goals than someone they might feel uneasy around you, especially if they know how much progress you’ve made.
Maybe they´ve never had to worry about money and you´re the one who feels uneasy around them!
It can take time to settle into a diverse group you feel safe around.
Are you Being Taken Advantage of?
Asking for loans
When I was in College a close friend who was terrible with money borrowed a few thousand off me to pay for a holiday.
Instead of paying me off in one go she paid me $50 or $150 here and there for over a year while I watched her get dressed up every night and hit the town, spending money on cocktails.
I was furious! At myself!
I learned my lesson and now i´m cautious about how I mix friends & finance.
It´s important to know the difference between a real friend in need to a friend that wants to play you.
A real friend will respect your time and money, a flaky one won´t care about either of those things.
My biggest mistake was lending her the money in the first place when I had my own financial goals! I should have just said no…or at least set up milestones for repayment so it didn´t take me so long to get my money back.
Loaning money is a big deal, there´s a reason why bank loans come with pages and pages of fine print.
It is an official contract!
A real friend will treat it that way.
If you can´t afford to lose the money then don´t lend it out in the first place!
You´re not a bank and you don´t have to provide a long winded explanation. You can just say no!
Always left holding the bill
It´s no fun when the bill comes and you have to pay for everyone.
If you have a friend who never stops asking for money, often seems to have “forgotten their wallet” they might be freeloading.
You’re not an ATM machine, you don´t have to finance anyone else´s social life.
The best solution is for your group of friends to agree on how you do things.
Maybe you go halfsies on your bills, or just pay for what you had – if everyone agrees then it´ll be easy to split up the bill.
If they can’t agree and you notice a pattern of constantly paying for more than your share it might be time to do something.
Are your Friends might be Keeping you Poor?
If you’re reading this blog, then I’m guessing that your goals probably don´t align with those around. You´re looking to take the road less travelled in life.
You don´t want to work all day just to spend all your paycheck and have nothing to show for it.
You know yourself and your goals better than anyone else.
So make sure you surround yourself with people who will support those dreams and won’t bring you down in the process!
There is nothing wrong with having different priorities than the friends around you. But you shouldn´t feel judged for you choices.
Surround yourself with people who support your goals and dreams no matter what. Not just when it matches up with theirs!
You have the final say in who is allowed to influence you, so make sure that’s true for all aspects of your life.