4 ways to handle financial peer pressure

Financial peer pressure is, in its simplest explanation, being “influenced to act in a certain way by others (your peers) that affect your well-being”.

While positive peer pressure can encourage you to reach greater financial heights, negative peer pressure can leave a significant dent in your finances.

So, how do you steer negative peer pressure away from hurting your finances?

1: Determine whether the item/event is worth your time and money

It’s okay to deviate from your budget to spend on something worthwhile, provided that:

• You have a proper spending plan,

• Your emergency fund is in place, and

• You are still able to invest 20% of your income monthly.

After the above, can you still afford it?

• If “No”, then see number 2.

• If “Yes”, then it doesn’t hurt to reconsider all the factors that colour your decision.

• If “Maybe”, then it’s time to consider your financial priorities and decide whether and where this item can fit in.

For example, your buddies are going on a trip around the country. This has been the shared dream since your college days and they are insisting you join them. You love travelling so this is a perfect opportunity for you.

Unfortunately, you did not budget for it. What factors do you consider? Here are some examples:

• Is it wise to stretch your budget this month for this?

• Have you been making other financial sacrifices that disrupted your budget recently?

• What other high priority items do you want to use the money for this month?

• Does this really weigh more in priority than other things you want to purchase/save/invest this month?

• What are your alternative options?

• Is this a one-time thing that you will regret forever?

• and the list goes on…

2: Realise and accept that you cannot afford it

The fact that you recognise your affordable limitations is the first step to making a wiser choice.

Don’t get upset because you’re unable to do something. It’s natural for some degree of resentment, envy, or anger because you can’t join in whereas your friends seem to have all the money in the world.

However, pull yourself together and show some maturity. If your decision is for the best based on your financial situation, why get emotional?

Not all friends have the same financial goals as your. Just because you can’t afford it, doesn’t mean they too can’t afford it. Make peace with yourself and accept that this is your situation, not theirs.

3: Respond to your friends with your decision

Peer pressure can sometimes leave you feeling embarrassed or humiliated. However, would you rather lose an ounce of pride or a bucket of wealth?

Toughen up and inform your friends that although you would love to partake in the activity, you finances cannot cater for it.

Maybe your budget is already stretched, you have other priorities to pay for, or you really need to save money right now.

True friends would miss not having you join in but they would also be able to respect your decision. It pays to realise that even if your friends try to cajole you to join them, if your decision is well thought through, you will be able to stand firm with your decision.

You may also choose to propose low-cost options, but be prepared that these ideas may not be well accepted when your friends are excited over something else. Be patient and propose your ideas again at a later date.

4: Plan for the future: Expand your budget

Create a specific allocation for your social spending. Take the budgeted amount in cash only and leave the credit cards in the freezer at home. Be conscious about your spending.

You don’t have to say no all the time. You can choose to opt out occasionally. For example, your friends meet-up every Friday night for happy hours. It can be costly.

Instead of every week, you can join on a Friday after your payday. Redefine your budget for next month onwards and add this consideration in.

Everyone needs friends. You may save a lot of money by foregoing social time with friends. But who are you spending the money on later?

• A true friend takes into account your financial and emotional well-being. He or she won’t judge you, will accept your differences and be supportive of your endeavours.

• If a friend always tries to derail your money goals, it’s time to assess the relationship. This is a good time to pull away from your friendship to take things into account.

• On the other hand, if you always refuse to join, are you being a real friend to your friends? Or do you need to consider hanging out with new people in your life?


It’s essential to recognise that peer pressures are often internal. No matter what your friends say or imply, it still boils down to our own choices.

When you realise you don’t have to spend to impress your friends, a great deal of pressure is lost.

Be the sole guardian of your own financial future. Don’t expect someone else to do it for you.

This article first appeared in https://mypf.my

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