Have you ever wondered if your friends are making you broke? Very few of us are what psychologists and marketers call “social proof.” Basically, it’s the human instinct to reflect the behavior of others when we are unsure of what to do in a given social situation. When it comes to spending habits, we humans are particularly susceptible to this and there’s even a catchphrase for it: keeping up with the Joneses.
The truth is your friends can seriously affect your financial bottom line.
That’s why it’s important for military spouses to get money smart and cultivate the right kind of “money tribe.”
Who is in your money tribe?
The motivational speaker and entrepreneur Jim Rohn once said, “You are the average of the five people you spend the most time with.”
Those around us subtly (and sometimes not so subtly) can influence our values and our spending decisions. Studies have shown that we spend more when we shop in the company of others. And seeing the possessions that other people have, whether it’s a fancy car or the latest tablet, can make us long to own those things too.
Wish you knew more about finance? Look in your circle of friends or family for someone who seems to have their fiscal act together and pick their brain. Now, that’s smart money.
Other members of your money tribe might include:
- Spouse/Significant Other
This is probably the most influential member of your tribe. Have you had a serious money talk with your mate? If you haven’t had one lately, perhaps you should take the time to have a refresher discussion. Most people include their partners in major financial decisions, like house and car buying, but are also influenced every day in countless smaller ways. Do you buy the fancy-pants coffee by the pound to make at home or the less expensive stuff in a can?
Let’s face it, your friends have a lot to say when it comes to spending your money. How many times have you been convinced to buy a pair of jeans or a piece of clothing at the mall because your buds told you it looked cute? And once you got home, you realized you would have never bought it on your own? Or maybe it’s that you wouldn’t typically go out to eat or for drinks if your group of friends didn’t happen to go out every weekend.
Your extended family tribe can influence what you buy, where you vacation, even the Christmas and birthday gifts you give.
Your coworkers probably make an impact on a variety of seemingly small spending decisions, such as how you dress and how you spend your lunch hour.
Is Your Money Tribe Making You Spend More than You Should?
Recognizing who your tribe may be the first step, but an important second step is figuring out whether that influence is causing you to spend in ways that are outside your comfort zone. Maybe your coworkers go out for lunch every day and it would seem antisocial to not tag along. But that can add up to almost $2,000 a year, assuming a $7 lunch, and even Wendy’s can run more than that. $2,000 a year! Going out every weekend or giving costly gifts that you can’t afford simply because your brother’s family seems to expect it can also cause your budget to spiral out of control.
Smart Money Tips to Help You Find the Right Money Tribe Members
Obviously, you can’t change your social group overnight and you can’t change who your relatives are. But you can be more aware of how others affect your spending habits and even consciously seek out new members for your money tribe.
Seek Out Similar
Find that neighbor, coworker or friend who seems to share not only the same interests, but the same spending wavelength. Or even hang out with someone who seems to financially behave the way you’d like to behave but somehow can’t. If you are in a financial crisis, you may have to temporarily put a little distance between yourself and friends who would encourage you to spend in a way you cannot afford. You may even want to take a trusted friend or relative into your confidence if you need help planning your spending. They could turn out to be a valuable support network.
Related: FB–Not Facebook, Flexible Budgeting!
Find Your Jedi Master
Wish you knew more about finance? Look in your circle of friends or family for someone who seems to have their fiscal act together and pick their brain. If you feel that you are getting too personal or are embarrassed to ask questions, recruit an outsider into your tribe. Maybe it’s the financial counselor available through your installation’s family readiness center or one of the confidential counselors you can access through Military OneSource. Maybe it’s someone at the credit union or the local cooperative extension office. You can certainly use a financial guru as one of the honorary elders of your money tribe.
By consciously gathering a supportive and understanding money tribe around you, you can not only avoid potential pitfalls, but can also help yourself achieve financial success.
How do you stay social without busting your budget?