College students can be especially susceptible to financial peer pressure. Keep reading to learn what financial peer pressure is, how it can affect your personal finances, and how you can avoid it.
Financial peer pressure is the influence from people or society to spend your money in a certain way. While you may think that peer pressure was something you outgrew in high school, financial peer pressure is very prevalent in college and you might fall victim to it unknowingly.
For example, you might be encouraged to order takeout with a study group, buy new clothes for an upcoming theme party, or buy tickets to a concert that “everyone” is going to, even if you don’t currently have the money to pay for it. But fitting in with a social group isn’t the only reason college students can be tempted to spend more money than they have. Today, the fear of missing out (FOMO) plagues college students as well. You may feel like you need to spend money so that you won’t miss out on the latest trend or a once-in-a-lifetime college experience.
Financial peer pressure can be subtle at first — you may be persuaded to buy something small, like a water bottle that matches your roommate’s. But it can lead to risky and reckless behavior. For example, you might be encouraged to use your student loan money to purchase tickets for a vacation instead of putting the money towards your textbooks and living expenses.
Luckily, avoiding financial peer pressure doesn’t mean ignoring your peers or isolating yourself. Here are several tips that can help you stay strong when you feel pressured to spend beyond your means.
When you’re in college, you will be exposed to the lifestyles of many other young people. Some students may come from affluent financial backgrounds, and others may have limited income and savings. Your financial situation may be completely different from your best friend’s or your roommate’s. Many students need to be conscientious about what they spend their money on, and that’s nothing to be ashamed of. Although it’s difficult, try not to compare your finances with those of your peers. Comparison can negatively affect your mental health and friendships. Concentrate instead on your own financial situation and stay true to your own values.
When you’re making plans to spend time with friends, it’s easy for those plans to escalate and become more extravagant than you can afford. However, paying more for entertainment or flashy events won’t ensure that you’ll have a good time with your friends. There are plenty of budget-friendly alternatives that can cure your boredom — and be memorable and fun — at almost no cost, like hiking or hosting a game night. In addition, your campus likely has low-cost or free activities to take advantage of. The activity that you plan may not be as flashy or extravagant as some of the events you see on social media, but as long as you are creative and surround yourself with good company, you can make the most out of any activity.
If you’re struggling to keep up with your friends financially, be honest with them about it. Setting financial boundaries -- and saying “no” to people who mean a lot to you — can be difficult. However, a good friend won’t judge you if you need to cut back on your spending. Hopefully, you will be able to reciprocate this type of support when one of your friends is in the same situation. Besides, some of your best memories in college will likely be made when you’re just hanging out. If you surround yourself with a supportive social group, you’ll realize that an expensive price tag matters less than the people you’re spending time with.
Social media is a great tool to stay connected. However, it’s important to remember that not everything you see on social media is real. Consider unfollowing people and brands whose posts tempt you to make unnecessary purchases or to compare yourself to others. You can take it a step further and start following financial blogs, like students.1fbusa.com, that might inspire you to develop good financial habits and eventually set a positive example for others in your life.
Opportunities to spend beyond your means are everywhere. Having a financial goal can help you make smart money decisions and stay motivated on your financial journey. Having a goal, such as starting an emergency fund or putting aside money for tuition, can help you think long-term about your money and stay focused. Read these financial goals from college students to find inspiration for creating your own goals to keep your finances on track.
Unfortunately, financial peer pressure is something you might have to deal with for the rest of your life. In college, you may feel pressured to join a fraternity or sorority with expensive dues. Later in life, you may be influenced to buy a new car or boat. While the items you feel pressured to spend money on might change, the urge to spend may always be there. You will likely make some financial mistakes based on financial peer pressure, and that’s okay. Over time, you’re likely to get better at handling situations in which you feel pressured to spend. Making an effort to improve your financial literacy will also make it easier to say “no” to invitations that don’t benefit your finances.
While college might be filled with opportunities to spend, it’s also a great time to practice living within your means and following your personal values. After all, the number one person you should look to impress with your money is yourself.