Have you ever heard of a proverb, “Tell me who your friends are and I’ll tell you who you are?”?
This proverb is surprisingly accurate because people tend to spend time around people with similar lifestyles, especially those with similar financial habits. You may not even notice that in your daily lives but it is safe to say that your friends heavily influence your financial habits.
Let’s look at 3 different types of friends who can impact your financial habits.
This type of friend is the friend who spends money as if they are paper. These big spenders encourage you to spend like them, always including you in their hangout even when you are broke. If you do not spend as much, you will be criticized for your spending habit, saying that you are stingy and so on.
This type of friend encourages bad financial behaviors, especially going over budget. The way to deal with this is to discipline yourself. Keep your financial goals in mind, tell yourself that “ This is outside of my budget”. If you think you cannot miss this invitation, another way is to negotiate with your friend. “Hey, this is outside of my budget would you mind dialing this down a bit?”. Always prioritize your budget.
This type of friend always says “yes” to you when you talk about spending money whether or not it is necessary. They often remind you how special you are, you worked hard so you deserve to spend on yourself, make yourself happy. Actually, not just when you work hard, it is actually all the time. Not to say that you should not reward yourself but if it is too frequent, reward becomes normal then normal becomes overspending which keeps you from achieving your financial goals.
To deal with this type of friend, there are a few ways that you can try. Try leaving cash or bank cards at home, just carry enough for your needs. This will help you stick to your budget. Another way is to actively avoid places you want to spend. Let’s say you like to shop, then avoid hanging out at shopping malls.
This type of friend is often short on cash. There are 2 types, intentional borrowers or unintentional borrowers. Intentional borrowers may just be cheapskates who want to exploit your generosity and may not return the borrowing. Unintentional borrowers on the other hand, are just borrowers who need to meet their unexpected demand although sometimes, it is quite uncomfortable to ask for your money back.
The way to avoid this is a little bit tricky because you need to be careful to not ruin your friendship while trying to get your money back. If he or she is cool with paying you back, it is the best scenario for everyone. If that is not the case, then you might need to be more careful when that same person asks you for money. This also does not mean you should not help your friend in need. Just make sure that you know what you are getting yourself into and be prepared to accept the outcome, whether you will get your money back or not.
All in all, it is great to have friends who you can have fun with and rely on when you are short on cash. However, you need to be financially responsible and cautious of your friends. It is not anyone’s fault because your financial goals are your personal responsibilities.
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