Is peer pressure keeping you poor?
Is peer pressure keeping you poor?
When I started MyBudget I was 22 years old. It was at a time when a lot of my friends were ramping up their lifestyles. Some of them were spending like there was no tomorrow, while I was stretching every penny just to stay afloat. There were times I felt enormous pressure to keep up with them.
Peer pressure can happen to anyone and the issue is especially relevant to someone self-employed or starting their own business. It takes a lot of courage to go out on your own. It takes even more courage to stick to a budget when it involves missing out on things you enjoy.
The key is to stay focused on your goals. I have a friend who’s saving to open her own yoga studio. She used to be a self-confessed shopaholic. Like Carrie Bradshaw from Sex In The City, she preferred to keep her money right where she could see it—hanging in her closet! These days she recognises that keeping up with the Joneses—let alone the Kardashians—would compromise her budget and dash her business dreams. Instead of going out for dinner and drinks, we now catch up over an $8 movie at a local cinema and popcorn made at home. I’m proud of my friend—she’s worked out her priorities and she’s sticking to them.
You might be thinking “at least a yoga instructor can wear t-shirts and tracksuit pants to work—my clients expect me to look more professional.” Beware that the pressure to look successful can be a debt trap. Re-think your approach if your business model demands going into debt for luxury cars, expensive clothes and other smoke-and-mirror success symbols. It’s good to aspire to do better, but not at the expense of putting yourself under financial stress.
In the early days of MyBudget, I started wearing a uniform to work. It saved me a lot of money and it also saved a huge amount of time because I didn’t have to deliberate over what to wear every day. Twelve years later, I’m still wearing a uniform. I don’t even change for professional lunches or events. I feel good about wearing a uniform and people sense that. Pressure is something that only affects us if we let it.
In The Millionaire Next Door, a fabulous book about wealth accumulation habits, researchers found that people who lived stereotypical millionaire lifestyles (they had expensive homes, new cars, designer clothes etc.) were more likely to be heavily in debt. These are a breed of pretend millionaires. They go into debt to collect the symbols of wealth, but they’re unlikely to ever escape debt and become financially independent. On the other hand, the research found that genuine millionaires are more likely to drive second-hand cars, wear everyday clothes and live on a budget. Which would you rather be?
You can start to resist peer pressure by defining what success and happiness looks like for you. Take a few minutes now to jot down the things that make you feel successful and happy. When most people do this exercise they discover that money is a secondary factor. For instance, spending time with friends doesn’t have to include spending money. An afternoon walk on the beach or a bike ride is usually as enjoyable as dinner at a fancy restaurant.
Are you ready to say no! to wasteful spending?
