Five tips to resist the social squeeze on your finances

2024-07-05  3 minute read

Pamela Meger

Lifestyle Debt

Peer influence affects everyone — and it can have a significant impact on your spending habits. You may find yourself spending too much money on a night out with your friends or making larger purchases to keep up with their lifestyles. This is called the social squeeze, where you spend more money than you have on lifestyle or social obligations.

Smiling couple planning home renovation standing in living room

These unnecessary purchases can lead to debt, and it is important to take the right steps to resist peer pressure to overspend. These five tips can help you resist the social squeeze on your finances:

1. Understand the power of peer influence

Peer influence is everywhere — and can be felt through subtle cues, societal norms, and the desire for social acceptance. The urge to keep up with the spending habits of your peers can feel overwhelming. It may cause you to buy the latest technology, fashionable clothes, or extravagant experiences to fit in with others.

Social media increases the power of peer influence even more by presenting curated glimpses of luxurious lifestyles. This fosters a culture of comparison where many people spend more than they can afford to keep up with their peers.

2. Recognize your triggers to spend

It is necessary to identify the triggers that cause you to spend money to combat peer pressure effectively. Consider your purchases and what motivated you to buy these items — such as the fear of missing out, the need to fit in, or the desire to impress others.

Reflecting on your motivations can reveal the root cause of impulsive spending behaviours. This empowers you to make conscious choices that align with your values and financial goals.

3. Develop financial literacy

Knowledge can help protect you from excessive spending. Educating yourself about budgeting, saving, and investment strategies can help create a sturdy foundation against peer pressure.

It is also important to understand the difference between needs and wants, the true value of possessions, and the long-term consequences of your financial decisions. This can help provide a sense of empowerment and confidence in your ability to resist peer influence.

4. Build a supportive network

Surrounding yourself with like-minded people who also recognize the importance of financial responsibility can help create a supportive environment that helps you resist peer pressure. Engaging in activities that don’t revolve around spending — such as outdoor adventures, creative pursuits, or volunteering — can help strengthen these friendships based on your shared interests rather than your spending habits.

5. Practice setting boundaries

Learning how to say no graciously can help protect you against the pressure to overspend. Communicating your financial constraints and personal boundaries effectively can help your peers both understand and respect your position.

Confidence in your choices and the courage to stand out from the crowd are important skills. Regularly practicing setting your own boundaries will help protect you from overspending and support your journey toward financial independence.

Take control of your finances

Resisting the social squeeze can be challenging, and requires self-analysis, knowledge, and resilience. Understanding the power of peer influence, recognizing personal triggers to spend, and building a supportive network are important elements to help you resist financial peer pressure. Additionally, developing financial literacy and practicing setting boundaries are essential steps on the path toward financial freedom.

Contact a Licensed Insolvency Trustee (LIT) if you are feeling overwhelmed by debt or financial stress. Our LITs can sit down with you and help you review all the debt relief options so that you can choose the debt relief solution that works best for your unique situation. Together, we can help you take control of your financial future. 

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