2. Purchasing Decisions

b. Know the role that peer pressure can play in your purchases

Peer pressure is a very powerful influence in many areas of our lives, especially in how we spend our money. While peer pressure is often thought of as more common for teenagers and young adults, no one is immune.

Have you ever gone to a restaurant that cost more than you were comfortable spending because a friend suggested it? Or perhaps you’ve gone to the movies when your friends wanted to go even though it took every last cent you could scrounge up? What about your clothes… have you ever spent more than you could really afford on a pair of jeans or shoes because everyone would think they were cool?

People get into financial trouble when they move to a neighborhood or apartment where the people have more expensive taste than the newcomer can afford. Suddenly, they think that they need a new car or nicer furniture to fit in with their neighbors. Next thing they know, they are over their heads in debt because they’re financing a lifestyle they can’t afford.

Something that may really make a difference among our friends, family, and neighborhood is doing service work.  Work for others.  Read to the kids down the hall, pick up trash in the neighborhood, take the elderly person down the street for a walk. It doesn’t cost anything and often takes us out of that “sense of self” that wants material things.  We will be remembered a lot longer in our neighborhoods for doing good than for the kinds of cars we drive.

Irrational Belief:  You’re only as cool as your stuff
Perhaps one of the most common irrational beliefs that many people carry around with them – sometimes without even recognizing it – is that they’re only as good as their material stuff. A similar idea is that people won’t like you if you don’t have the right stuff – whether it’s the clothes, the car or even the phone.

Let’s look at what might be going on in your head and heart by using concepts from the Psychology of Money  Course: