How friends influence our financial decisionsLast updated on
Believe it or not, your friends have a huge impact on how you live your life. They may not always tell you what to do but they do influence your decision.
According to science, our friends largely impact our financial decisions including career choices. It might not be the best idea to sit and think about how your friends influence your decisions but it’s important to know, especially in your teens up to your 30s, when the influence is said to be the highest.
If you have friends who spend a lot then you will most likely spend a lot as well. It’s quite understandable why it happens. If your friends go out every weekend to enjoy drinks, you will most probably join ’em and spend the same way as they do, without realizing the difference in your financial standing.
We want to look like the people we hang out with. It’s largely a natural phenomenon. Similarly, you might be inclined to buy clothes or brands that your friends buy as it gives you a sense of belonging.
This is a major reason why it is important to be careful about who you roam around with.
Friends can even impact your saving and investment decisions. Saving is directly linked to spending, the more you spend the less you’ll save. Moreover, it’s common for friends to form partnerships and invest together. You may not be interested in an investment but you’ll do it cause your friend thinks its good.
Technically speaking, there is no harm in being friends with people who do not spend the same way as you do for as long as you do not let ‘em impact your financial decisions.