Are Your Friends Ruining Your Finances?

We love to spend. Our society is filled with constant stimulation. Whether it’s a $20 movie ticket or a $2,000 weekend in New York City, there’s always something to do that costs money. Striking a balance between spending and saving is crucial during credit repair. Debt reduction is often the first priority, and you can’t tackle your bills without trimming the fat in your budget.

When it comes to cutting back on spending, it’s important to consider the role of peer pressure in your decisions. While your friends may provide you with camaraderie and support, their influence could also prevent you from achieving effective credit repair. Good friends will help you with your goals. “Bad” or enabling friends will hinder you, especially when they don’t:

Respect your budget.

An active group of friends is usually a good thing. You and your pals may love outdoor sports, fine dining, or the occasional trip, but these perks should never threaten your financial security. Set a monthly entertainment limit and stick to it. If your friends are prone to persuasions, e.g., “Aw, come on, what’s one more drink?” or “The ski trip won’t cost that much. You deserve a weekend away,” then it’s time to take a step back and examine your priorities. Ask your friends to respect your limits and find affordable things to do together. You may feel left out at times, but a night alone is better than years of credit damage.

Split the check.

A moocher is the last thing you need on the road to credit repair. We’ve all had a friend who says “I’ll get the check next time,” or “Could you spot me five bucks?” and never pays it back. While you may feel inclined to be accommodating, it’s not your job to cushion your friends’ spending wallets. Practice saying no in a firm, yet friendly way. Setting boundaries will help you avoid awkward (and unnecessary) moments.

Understand your situation.

Your friends can’t support your goals if they don’t understand them. You don’t have to discuss the details of your bank account to explain your credit repair goals. Try something like this:

  • “I’d love to go to Vegas for vacation, but I can’t blow all my money on gambling and hotels this year. I hate paying off my student loans but I’ll get to spend big once they’re off my plate. Does anyone want to split a hotel room?”
  • “Can we keep dinner casual tonight? I don’t feel like dressing up. We could always have a pitch-in barbecue at my house.”
  • “I’m trying to save some cash this year. Can we look for some affordable things to do this weekend?”

Present the idea of savings as a group activity. Better yet, consider taking a group investment class or personal finance class together. The bottom line: Good friends are sensitive to the needs of their buddies. Allow your friends some insight into your credit repair goals.