There are several factors that may contribute to an individual’s debt. Some reasons may have to do with undisciplined spending, while other debt traps may have resulted from circumstances beyond a person’s control, such as divorce or a medical emergency. But there is a common, lesser-known factor that may be contributing to Americans’ debt levels: giving in to financial peer pressure.
The stress of “keeping up with the Joneses” can take a heavy toll on consumers’ wallets and not only lead to credit card debt and insufficient savings, but also make it difficult to reach long-term goals and financial stability. There are several ways to curb this type of dangerous spending and the first step consumers can take is to question why they are making certain purchases, according to MSN.
For example, adults who are shopping with friends and feel the need to make a purchase should ask themselves if they really need the item and how they plan to pay for it. Many experts recommend the “three-day rule.” Consumers who see something they want should walk away and wait. Most people will find that they only wanted the item on impulse and realize they don’t truly need it after waiting three days. It’s also important for adults to know how each decision will impact their finances. Will they be forced to turn to credit? Does making the purchase mean drying up resources for bills or savings? By thinking in these terms, adults may realize that making certain purchases will have costly impacts down the road.
In addition, adults should learn to firmly say no to their friends. Individuals don’t have to go into lengthy explanations about their finances. Instead, adults can suggest alternatives that are more in line with their budgets. Rather than an expensive dinner out, host a potluck. Adults can also carve out a portion of their budget for excursions and fun activities, rather than missing out altogether. Establishing a disciplined money management plan doesn’t mean giving up on all social interaction. But it does mean being wiser and more selective about spending habits. This allows adults to still take part in activities and events with friends and families without racking up credit card debt.