Friendships are a vital aspect of life, but if you’re breaking the bank to hang out with your pals, you might want to think twice about who you’re hanging out with. If you’re incurring debt to spend time with your pals, they may be too expensive for you to spend time with them, or they may belittle your worldly goods.
If you’re trying to save money or pay off debt and your friends don’t support you or understand your goals, they might not be the best people to keep around.
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While achieving financial goals is a personal activity, our ability to do so is influenced by the people we surround ourselves with, whether we realize it or not. Family members can have an impact on how we spend and conserve money in addition to how we feel about money. It’s crucial to think about whether or not our closest relationships are advancing us or impeding us because of this. Do you worry that you won’t have enough money for your friends?
Here are some warning indications that they are too expensive for you.
If the idea of having fun includes spending money always
Spending money is always part of their definition of enjoyment. You’re unable to recall the last time you visited with a friend other than at Happy Hour or a trip to the mall. If you are spending more money than you are getting out of that connection, it might be time to reevaluate it.
A certified financial planner with The Wealth Group, Mike Earl, advises that if your friends’ notion of fun often involves blowing a lot of cash, they might not be the best choice for your long-term financial stability.
They depreciate any of your possessions in their remarks
You constantly feel mocked or criticized for your way of living. This is another clear sign of an unhealthy financial divide between friends.
“A friend is not truly your friend” if they treat you like an outcast because you drive, dress, or travel in more subdued ways. “Your friends shouldn’t support you getting expensive things; they should support your financial success.”
They don’t respect your budget
Financial strain in your friendship is evident if your friend pushes you to spend money that you don’t have. But a less evident sign is a friend who just doesn’t respect your decisions. If a friend disregards your spending restrictions, consider whether they appreciate you because your budget reflects your own values. According to a financial advisor, you ought to be able to inform your friends that you have a budget in place. You should be able to gracefully decline an invitation to go out with them if it doesn’t fit into your plans for that month and say you’ll be there the next time.
You are incurring debt to pay for them.
If you are using your credit card to make purchases so that you can hang out with your buddies, use extreme caution.
If you don’t budget for those special dinners or weekend getaways, the short-term happiness may be rewarding, but the long-term impacts may be damaging to your financial stability.
According to Northwestern Mutual CFP Scott R. Cohen, “If spending time with your pals is something important to you, make sure you’re setting money aside for that reason.” This will prevent you from using money set aside for other obligations, such as paying down a credit card, building an emergency fund, or saving money.
You keep giving them financial assistance.
Is a friendship really worth the expense if your friend is continually requesting money? Yes, it’s crucial to support your friends, but maintaining your financial stability comes first.
Cohen advises keeping tight track of your “donations” to friends to make sure they stay inside your balanced spending plan.
Using your best judgment, being clear about whether it’s a loan or a gift, and adjusting expectations in accordance with that always help.
They oppose your financial objectives.
Even if it means changing how you spend time together, true friends want to see you succeed. Your close friends should encourage you if you decide to cut back on eating out in order to pay off your student loans more quickly.
“That doesn’t mean you won’t eat out together at all, but it might mean choosing the one- or two-dollar-sign rather than the three-dollar-sign hip new restaurant,”
They have little desire to put money down for the future.
Although your pals don’t have to have the same financial objectives, you should be aware of any friendships that might be preventing you from investing in your future.
You want friends that set aside money to pay off debt and save/invest for the future because “we become like the people we spend time with.”