The people you hang out with the most have a huge impact on how you live your life and the choices you make. Here are a few ways they affect your career and your financial situation.
It may not seem polite to consider the impact of friends on your finances and your career, but there's definitely a connection. This connection is more important in your 20s and 30s since choices are made and attitudes are established that can determine your future success or failure.
Let's look at specific ways that your friends affect your finances and career.
Your friends and your career
If your friends have strong career aspirations, you probably do as well. It's probably part of the reason why they're your friends. But if your friends have little or no career aspirations, there's a very good chance that you won't either. Part of this is because we all seek approval and affirmation from our friends -- that is, we all want to be a part of the group. That need for acceptance could cause you to restrain your career aspirations for fear of not fitting in your social circle.
You've probably heard of the term "type A" personality. Well, there's also a type B personality. The concept of type A and B personalities is actually a psychological theory that dates back to the 1950s. A type A personality tends to more uptight and tends to be preoccupied by schedules and speed of performance. A type B tends to be more relaxed and is more creative and philosophical.
But it's likely that the majority of people are actually "type C's" (sometimes referred to as "AB types") - a mix of both A and B. If this describes you then you may be torn in between career progress and your friendships.
Your friends and how you spend
Friends influence how we spend, there's no doubt about that. Let's look at these three types of spending personalities:
Spendthrifts -- they have $10, they spend $11.
Those who have already "arrived"
Those who are committed to "living large" -- finances be damned. (That's one of those lifestyles that looks appealing on the surface, but often has deep roots in fatalism-- "eat, drink and be merry, for tomorrow we die").
Trying to keep up with any of those three types of friends can have you living life on the edge of bankruptcy. These kinds of friends affect your finances because they keep you spending money, even money you don't have.
Debt is often part of this type of social equation. You'll never be able to earn enough money, so you borrow what you don't have. Before you know it, you're on a debt treadmill that you can't get off.
It can be very difficult to keep friends when you're trying to lower the cost living and improve your finances while they are out spending money on entertainment, taking high-cost vacations (and wanting you to come along), buying a new car every five years, and living in a place that you can't remotely afford.
If this sounds like you, you'll need to talk with your friends about participating in more budget-friendly activities. Or you should find additional social circles that offer fun on a budget.
Your friends and your savings
Saving money is closely connected to how you spend it. The less you need to spend, the more you'll have available to save. This will be easier to do if your friends share your vision of living modestly, and saving generously. You may even find yourself swapping strategies with them to figure out how you can all live better on less money and have more available to put away for the future.
However, it is a reality that many people have no future orientation whatsoever. They simply want to enjoy the present, to the greatest degree possible, and hope for the best in the future.
These are the spendthrift and living large friends, who will make it impossible for you to save money if that is your goal in life. Like an alcoholic who needs to be surrounded by drinking buddies, they may even decide that you have little in common because of your orientation toward saving money.
Your friends and your investments
It seems that people either invest their money or they don't. Which group you
hang with can impact your commitment to investing.
To put it another way, while you're talking about investing, they're talking about spending. Those are polar opposite objectives. Either you'll have to drop the investment talk, or find another group of friends who share your passion for it.
There's more to this than just a difference of opinion. Most of us need some sort of reassurance when it comes to investing, particularly at times when financial markets become volatile. Whenever we're distressed about anything, talking about it with our friends is a natural occurrence.
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