How do I handle the peer pressure to spend money?
Today’s question comes from Nate. He asks:
“Your website is great and it has great views on investing and how to make the most of your money and processes to do it. Two articles that really caught my eye though were the one about buying a house and the social pressure that goes into it and the one about the meditation trip that you took. This is what interests me. I feel I have a very good grasp on how to handle my money. The psychological and emotional aspects of changing are what I need help with, like when you realized after you bought the car and the house that you didn’t need them.
So, how do you handle the pressure from family and friends to spend your money?
I have found that a lot of my money has been thrown away, because “everyone is doing it.” I’m sitting on a hefty amount of student loan debt because whenever I asked my mom about it she said, “That’s normal. It’s what I did.”
I have spent a lot of money at bars and on vacations that I didn’t necessarily need. Not all of the money spent went to waste and some of it I don’t regret at all. There is a lot of fun I had on those trips and during school that I would never take back. However, it could have been greatly scaled back. How do you deal with possibly disappointing the one’s you love and care about the most?”
You’re asking questions most people never ask themselves, and that means you’re the type of person who will choose their own path through life.
And I’m going to tell you this will be the hardest thing for you, because when you’re choosing your own path through life most people won’t understand why you’re doing what you’re doing.
I know, because I’ve done it.
Here’s the thing. Most people follow the conventional wisdom about life: That you should go to college, get a good job in some cubicle farm, and then spend the rest of your life consuming an ever-increasing amount of stuff.
We now consume twice as many material things as we used to 50 years ago, and that’s why the size of the average house in the US has tripled over the same time period, and about 25% of two-car garages don’t even have room for one car.
The things we consume are consuming us.
But most people don’t think about any of this until they’re on their deathbed. That’s when they look back on and realize they spent their one chance at life working for money to spend on things that were never the answer.
This is the easy path.
You see everyone else living beyond their means, and if everyone else is living beyond their means then it must be the way to live. Psychologists call this social proof.
And breaking from the herd is insanely hard.
When I was growing up we didn’t have much money, and because we didn’t have much money I didn’t have nice stuff. Like, in sixth grade my friends had Air Jordans and I had to wear some no-name brand from Payless.
So after college I started buying expensive stuff like that $25,000 BMW and $200,000 condo because I never had nice stuff before, and I saw all my friends buying nice stuff.
But once the novelty wore off, it didn’t make me any happier.
And that’s when I decided spending decades trapped in a tiny gray cubicle to pay for things that didn’t make me any happier wasn’t a tradeoff I was willing to make.
If all that makes sense, you need to break from the herd and figure out how you want to live your life, and then start living your life that way.
And if you choose your own path, other people, even people who love you, won’t know why you’re doing what you’re doing. They won’t necessarily agree with your choices or understand them.
So you’re going to disappoint people.
But you don’t owe anyone an explanation for how you live your life, because who really cares what other people think? This is your life, and you get to do what you want with it.
And I know that sounds very self-help guru-ish, but you’ll never regret living your life how you want to live it. You’ll only regret living your life according to how other people thought you should live it.