Peer pressure was typically associated with teenagers. However, when you assess some of the financial decisions we make, you realise that the need to conform followed many to adulthood.
Peer pressure per say may not be a negative influence if you are challenged to attain financial freedom through genuine methods of wealth creation. However, there are some financial decisions that you would rather not make if you want to avoid the peer pressure trap.
One such decision is purchasing a car you can hardly afford because you want to fit in. For some reason, cars have been perceived as a symbol of wealth.
This has prompted some income earners to borrow, even if it means paying for an old car. They discover soon enough that car maintenance and fuelling is setting them back financially. Trying to maintain this car owner status eventually impairs their ability to save and set aside money for investment.
Another equally money draining habit is hanging out with a crowd that is more affluent than you, commonly known as keeping up with the Joneses.
To try and fit it in, you borrow to purchase the gadgets that your friends own and at the same time live in neighbourhoods where they reside.
Consequently, you spend a bigger portion of your income to rent a home in the 'right' neighborhood and spend money in 'happening' places. Before you realise, you are struggling with high consumer debt in the name of trying to fit in.
Family pressure is another area that compels individuals to make financial decisions that are costly. By trying to impress your family members or in-laws, you end up making financial decisions that set you back.
This usually afflicts individuals who care so much about what people think about them. Such individuals spend whenever the family congregates because they want to be considered generous or wealthy.
However, those who have attained financial freedom will tell you that it's important to minimise wasting time and money on trying to impress people who don't even care.
Related to that is the herd mentality of making decisions simply because everybody is doing so. For example if you told some people that you don't have a personal loan with your bank, they would exclaim.
Why? Because everybody that receives a steady income is borrowing, even if it means having that loan money on their account as they figure out what to do with it.
We are living in a society where the culture of immediate gratification through paying three times the price of the product through borrowing is more acceptable than planning and saving to be able to afford it. Unfortunately, conforming to such societal norms will result in high personal debt.
Despite these pressures, you can be true to yourself and maintain a lifestyle that matches your financial status irrespective of what your friends, family or in-laws think.
Resisting peer pressure takes a lot of resolute and high level of self esteem. Equally important is having a supportive and like-minded partner, otherwise you can easily get derailed from your financial plan.
Delayed gratification will set you up for a secure and comfortable life which affords you financial choices. Also, remember to have some reward system in your financial plan so that you can have fun while creating wealth.
The writer works with Bank of Uganda