Spending

How to resist peer pressure and keep yourself from overspending

Twenty/20

Bernadette Joy spent $1,200 on alcohol while out in New York City one night a decade ago with a few friends, whose names she can't even recall. Now a 30-something entrepreneur who has paid off hundreds of thousands of dollars in debt and who documented her debt-free journey on social media and podcasts, Joy says the memory of this night still makes her wince.

"Isn't it telling that I don't even remember who else was there?" she says. "Not because of drinking, but because years later all I remember about that night was the bill, and clearly none of the other people were interesting enough to remember."

While the $1,200 was more than she usually spent on a night out in her early 20s — and, to be fair, it was someone's birthday — overspending at bars was common for her. During the first two years after college, she spent about $10,000 on drinks and dinners, primarily because she didn't want to be left out of social situations.

She's not alone: Almost half, 48%, of millennials have overspent, even potentially going into debt, to keep up with their friends, according to a 2019 CreditKarma.com survey.

Since those first few years after college, Joy's spending trajectory majorly shifted, and she paid off $300,000 in debt in four years by living a minimalist lifestyle. Here are her tips for resisting peer pressure and overspending:

Filter your social media

Joy phased out any social media that made her feel bad about her financial reality and started following hashtags like #debtfreecommunity. Now, she gets to see people who encourage her to save, she says, as opposed to the "social media accounts where it's like, 'I'm in Greece with my Louis Vuitton,' without giving you the actual story of whether they can actually afford it."

Don't be afraid to say 'no'

As she's gotten older, she's overcome the fear of being The Cheap Friend, she says: "People are afraid and don't want to look like the person who is never buying rounds, because there is always that one person in the group that is always taking rounds and never buys one."

Instead, she suggests, opt out of the "rounds" and just buy a drink or two for yourself.

Socialize around food instead of alcohol

"Go out for tacos or a casual dinner instead," she says. You can have the same conversation, without yelling over loud music. And once you finish your meal, you can be done spending.

Host fun nights in

Invite your friends over for a board game night, as Joy started doing in her mid-20s. "I was like, 'Are we lame?' because here we are staying in on a Friday night, but we would order pizza and be up until 2 a.m.," she says. Basically, she realized, it was "the same thing, but I wasn't hungover the next day. I still had fun."

People are afraid and don't want to look like the person who is never buying rounds.
Bernadette Joy
entrepreneur

Another way to eliminate peer pressure is to surround yourself with people who encourage good habits.

Get inspired by your friends' good money choices

Consumers who find out they spend more money than peers of similar income tend to cut back their spending. That's according to research done by the University of Chicago with data from Status Money, a platform where consumers can compare their finances to those who make similar amounts of money. Those making $40,000 per year decreased their spending by 19% after seeing what their peers spent, while those making $120,000 decreased their spending by 10%.

Cofounders of Status Money Majd Maksad and Korash Hernandez both previously worked for financial institutions where they saw that many people weren't making rational decisions with their money, Maksad says.

"Financial inertia mostly comes from a lack of understanding and fear you are going to make the wrong decisions," he says. "Fear of making the wrong decisions means you don't make any decisions at all. With things like switching their loans or refinancing or moving their investment to a new provider, people need social proof that other people are doing the same thing. They are the outlier, and they could do better."

More from Grow:

Get the Grow Newsletter Every Week
Weekly money news and advice to grow your wealth, delivered straight to your inbox.
Weekly money news and advice to grow your wealth, delivered straight to your inbox.
 

acorns+cnbcacorns cnbc

Join Acorns

GET STARTED

About Us

Learn More

Follow Us

All investments involve risk, including loss of principal. The contents presented herein are provided for general investment education and informational purposes only and do not constitute an offer to sell or a solicitation to buy any specific securities or engage in any particular investment strategy. Acorns is not engaged in rendering any tax, legal, or accounting advice. Please consult with a qualified professional for this type of advice.

Any references to past performance, regarding financial markets or otherwise, do not indicate or guarantee future results. Forward-looking statements, including without limitations investment outcomes and projections, are hypothetical and educational in nature. The results of any hypothetical projections can and may differ from actual investment results had the strategies been deployed in actual securities accounts. It is not possible to invest directly in an index.

Advisory services offered by Acorns Advisers, LLC (“Acorns Advisers”), an investment adviser registered with the U.S. Securities and Exchange Commission (“SEC”). Brokerage and custody services are provided to clients of Acorns Advisers by Acorns Securities, LLC (“Acorns Securities”), a broker-dealer registered with the SEC and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”) and the Securities Investor Protection Corporation (“SIPC”). Acorns Pay, LLC (“Acorns Pay”) manages Acorns’s demand deposit and other banking products in partnership with Lincoln Savings Bank, a bank chartered under the laws of Iowa and member FDIC. Acorns Advisers, Acorns Securities, and Acorns Pay are subsidiaries of Acorns Grow Incorporated (collectively “Acorns”). “Acorns,” the Acorns logo and “Invest the Change” are registered trademarks of Acorns Grow Incorporated. Copyright © 2019 Acorns and/or its affiliates.

NBCUniversal and Comcast Ventures are investors in Acorns Grow Incorporated.