Letting Go of Financial Peer Pressure

Over the years, I’ve noticed that moment when each of my children started caring about what other people think of them.   child kid counting money learn

One by one, I’ve watched as the opinions of others become a big deal in their own decision-making.

As smart, mature adults, we have a term for that: peer pressure.

You know, that dumb thing we all left behind in high school.

Except for one teeny, tiny problem.

Graduation didn’t make us immune to peer pressure.

What other people think of us continues to affect the decisions we make.

One very obvious example is what I call the Minivan Paradox.

On paper, minivans are awesome.

There’s tons of storage space, many have sliding doors on both sides and they get good gas mileage for their size.

The only problem?

They look goofy.

Especially in cool, mountain towns like the one where I live.

So even though they may represent the ultimate in functionality for a family of four or more, my family buys a sport utility vehicle instead.

I admit it: We’re worried about what everyone will think.


And it’s exactly what those silly teenagers are doing.

Maybe the minivan example doesn’t resonate with you.

But at some point, most of us have allowed other people to influence us to the point that we made financial decisions based on their values instead of our own.

This can cause all sorts of trouble in our financial lives.

Instead of making financial decisions based on what will be best for us, we start doing things based on what others will think.

If we’re not clear about who we think we are, our own values and our own goals, then we end up spending in ways that are meant to keep up with the Joneses.

We end up trying to live other people’s financial lives.

The solution to this is to stop caring, which is far easier said than done.

But I’ve had numerous discussions over the last 10 years with people who have gotten to the point where they’ve simply had enough.

They say, “I don’t care anymore. I don’t care what my neighbors think about me. I’m sick of living that life.”

Most of the experiences I’m thinking of are pretty significant.

They decide to sell everything, downsize and live a simpler life.

While that can be effective, and it’s certainly interesting, there are less extreme ways to go about it.

The first thing we can do is to be intentional about it.

I know that sounds obvious, but I’ve found that very few people actually pay attention to how and why they use money. piggy bank broke bank money lose saving

When pushed, they have a hard time separating their “why” from someone else’s “why.”

Try this.

Pull out a piece of paper and write out what’s important to you financially.

Make sure that your list reflects what matters most to you.

It’s a process intended to help you get clear on what you care about versus what everybody else cares about.

The step after that is to slowly try to align your actions with what you discover (as I’ve written about before).

Turn off your smartphone, step away from the TV and think it through.

Not sure where to start?

Make a guess, base your next buying decision on that guess and see how it feels.

Do you really like spending money that way?

Then, if necessary, make a new guess.

It may take a few tries to get comfortable with what we want, and that’s O.K.

The goal is to separate what we want from what everyone else wants.

Only then can we start to ignore the peer pressure we all told ourselves we left behind in high school.



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Carl Richards is a Certified Financial Planner and a columnist for the New York Times, Morningstar magazine and Yahoo Finance. He is author of 2 books, The Behavior Gap & The One-Page Financial Plan. Carl lives with his family in Park City, Utah. You can find his work and sign up for his newsletter (which has an international audience) at

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