Our social calendars are being saturated with brunches, bachelorette parties, coffee dates, trips to wineries, weddings, and food tours just to name a few. Our friends are impacting our financial situation, there’s no doubt about it. It’s also fair to say we all value our relationships and therefore it’s all worth the money we put into it. The point of this article is not to convince you to stop spending money on events but to simply be mindful of it. Friendship and socialization is a requirement for our mental health and wellbeing but when is too much too much? When does our social life begin to cause financial anxiety?
The Anxious Generation
Millennials are known to be an anxious generation. We confirm with our friends that we are dressed similar enough to the point that we are almost “twinning” and, of course, capture it all for Instagram (or else did it really even happen). We get social anxiety about going to events but we also get anxious if we are not there. The next morning, we get financial anxiety looking at our bank account. Ugh! Perhaps like everything in life, we need to find balance. The question is how can we maintain friendships through meaningful experiences that do not cost an arm and a leg every weekend…
There is a lot of social pressure as a millennial in today’s world. Weddings have become way more than just a wedding. Brides are adding big ticket items to their registries not to mention it’s basically an expectation that bachelorette parties take place in tropical locations. Brunch includes bottomless mimosas and a $20 plate of eggs Benedict that could have cost $2 to make at home. But, if we did that then we would have major FOMO missing out on the “experience”. It’s all so riveting, yet so overwhelming on our bank account.
Financial Social Anxiety
Throughout my own life, I have often felt financial social anxiety. I knew these events, parties, and nights out would be fun but I also knew that $50 every weekend would add up quickly. Saying “no” was one of the hardest words to learn because I’m a people pleaser. Additionally, learning to let go of that which I couldn’t control is a skill I continue to work on. We all want to feel popular and well liked but the fact of the matter is our friends can largely impact our finances. For me, it all comes down to value. I wrote an entire blog about value based spending which you can find here.
There are 3 general categories of people:
- Spendthrifts: Those that spend more than they make (aka bad influencer friends). They can’t save a dollar and think there is nothing wrong with it.
- Cheapskates: Those that make a point to get separate bills because their dinner was $2 cheaper than the others.
- Financially mature: Those that consider the value of money but likely don’t turn down a night out because of money.
Perhaps you fall somewhere in between one of these categories. Go through your friends; I bet you can put each friend into a category. It’s OK to have friends in each category. There is no perfect match when it comes to friendship and that would also be so boring. Rather than trying to look for a perfect money match, attempt to examine your mindset around financial anxiety and assess.
This isn’t about learning to say ‘no’ to your friends or becoming an introvert. You don’t have to sacrifice your social life for finances.
5 Tips to Minimize Social Financial Anxiety (and still go out)
1. Acknowledge Comparisons
Comparing yourself to others is normal and we all do it. That being said, when you are an outsider looking in on someone else’s life realize how very easy it is to hide behind debt. Those that are successful rarely feel the need to flaunt it. Those people have become successful because they don’t live frivolously.
Comparison leads to resentment and toxic emotions. Just because a friend from high school was able to buy a house on her own and can “afford” Starbucks everyday doesn’t mean she is more successful than you. Understand that you don’t know how well she is actually doing without seeing hard numbers. Remember how easy it is to get caught up in swiping the plastic. It can become addicting for some and we have no idea who is living with thousands of dollars of credit card debt.
Focus on improving your life one step at a time rather than comparing yours to others. Our 20’s and 30’s can be tough years because we’re all in different places in life. Respect those differences and move on.
Talking about finances should not be taboo. We NEED to normalize talking about money. Talking openly about finances also allows your friends to understand where you stand financially which allows people to be sensitive to everyone’s needs. Perhaps your friends don’t even realize you’re still trying to pay off debt. People are not mind readers. Even your best of friends may not realize what you are going through financially.
3. Suggest Alternative Plans
When making plans there is nothing wrong with suggesting a less expensive alternative. In fact, your friends might appreciate that as it will benefit them as well. Instead of going out, why not meet up at someone’s house for dinner/drinks. I’ll bring the drinks if you make dinner – it’s totally fair and is still a great way to meet up and connect. Suggesting alternative plans allows you to continue to make memories with your lifelong friends without having to sacrifice much financially. This is not to say never go out again! I love going out and I usually go out a few times per month but not for every outing.
Other options for alternative plans:
- Bring your own food to a winery.
- Have a picnic outside. Bring your own beer/wine/food.
- Search for deals: use Groupon or other couponing sites that could save you money.
- Offer to host and entertain at your house.
- Utilize the great outdoors which is often free! Go to the beach, hike, or bike paths.
- Have a spa night with your girlfriends at home! I’ll bring the nail polish and face masks, you bring the wine!
4. Be Mindful of Spending Habits
Justin & I do not proactively budget however we look at our spending on a weekly and monthly basis. This process allows us to see in totality how much and in what category we have been spending money. Keeping track of finances retroactively like we do may not be the best choice though if you are new to personal finance. You first must set good habits and have a solid money mindset. Budgeting a certain amount of money per month to outings might be what is right for you at first.
One way or another, figure out how much money you are spending on friends each month and assess that value. This process is not designed to shy you away from making memories and enjoying experiences. Writing down expenses/budgeting works to make you aware of how much money you are spending on friends. Remember, it’s perfectly OK and good to spend money on things you value.
5. Only Say Yes to Things You Value
When I finished grad school I made it a goal of mine to only say yes to events that I actually wanted to attend. I was no longer going to do things to help my reputation. I came to my senses and realized that no one has my best (financial) interest in mind except myself.
What matters to me now is different than what mattered to me in college and that’s totally normal. Think about where you want to be in 10 or 20 years and then assess how the choices you make now will impact that. If you value your future then you need to start making smart choices now. And, by the way, it’s not easy to make these choices at first.
There have been nights out and trips that I’ve passed on because it wasn’t valuable enough to me and it was still hard to say no to. Not to say I don’t love and value my friends, because I do, but everything has a price. As you get older, you develop more friend groups and therefore more opportunities for events. Choosing wisely based on values and being mindful of costs will only help you. It takes time and patience to develop this money mindset.
No More Guilt
So why do we feel guilty for saying “I think I’ll pass tonight”? There’s a few potential reasons but it really comes down to the fact that we’re scared of what people will think of us. Otherwise, what is stopping us from saying NO? We’re scared to not be included in the instagram picture and we’re worried we’ll miss out on a new inside joke.
Redirect your focus on you and not what others think of you. Begin to focus on money management. It all comes down to caring about your personal finances. The more your net worth increases, the less you will even have to consider the financial impact of a night out with friends. Don’t feel sorry for yourself for not having the money. Instead, break through these self imposed barriers.
This is a small part of the reason why I am so passionate about personal finance. I have sought out financial freedom for all these years so that I would never have to worry about making decisions based on money. It was my goal to eliminate as many causes of anxiety as possible. Luckily, I hardly ever experience social financial anxieties anymore. I’ve grown up, made and saved more money, and learned to cope with insecurities.