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Always broke? Check who your friends are

October 8, 2009

Alvin wrote a good piece about ways to save money. He has a list of what to do so let me add something NOT to do.

If you are constantly broke, the first question you should ask yourself is, “Who are my friends?”, more so if you’re the type who constantly needs to be around people. Yup, that’s us in our teens, 20’s and early 30’s.

Speaking from experience, peer pressure is one of the biggest culprits that will leave you financially wrecked in your early years.

Here’s the deal. You want to roll with your buddies so you must have a car that’s equivalent in status if not better than theirs. If they put 18″ rims on their rides, you’ll want those too. Bros have to stick together. You hang out at trendy places that burn you $100 bucks on drinks alone because that’s what they do. You want to go on holidays so you can come back and brag about it. You want to impress the ladies and be seen as ‘not gay.’ You want to have the latest gadget to make your friends envious, because you know that the leader of the pack is the most envied of them all.

Yep, the journey to finding your place in the social ladder burns up a lot of $$$, much of which is financed by plastic. Your credit card.

How deep are you in this? Ask yourself, do you lose sleep at night because they made fun of your outdated phone? Do you float on cloud nine because they made some nice comment about your new auto sports kit? Do you want to buy something because you want the attention? If yes, you already know the score. They got you by the balls.

You’ve bascially reached a point where your desire for self esteem starts to convert wants into needs. Without self esteem I can’t show my face to my friends and the world, you’ll say. I need to be somebody. The cost of a new Wii they’re raving about cost only a thousand bucks. My self esteem is priceless. No contest. I’ll buy the Wii.

And with that sort of thinking, by the time you hit 30, you’ll wake up to a warehouse full of old junk, an outstanding credit card bill of $28,000 and a grand savings total of $12.35.

That, I’m afraid, is the reality of why you can’t save.

Now, the title of this piece “Always broke? Check who your friends are” is only half true. Your friends are certainly a powerful influencing factor on how you spend but that’s only half the story. What’s the other half?

The other half is your biggest enemy – you. You’ve allowed your peers to take control over your self esteem and indirectly, your spending habits. Yup, you gave it away on a silver platter.

Its tough. On one hand, you need peer pressure to avoid developing into an antisocial funny-talking outcast. On the other hand, peer pressure can also ruin you. When we’re young, we don’t always know what’s good or bad and our brains aren’t wired for second hand advice. That’s why we experiment. The trouble is unlike our parents’ time, the cost of experimenting has gone up. Waaay up.

I think we become who we hang out with. We let our friends move our wants and needs goalposts, often without us realizing it. Therefore I only have a 2 step process to saving money.

First, tell yourself screw you guys, I’ll decide how good I feel today, not you.

Second, tell yourself I’ll choose my friends. I’ll keep an arm’s length from those that judge people excessively based on what they possess. I’ll be open to anyone, even if they flaunt their wealth, so long as they don’t care what I wear and where I hang out.

Once you do are able to do this, more often than not you’ll find a surplus in your bank account at the end of every month.

4 Comments leave one →
  1. October 8, 2009 11:07 am

    Quick Solution : Get a Rich Chick to pay for everything :p

    random comment :
    Anyway , i think it is the same thing as ..(the other extreme)
    Some people are super thrifty , desperate to save 40% of their income because they want to be richer .
    and why they want to be richer ? same shitty reason , ultimately to show off their new wealth around people .
    So all this could be a process , the only difference is time line .
    and the different approach of , “i wanna hang out with you guys” to “you wanna hang out with me”
    same old root problem .

    Ok, and how much would it cost you to snare a rich chick? 😀

    Showing off is one reason to wanna hoard money. My excuse would be to have enuf to buy my stuff in cash. I’m not one to buy a $100k car on hire purchase and upon finishing payment, discover I had paid twice that amount in interest & finance charges. I rather spend that money on other things.

  2. October 8, 2009 1:34 pm

    i do agree with gappie that there are people who prefer to hang out with the rich folks. so they save n save n save, jz so they can be on the top of the ‘food chain’.

    i think no matter whether someone is thrifty or not, the main question one should be able to answer is – what is my direction in life? if i buy stuff, why do i want to buy it? if i save up, why do i save it up?

    and the reasons should never be “oh, coz my frens do so” or “so that i can look down on everyone poorer”, etc. the reasons should be more than that, something to do with YOU — so that i can pursue my dreams, so that i can start my own biz, so that i can bring my family for a family vacation, etc.

    p/s…. thx for linking my article 😀

    And then gappie wud say why start your own biz? To get rich and show off your wealth to other people? 🙂

    On a serious note, you can lead a regular life at half the current costs if you avoid credit and loans, assuming monthly bank payments eat up most of your pay (car, mortgage payments, credit cards). To do that you need to deal in cash. To have enuf cash you need to save. Showing off… can’t do that when the definition of showing off is to have 3 platinum cards, each spent to the max. 😀

  3. October 9, 2009 2:12 am

    Damien – To tackle a rich chick : For certain guys , an arm and a leg , for certain guys , a pack of condom . LOL .

    Anyway , i am about to buy my first house . So what you’re saying is to avoid financing . Ok fine , how is it possible that some one blow up all his savings on a property ? Where am i going to dig out that RM400,000 . Should i rent and wait till i have 1 mil then pay everything by cash ?

    Actually, that’s precisely what I would do. I would save some, use the investment system to snowball it to the amount I need and then blow it on the house. Meantime, I rent.

    Putting it another way, renting something cheap for 10 years & coming up with $400k cash is better than putting myself in debt (mortgage) for 20 years for the same amount, simply because 10 years of debt-free life has a bigger value to me than “owning” property earlier.

  4. October 10, 2009 3:28 am

    hmmm…fuck.To be honest , i kinda like your idea and your POV .

    Dude , you ok with me asking you a few more questions about debts and property privately ? Coz i am about to make a decision . Can’t find your email dude .

    mine :

    Hey man, sorry I didn’t get back to u earlier. I’ll write ya sometime today. 🙂

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