However, if being buddies with certain people is draining your bank account and negatively affecting your financial well-being then you might want to reconsider changing these so-called friends.
Not sure if you are financially compatible with your friends? Here are three ways your pals could be preventing you from becoming wealthy:
- You exceed your budget when you hang out with them
You should be able to tell your friends you have a budget and they should respect the fact that you care about your finances and want to live within your means. You are financially incompatible if your friends constantly pressure you to spend outside said budget.
According to Bola Onada Sukonbi, a Nigerian Certified Financial Education Instructor, “In order to build wealth and actually accomplish your money goals, you have to keep your spending under control. Start by tracking your spending in a detailed way — one way to do this is by keeping spending journals where you write down every transaction you make every day for 30 days (reviewing your spending each evening). This exercise will not only show you trends of where your money is going but it will keep you conscious of how and when you are spending”.
- They belittle your lifestyle because it does not live up to theirs
You don't have to be in the same class as your friend or make the same amount that they do. However, both parties should be able to understand where the other person is coming from.
You don't want to have a friend that constantly belittles you because you are not driving the car they want you to buy or not going on expensive trips every other month.
Arese Ugwu, author of “Smart Money Woman,” stresses the importance of being financially responsible over living beyond one’s means.
In her words, “Lots of people in their 20s don’t save or invest because they are waiting to get a better job or start a business to earn more money but the truth is most millennials spend 30–50 percent of their paycheck on entertainment while they claim they are too poor or too young to save and invest but the reality is by the time you get to your 30s you realize you wasted a golden opportunity… time!
“It’s better to start putting a little aside when you have minimal responsibilities and take advantage of the power of compounding interest. You have to find a balance between having fun and having funds. Sometimes It’s okay to miss out to stack up”.
- They have no interest in saving or investing
We all know the popular saying that goes — ‘birds of the same feather flock together.’ This applies here too. If your friends have no interest in saving or investing or simply don't have the same commitment you have towards your financial goals, then you may want to consider getting new friends.
We close with some wise words from Nimi Akinkugbe, a Nigerian entrepreneur, personal finance and wealth management expert, “You worked so hard for your money; you owe it to yourself to ensure you protect it”.