How to handle financial peer pressure

ABS-CBN News

Posted at Jun 18 2016 09:43 AM

MANILA - Choosing your friends is not just about having someone to help you through thick and thin. They can also influence your financial decisions.

Speaking on ANC's "On The Money," registered financial planner Paul Erick Tiu explained that asking advice from friends, especially on financial matters, can both be negative and positive.

"There's a good and a bad to it. [It] depends on which friends you are talking to," he said, adding that advice from friends who are in a different financial situation may not be very helpful.

"You want to listen to your friend who starts in the same situation as you," Tiu added.

According to Tiu, friends can also affect your finances in different situations, like when you go out with them or you travel with them.

Buying new gadgets and other items because you saw them on your friends or on social media can also affect one's finances.

"A large part of it is your mental state. It's more of envy, pride, and basically, wanting to be in. So the best trick there is to really know your goals, stick to your plans and just avoid things that divert you out of your plans," Tiu said.

For Tiu, social media can have both positive and negative effects on a person's finances.

"I see social media as a double-edged sword. It could be a positive thing, it could be a negative thing," he said.

If you are suffering from financial trouble, it would be unwise to follow the trend and buy anything you see on social media.

"Of course if you are going down the drain with your finances, and you see people posting things that are not necessarily aligned with your financial goals, it would turn you down. It would really push you down outside of your financial goals and pull you in a loop of financial trouble," Tiu said.

Social media, however, can also have a positive effect if one uses it as a benchmark or as an inspiration to rethink their financial situation.

"Basically viewing it as something that is positive and enriching yourself rather than thinking, 'Oh I have to be like my friend, I have to spend this much,'" said Tiu.

Setting borders, especially with friends, can help improve your finances, he added. Choosing your friends can also be beneficial.

"What I really recommend is finding friends that are in your situation, were in your situation that have achieved a lot or have progressed or can really influence you to do better."