There are a lot of kids in my neighbourhood. One day I found a bunch of kids (some 10-14 years) talking about all the places they had been during their vacation break. They talked about what they shopped, the video games they bought, the different cuisines they ate. It seemed to me that there was a competition among children on “Who went to the most exotic location and who had bought the most expensive video game?” Though the incidence ruffled me a bit but I totally forgot about it until yesterday when I met a old friend of mine.
So I was meeting this friend after a long time. I have known him for last 12 years now and we had done our graduation together. I carry a not so expensive Android Phone (under Rs. 10K) and he was carrying Apple iPhone 7. He asked me about the reason why I am carrying such a phone and then immediately opined that it (such a phone) doesn’t look nice. But when I asked him about why doesn’t it look nice, he had one simple answer –
“dude you are earning well; you need to have a better phone“
And then it struck me. It is not the kids who are suffering from financial peer pressure but us. And worse we are passing on to our insecurities to our children. We are passing on-to them our maddening and constant rat-race to cope up with others financially.

Though disposable salaries are increasing but still chances are pretty high that so called such exotic lifestyles are running on huge EMIs. And such people are in huge debt.
“Consumption of Financial Leverage is very addictive. Though it gives you momentary dopamine but puts you in further debt”
So how can we as adults learn to cope up with financial peer pressure? If we will learn to do it, we will surely inculcate these values in our children. Here are 4 actionable tips to fight financial peer pressure –
- Social Media is Sham: Yes, Social Media is a sham! Social Media has now become just a channel to show off. And with everyone putting their only the best things (vacations, shopping items etc) on social media, it becomes difficult to maintain the right perspective. It happened with me around 10 months back. Every time I used to open my Facebook Feed, I used to find some friend or the other travelling to exotic locations. I felt as if I am not travelling at all. But then sanity prevailed. I calculated the trips I did during the last year and found equal vacationing time. (Yes I actually did that 😛 )
- Focus on Creating Memories: I am sure this is the most cliched thing you have read today but it is indeed true. Efforts should go in creating long lasting memories rather than momentary happiness. For example – I, no longer give expensive wedding anniversary gifts to my wife but gift both of us long road trips. We have covered entire Rajasthan (travelled 2500 KMs), Amritsar+Dalhousie (1500 Km), Gujarat (around 2000Kms), Chandigarh(500 Kms) and will soon be travelling to Dharmshala+Mcleodganj (estimated 1200 Kms). Not only we have gotten out of the competition (of what gift did you get?) but also have created tons of memories which we will cherish throughout our lives.
- Pay Yourself First: Pay Yourself First means saving and investing a specified portion of your salary before you start paying to banks (for EMIs), vendors, E-commerce companies or Credit Card Companies. This will inculcate financial discipline within you. The right way to go about it is –
- Fix up your financial objectives
- Work with a financial planner to work backwards to calculate how much you need to save every month to achieve those objectives
- Invest that amount as per planner’s suggestion
- For Example – I planned my early retirement using this sheet. I worked backwards to figure out how much do I need to save. And now I invest that amount through Mutual Funds SIPs. Since they are automatically deducted from the account, now I plan my expenses accordingly. In-fact I have started to believe that my salary is the left-over amount.
- Learn to Say No: We humans exhibit a very strong mental model called Consistency Bias. According to this bias, we want our present behaviour to be seen consistent with the past ones. Therefore if will stretch ourselves beyond our financial means today, chances are pretty high that we will do the same tomorrow as well. On the other hand, if we learn to say No whenever we are out of budget, chances are we will stay true to this behaviour every-time we face such a situation. Hence fix up a budget and stay loyal to that budget. If things go out of that budget, then don’t hesitate to say NO.
I am sure all of us would have surely made some or the other financially unwise decisions purely out of peer pressure but the trick lies in opting out of this competition. And the sooner we do that, the longer will our happiness remain.
Wonderful thought !
I think, it all depends how rationale you have grown up.