Although you might not normally be the type to be influenced by the behavior of others, there are actually three main reasons why people are sometimes tempted to emulate the spending habits of others.
- The “keeping up with the Jones’s” effect. They don’t want to be seen as any less affluent than the people they associate with and so they not only match the latter’s spending, but even outdo it.
- Watching others spend freely gives them a sense of entitlement, even though they may not be able to afford the expenditure. They tend to think, “If they can, then why shouldn’t I be able to?”
- The loss of self-control. Although it’s often easy for people when they’re alone to talk themselves out of spending their hard-earned cash on things they don’t really need, being in the company of big spenders can tempt some people to think only of today and deal with the consequences later.
Think about the people you associate with and whether any of them have any of these effects on you. If so, you might want to think carefully about the situations in which you meet with them to reduce your chances of letting yourself be led astray.