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These 5 red flags could mean you’re spending money on keeping up with friends and family rather than taking care of your own financial needs and building your generational wealth! If you see yourself in any of them, maybe it is time for a change – for the better! And we’ve got some advice that will show you how.
Red flag 1. Using debt to fund non-essential expenses
Buying new cars or designer outfits on credit so you can fit in with the cool crowd? Using debt to buy something you don’t really need just because friends and family are doing it is bad financial news.
Red flag 2. Going all out on gifts and gatherings
Your friend’s party for her toddler featured a designer cake and a professional photographer. Your child has a birthday next month, and you dream up a plan for a more elaborate party so you don’t disappoint.
You love to appreciate your friends and family, but lavish gifts and gatherings are a waste of hard-earned cash.
Red flag 3. Delaying downsizing
You know you need to make some big budget cuts, but you delay making decisions. Why? You want to save face with friends and family.
Whether you need to sell a second family car or put your kids in a school where fees are more affordable, the sooner you make the decision the better.
Red flag 4: Lying about money and the true state of your finances
You don’t have to share all your money secrets, but lying about what you can and cannot afford can lead to money decisions that destroy your wealth!
When you say yes to every outing and agree to loan friends and family money simply because you want to avoid saying ‘I cannot afford it’, you are putting your financial plans on hold and risk taking on a whole lot of debt.
Red flag 5. Buying the latest model phone, TV and/or car
Because everyone else has it and it looks cool, isn’t a good reason to part with your money!
Your new model phone does exactly the same as the old model, so does the TV and the car. Do you really need the latest version at a high price? The cool factor rapidly disappears when the repayments start!
Say no to peer pressure
You’ve identified the red flags, but dealing with peer pressure is an “easier said than done” matter! You can do it, using some of these tips.
Don’t compare yourself to others
They say that comparison is the thief of joy. Always remember that you and everything you do, are good enough, always! Everybody has their own journey, and you need to stay true to yours.
Find positive money role models
These are friends and family members who are getting it right and living within their means, saving and investing and saying no when they need to! They are not the influencer on social media or that spendy friend. Unfollow social media connections, family and friends who aren’t positive role models, and surround yourself with people that are.
Set your own financial goals and have a plan to achieve them
Decide what’s important for you and where you want to put your money to work, such as a new car in five years or a 50% deposit on a home. Then draw up a plan to achieve these goals. A financial adviser can assist and offer valuable advice and recommendations. Monitor your progress and commit to the plan, especially when there are temptations such as friends and family on a Black Friday spending spree!
Use the 50 | 30 | 20 budget rule
This rule allocates 50% of your income to needs such as housing, food, and transport; 30% to wants, like hobbies and entertainment; and 20% to savings and investments. Use it as a guide when you budget to ensure that not only are your needs covered but that you aren’t overspending on wants. You can use the 1Life Insurance 50 | 30 | 20 Budget rule calculator to help you.
But still enjoy your money
Be proud of your financial expertise and what the money you worked hard for can buy! Manage your money well and you will achieve financial independence, a beautiful home and money to live comfortably – guilt free! Don't be afraid to spend what you have if it is within your means!
Tough budget love will lead to financial independence
Sometimes you need some tough love! Be prepared to say no when you need to so you can achieve your financial goals and grow your generational wealth. You’ll start seeing results quickly, especially in your budget and bank balance. And money in the bank is a great way to get ahead in 2025!