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5 Poor Money Decisions Due To Peer Pressure

>> Tuesday, December 16, 2014

Peer pressure is usually associated with teenagers who are at a phase that they are easily influenced. What comes to mind is the persuasion of friends to try out smoking or drinking. However, it also subconsciously has a huge influence in adulthood when making certain financial decisions.

1. Property
In Singapore, our residential property for most of us will be the single most expensive purchase in our lives. When making the huge decision of which property, the often heard advice is “the bigger the better”. Reason is many people drawing reference from historical performance, property prices in Singapore only goes upward. So, with leverage, the potential for absolute appreciation is better for bigger properties. Hence, peer pressure to get larger units.

2. Travel
A common expensive “hobby” among Singaporeans has to be travelling, so much so that it has become surprising, even shocking, if someone mentions that they have not travelled overseas over the year! In addition, it has become sort of a competition to go more and more exotic locations. Hence, peer pressure to be a globe trotter.

3. Dining
There is now a need to find unique dining experiences during occasions. Be it a birthday, anniversary, promotion treats, farewell and even weddings. Many a times comparison is drawn that the previous time at so and so place was amazing, this time needs to outdo the last. Hence, peer pressure to fancy dining places.

4. Accessories
For lack of a better word, this would be all the things people buy. Like cars, watches, handphones, handbags, jewelry, proposal rings, shoes, clothing, gadgets, etc, just to name a few. It has sort of become a norm that if certain things are not changed in 2 years or if they are not branded, you are classified as a dinosaur or cheapo that owns something belonging to a museum. Hence, peer pressure to keep buying.

5. Gifting
This would be more of a “face” (Chinese – Mian Zi) issue and I just realized that there is simply no direct English translation for this. An attempt to translate will be to preserve the honor, dignity and reputation. So, to save “face”, the gift for occasions need to measure up to expectations. There are even guidelines online for the “market rate”. Gifts mean during occasions like birthdays, weddings, funerals, baby showers and any other celebrations. Hence, peer pressure to give bigger ang pao-s (red packets).

And a sixth one just for parents - Children. This deserves a whole separate topic for cradle to grave. It starts with comparing which gynecologist/hospital, milk powder, childcare, extra classes to growing up tuition and grades. Hence, peer pressure to provide better for children.

Overcoming peer pressure, especially during adulthood, is easier said than done. We may think we have out grown it, but in actual fact, our decisions are often influenced by marketing, the environment, society and simply those around us.

Well, everything within ones means - do not yield to peer pressure and over stretch the finances. Merry Christmas and A Happy New Year!
Are you guilty of the above as well? Do share in the comments.

3 comments:

RetailTrader December 26, 2014 at 8:35 AM  

Great summary! indeed I also notice this amongst people of my age group, at least (early 30s)

Lau December 29, 2014 at 11:39 AM  

RT, thanks for sharing. :)

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