How to Avoid Financial Peer Pressure in College

How to Avoid Financial Peer Pressure in College-1As a student, you may find yourself in a situation where you’re trying to save money, but your friends are pressuring you to go out to dinner or an event. If you say no, you fear that your friends will be disappointed in you. If you say yes, you fear that you may not have enough money to cover other expenses in your budget. After weighing the options, you reluctantly agree to attend Taco Tuesday after all. Whether you realized it or not, you just fell victim to financial peer pressure. Keep reading to learn what financial peer pressure is, how it affects your personal finances, and how you can avoid it. 


What is financial peer pressure?

Financial peer pressure is the influence from people or society to spend your money in a certain way. While you may think that peer pressure was something you outgrew in high school, peer influence is very prevalent in college. Whether it’s on social media or in-person, students are exposed to financial peer pressure every day. 

Sometimes money peer pressure can be very subtle. You may be persuaded to buy something small, like a water bottle that matches your roommate’s. Other times, giving in to financial peer pressure can cause you to engage in risky behaviors. For example, you might be encouraged to use your student loan money to purchase tickets for a vacation instead of putting the money towards your textbooks and living expenses.

Comparison is no longer the only factor that encourages students to spend money recklessly to please their peers. Today, the fear of missing out (FOMO) plagues college students as well. As a student, you may feel like you need to spend money, so that you won’t miss out on the latest trend or an upcoming event. You might order takeout, buy new clothes, or attend a concert to fit in with a peer group, even if you don’t currently have the money.


How can you avoid negative peer pressure?

College students are particularly susceptible to financial peer pressure. College is likely the first time students are managing their money on their own without help from their parents. Luckily, avoiding financial peer pressure doesn’t mean ignoring your peers or isolating yourself. Here are several tips that will help you handle peer pressure in college.

1. Recognize your unique financial situation

When you’re living on campus, you will be exposed to the lifestyles of many other young people. Some students may come from affluent financial backgrounds, and others may have limited income and savings. Many students will need to be conscientious about what they spend their money on. Although it’s difficult, try not to compare your finances with those of your peers. Comparison could negatively affect your mental health and friendships. You need to be clear on your finances and stay true to your own values. Your financial situation is unique and may be completely different from your best friend’s or your roommate’s.

2. Suggest budget-friendly alternatives

When you’re planning to spend time with friends, extravagant plans and flashy events can really add up. Paying an entry fee won’t ensure you have a good time with your group of friends. There are plenty of budget-friendly alternatives that will cure your boredom at almost no cost, like hiking or hosting a game night. In addition, your campus likely has low-cost or free activities to take advantage of while you’re still a student. The activity that you plan may not be as sophisticated as some of the events you see on social media, but as long as you are creative and surround yourself with good company, you can make the most out of anything. 

3. Choose supportive peers

If you’re struggling to keep up with the expenses of your friends, be honest about it. Setting financial boundaries and saying “no” to people who mean a lot to you can be difficult. However, a good friend won’t judge you if you decide you need to cut back on your expenses. Hopefully, you will be able to reciprocate the support and positive influence when one of your friends is in the same situation. Besides, some of your best memories in college will likely be made when you’re just hanging out. If you surround yourself with a supportive social group, you’ll realize that an expensive price tag matters less than the people you’re spending time with.

4. Keep reality in check

Social media is a great tool to stay connected. However, it’s important to remember that not everything you see on social media is accurate. All of the conspicuous posts from friends and family could lead you to compare your life to others. In addition, the latest product videos from brands and influencers could cause you to make impulse purchases. You should keep reality in check by unfollowing people and brands that tempt you to make unnecessary purchases. You can take it a step further and start following financial blogs, like, to develop good financial habits. Eventually, you may be able to offer positive peer pressure or support to others in your life.

5. Focus on your goals

From gourmet restaurants to expensive apartments, opportunities to spend beyond your means are everywhere. Having a goal can help you make smart money decisions and stay motivated on your financial journey. Having a goal, like starting an emergency fund or putting aside money for tuition, can help you think long-term about your money and stay focused. Read these financial goals from college students to help find inspiration for your own goal to keep your finances on track.


Does money peer pressure ever go away?

Unfortunately, financial peer pressure is something you will have to deal with for the rest of your life. In college, you may feel pressured to join a fraternity or sorority with expensive dues. Later in life, you may be influenced to buy a new car or boat. While the items you feel pressured to spend money on might change, the urge to spend will always be there. You will likely make some financial mistakes based on negative influence, and that’s okay. It’s important to learn from your mistakes, so you’re less likely to make the same errors in the future. Over time, you will get better at handling situations in which you feel pressured to spend. 



After learning how to identify and avoid it, hopefully you’ll be more aware of any negative peer pressure in your own life. At some point in your life, you may be convinced to put every Taco Tuesday meal on your credit card. When tempted, try to improve your financial literacy and say “no” to invites when it’s beneficial to your finances. In college, you will feel financial pressure to keep up with those around you. Try to make sure that you are living within your means and following your personal values. After all, the number one person you should look to impress with your money is yourself.




📚Eager to learn more relevant personal finance advice? Check out Student Finance Tips from 10 College Students.

😩Are you worried about paying for college? Read 11 Steps to Stop Stressing About Money.