PETE: You’re listening to How Not to Move Back in With Your Parents here on the IU MoneySmarts Radio Network. And I’m your host Pete the Planner and here is Alex.
ALEX: Hello. How’s it going?
PETE: Good, I gotta turn your mic down. About blew everyone’s ears.
ALEX: Coming in real hot this morning.
PETE: People like hey I wanna listen and learn about money. And now I need an ear replacement.
ALEX: Now I can’t listen anymore.
PETE: Welcoming the director of financial literacy for IU that is Indiana University Phil Shuman to the show, hello Phil.
PHIL: Good morning.
PETE: Talking peer pressure today.
PHIL: Woo hoo.
PETE: Peer pressure affects every aspect of our life including our finances. And so Phil, you go everyday, you’re talking to students, you’re designing curriculum. Making sure that people get out of their collegiate days knowing what’s happening with their money. How often do you see both positive and negative impacts as related to peer pressure?
PHIL: We see both, but to be honest, I think we see more negative than we see positive. Just because, you know, you’ve got these wide varieties of backgrounds coming in and for the most part with finances, people always tend to default to the greater lifestyle. So we’ve got students coming in that may not have as much money and they default towards those that come in and have more money just because that’s the better lifestyle to have.
PETE: I think once you’re exposed to the finer things in life, no matter how not fine they are, as long as they are in a better position then what you’ve seen in the past, once you’re exposed to that it’s kind of hard to rewind, right Al?
AELX: Yeah, you don’t want to go back. And in my opinion, college is a time when financial peer pressure will probably be at its peak, because-
PETE: You think so? Now this is an interesting part of the conversation.
ALEX: I feel like I think so because when you’re in college you are 100% of the time surrounded by a large group of your peers and it’s very hard. I mean everyone just wants, everyone is always spending money there’s always something. Your going to get food, you’re going out to the bars, you’re going to movies, entertainment there’s always something going on where people are spending money. And if your friends are constantly spending money and that’s kind of the culture honestly is people spend money, if that’s what your around all the time, then it’s very hard to detach yourself from it.
PETE: All right, Phil, you and I are gonna be two old guys talking about this.
PHIL: All right? Sounds good.
PETE: Alex, we’re gonna analyze your statements.
ALEX: All right.
PETE: What I think Alex has just said is that people in college spend money for entertainment to have a good time. What I’ve experienced as a graduate of college who’s been out for a little while is that people more spend money on status and the peer pressure that comes post graduation is that keep up with the Jones’ and status, and has a lot less to do with actually enjoying life. What do you think about that?
PHIL: Yeah, I would agree with that. I mean, if you think about the way that finances are portrayed in the media the way like if you’re watching a show and they have some sort of college lifestyle, you know, that becomes the perception of what college is supposed to be and that’s the status that everybody is trying to achieve.
ALEX: And that makes a lot of sense to me because it seems like, in college, it’s direct, in-your-face peer pressure. Your friends are literally telling you, come on, let’s go get lunch, let’s go to the bar. And they’ll give you a bunch of crap if you don’t because you wanna save money. I get it all the time when I don’t go out because I’m trying to save money. And then when it becomes, you graduate and it’s about status, it’s more of indirect because although Mr Jones isn’t saying, you need to buy this car, you need to wear this suit, it’s kind of implied in the status of how our society is working that you want to fit that mold.
PETE: I have found over the years, one thing can combat peer pressure and keep up with the Jones’ more than anything else, and that is actually having financial goals. Because Alex, let’s say your goal is to graduate IU and you know, have $1,1000 in the bank, whatever.
ALEX: I’m gonna be wearing Tom Ford next year.
PETE: Tom Ford. We’re wearing Ron Ford. You know like his third cousin.
ALEX: Like skinny Rob Lowe.
PHIL: Yeah exactly.
PETE: So I think, let’s say your goal is to graduate with $1,000 in your checking account or something like that. And by folding to peer pressure, buckling time after time, going out to the bars, going and grabbing something to eat, going on spring break, if that dwindles you down to $200 bucks, that accountability to try to keep it at $1,000 and monitoring it, that’s what’s gonna do it. I mean, because then you know, there’s actual metrics to know how good you are at avoiding the peer pressure.
ALEX: Right. It’s all about purposeful, actionable goals because what gets measured gets done. So especially, set a specific number or a specific goal. And then have a purpose for that goal. So I want this thousand dollars, for this specific purpose later when I graduate and that will keep you accountable.
PETE: Phil you’ve been around the block.
PETE: So sorry. At what point, do you feel more financial peer pressure now than you did in college? Cuz I’m, shocked by Alex’s statement but, to be fair, at 22, you probably are feeling more financial peer pressure than you’ve ever felt before.
PETE: But I would say in my mid 30s, I feel more financial peer pressure than ever before. Phil, you’re somewhere in between, what do you think?
PHIL: It’s somewhat different or the type of pressure I feel now is different. Just because when I was in college, it was all about keeping friends and not spending money meant that I wasn’t going to be hanging out with other people because that’s what most of the people did. And so there was pressure to always spend money on that. Now that I’m married, have a kid, my priority in life is to keep people happy as much as possible. And so the idea of spending money in order to keep people happy is what I focus on now, so it’s a different type of pressure, but it’s still there.
PETE: Think if you’ve got good friends, post graduation, that from a financial perspective, their jobs, their family, their a trust fund baby, I don’t know. Their just in a different financial position than you, but when you want to do entertaining things with them, and hang out with them, if it is suggested, hey let’s go to this restaurant and by the way Alex, this restaurant is gonna cost you 250 bucks by the time you leave at night. I mean, that’s were it gets kinda wicked because the financial desparities between people post graduation are much more than a guy that’s got an extra 100 bucks for just a little bit better beer. You know what I mean?
ALEX: Yeah, the peer pressure takes different forms but from this discussion it’s like it’s always there, it changes forms, so when-
ALEX: You’re in college, it’s gonna be you know you’re over 21 years old and you’re at the bar and your buddy who’s a trust fund baby-
ALEX: Wants to get a $5 Vegas bomb and you wanna get a dollar wells. You know what I mean like it’s little things like that too. They wanna get a more expensive burrito. They want queso on their burrito. You don’t get queso on your burrito too when you’re older, you know, it’s large expensive restaurants versus nonexpensive ones. It’s cars, it’s just bigger differences in the price.
PETE: Phil, do you get queso on your burrito?
PHIL: No, I do not. I’m gonna be honest with you, I actually don’t really like cheese.
ALEX: My god.
PETE: This just took a wicked turn, didn’t it?
ALEX: Yeah, this is awkward.
PETE: This got real weird. Do we talk to him?
ALEX: I don’t know.
PETE: What do we do.
ALEX: You can turn off his mic if you want.
PETE: So I guess let’s do this, as we examine peer pressure. As you’re listening I want you to just take a second and think how are my decisions, my spending decisions, influenced by others. It’s as simple as, hey, we’re going out to the bars. Do you wanna go? Or we’re gonna go grab a bite to eat. Do you wanna go? When the alternatives to that cost you much less and I would also offer this to you, and I think I’ve told this story before on the air. I remember as a sophomore in college, one of my good friends who had graduated the year before, he was a senior when I was a freshman, drove back to campus, had a brand new Acura. And I remember vividly seen and drive up and thinking, that’s exactly what I’m gonna do. I’m going to do the exact same thing upon graduation. And that was peer pressure the idea that you are influenced by others success or perceived success maybe the better way to go and to realize that that exists and keep in check I guess that’s, what’s your advice for today? Phil you have anything else to add to that?
PHIL: No just keep in mind that you’ve got to do what’s best for yourself. As you were saying there just because a guys coming down the street in a nice Acura, you don’t know his financial situation behind it and it could just mean that he borrowed a ton of money in order to pay for it. You know, he might not be doing too well.
PETE: The end of that story by the way is his car got repoed. Really did. Alright, so here’s what we learned today, Phil Shoeman, director of Financial literacy doesn’t like cheese, Alex is feeling some peer pressure now but buddy-
ALEX: It’s always there. [LAUGH]
PETE: It’s always there. It doesn’t get better. Any other take aways for you today Al?
ALEX: Specific, purpose driven, measurable goals will help you stay on your line on a daily basis.
PHIL: At least he gets it.
PETE: Right. You don’t like cheese?
PHIL: It’s a strange thing. I’ll eat it on pizza.
PHIL: But by itself when it’s the the majority of something, it’s just always been that way.
PETE: I don’t even know where to go.
PHIL: It was a five year old thing when I ordered one at MacDonald’s down in Bloomington. I ordered a cheeseburger instead of a hamburger and ever since then I’ve hated cheese.
PETE: Well we have got to end there.
PETE: There’s nowhere to go.
ALEX: That’s it.
PETE: So if you want more information on good living, which includes queso-
ALEX: Or on cheeseburgers.
PETE: Yeah, go to moneysmarts.iu.edu. This has been How Not to Move Back in With Your Parents here on the IU MoneySmarts Radio Network.