Financial Literacy Month: Dealing with the Pressure to ‘Keep Up’

In 2013, the United States Senate designated April as national Financial Literacy Month.  The goal: To highlight the importance of financial education and to teach Americans how to maintain healthy money habits.  As various activities take place all over the country to help people get money smart, there is widespread concern that there is a ‘financial illiteracy’ crisis in the United States and there has been a failure at home, among educators, and in the media to provide basic financial education, particularly to our young people.

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Black Enterprise will be doing a series of stories this month that help you look at the real drivers of your financial choices.  We will offer financial and lifestyle solutions that will help you improve your relationship with money.

When people have financial issues they tend to go straight to the numbers:  They want to earn more, spend more, or save more.  The real causes of our financial experience have little to do with numbers.  It’s much more the result of factors like gender, race, pressures to ‘keep up’ and role modeling.

Let’s begin this month’s journey by looking at the ways in which the pressure’s to ‘keep up’ play out in our finances.

Human Nature

In 1954, social psychologist, Leon Festinger introduced his ‘Social Comparison Theory.’  It says human beings actually have a drive to judge themselves and their abilities based on what they see in other people. We do this in order to learn how to define ourselves. This is not something that happens consciously.

Case in point, I once met a single mother of four who made about $20,000 a year at a charity event.  She was receiving a $1,000 cash gift to help support her children. When asked what she would do with the money, she said she was going to buy her children an X-box.  You could feel the judgmental energy coming out of the people around us. In reality, everywhere this woman looked; television, online, the kids around her, she was bombarded with messages that “normal kids have X-boxes.”  This was simply a case of a Mother wanting her children to be normal. This comes from a place of instinct, not intellect. In fact, many of the people around her struggled with mortgage payments or payments for private schools for their children that they could not afford. We do what we are conditioned to believe is normal.

Standing Up to Keeping Up

In addition to the financial burden our instinct to fit in with those around us can cause, it makes us loose sight of our priorities and who we really are.

Here are some tips that can help you to stand-up to this deep conditioning:

1. Can I afford this?

2. Is it in line with my goals?

3. If not, why am I doing it? Take a pause and see what comes up.

4. Get tuned into your goals and priorities. Take a look at the recent story we did on how to begin to identify your life goals to gain clarity in this area.

5. Write down the following three questions and put them in your wallet, hang them on your wall, keep them in your head, etc. They can give you that moment of pause you need in order to make a better decision:

6. It also helps to figure out how much money you make a day. Having that number in your head will often give you the moment of pause you need to rethink a purchase.

7. Share your goals with a friend or trusted loved one and ask them to help you stay on course. Make a plan to have a heart to heart at least once a month and make it fun.