How Friendships Can Impact Your Financial Behavior

Do your friends bust your budget? Shannon McNay has tips on bypassing the impulse to buy (while still maintaining your social life).

It all started with a Chanel bag.


I was sitting in my apartment, complimenting a friend on her new designer bag. I’d seen this bag carried by plenty of people before, but the price was too high for me to ever consider buying it. So I asked her if I could look at it. I wanted to know, how does a bag that costs hundreds of dollars compare?


Honestly, I couldn’t tell much difference. But then we started discussing brands and landed on Chanel. That’s when she showed me a picture online of the Chanel bag she owns.




Here’s the thing: I’m a bag girl. While I won’t budge a dollar on my food budget and I almost never shop for new clothes, a new bag could have me whipping out my wallet faster than you can say, “but there’s no money to put into it now.”


But as much as I love bags, I never buy designer bags. They’re simply too far out of reach for my budget and making room for them would mean only getting a new bag every few years. I crave variety more than I crave designer brands.


But there’s one designer brand I’ve always loved: classic, timeless, versatile Chanel. A Chanel bag looks great with a dress or even my typical wardrobe of jeans and a T-shirt. However, I’ve never once considered the idea of owning a Chanel bag. They’re simply too expensive for that to be a reality in my world.


That’s why hearing about my friend’s Chanel bag had such an impact on me. She wasn’t just showing me a picture of the bag she wants; she was showing me a picture of the bag she owns. But how does she afford it? We both have student loans—we both earn approximately the same salary. So how did this bag come into her world?


After my friend left, something happened. I didn’t realize it so clearly at the time, but the conversation placed this deep-seated feeling inside of me: I want.


Later, I casually suggested to my husband: “Want to go shopping tomorrow?”


Confused by this unusual question from me, he said, “Not really. Is there something you need?”


“Well, not really need. But I’d love to get a new bag. It’s been awhile….”


And thus we launched into a conversation about the merits of me buying a new bag. Usually a conversation like this ends quickly. You want it and it’s in the budget, sure! It’s not in the budget, no. But his Spidey senses were up. He knows I never ask him to go shopping. If I want or need something and it works with the budget, I take care of it. This was different.


What was happening to me was the most obscure way our friendships can impact our financial behavior.


The Impact


The thing about the conversation between my friend and I: There was no pressure. She wasn’t saying, “You should get one!” or even implying, “You need this if you want to hang with me.” She was simply showing me something she owned that she thought I would like—something we do with our friends every single day.


So, what’s the problem? The thing that she owns is something I’ve always considered to be for other people. But when a friend of relatively the same financial status claimed to have it, suddenly the idea of it became normal instead of feeling like something that should never happen for me.


The Danger of Normal


You’ve probably heard of “lifestyle inflation” before. It’s something that happens gradually. Maybe you have roommates for a few years, but then get your own place. Once you do, you say you’ll never do the roommate thing again. Or maybe you’ve always driven beater cars or had a flip phone, but then you get a new car or an iPhone. Suddenly those upgrades seem to be the only viable options.


Once you upgrade something in your life, the thing from before shifts into the “unacceptable” category. No longer good enough, even if it worked for you before.


Some of this is natural (you have multiple kids, you might need a bigger car). But it gets a bit hairy when your lifestyle inflation doesn’t occur for natural reasons, but instead because of the inflation of those around you (e.g., smart phones used to be elite, now they’re mainstream—therefore they slowly became a “have to have” in our collective conscience).


Why is this a problem? Because you’re not upgrading your lifestyle out of necessity, you’re upgrading because of the “normal” you’re surrounded with. And that can lead to a lot of cloudy decisions and spending above your means…all the while thinking, “but this is just the way everyone does it.”


No, it’s just the way everyone you know does it.


It takes a lot of effort to cling to your “normal” and not the “normal” of those around you. After the Chanel situation, I was lucky enough to have my husband bring me down to earth. Even though I wasn’t trying to buy a designer bag, he questioned why I suddenly wanted a new bag at all. That question helped me think more clearly and evaluate what I actually wanted.


I still haven’t bought a new bag since—I am pretty satisfied with what I have.


Creating Your Own Normal


Before it sounds like I’m suggesting that you pass judgment on your friends or dump them altogether, consider this: It doesn’t matter who you hang out with as long as you maintain your individual sense of normal.


This is not always easy to do. You may not notice how the clothes your friends wear or cars they drive impact the way you view your own clothes or car. You will have to consciously try to notice. Once you notice, you will gain the perspective you need to then consider the trade-offs.


We all have to make trade-offs to have what we have. For example, my friend with the Chanel bag lives far outside of the city and drinks free coffee at work. I, however, live in Manhattan and typically work out of coffee shops. If my friend were to see my rent bill or mocha budget, she might balk in the same way I would at seeing the price tag on her Chanel bag.


She can do it because of her trade-offs, just like I do with mine. She’s not judging me and I’m not judging her. We celebrate each other’s differences and move on because, at the end of the day, we have different “normals.” And there’s nothing wrong with that!


Shannon McNay is personal finance writer
who loves to talk about the emotional side
of personal finance. Her work has been
published in Business Insider, DailyWorth,
Huffington Post, Lifehacker, ReadyForZero,
Yahoo! Finance, and more. You can follow her on

This story was first published on the Society of Grownups blog.