Lending Club Blog

The Basis for Your Financial Habits

In my recent post about financial advice from friends and family, I discussed how those around you are the most likely sources of your financial advice. These people are also the ones who will influence your spending and savings habits.

This happens because your friends are usually your basis for defining what is “normal.” Seeing the majority of your friends act a certain way will probably lead you to believe that the majority of all people act in that way. While large groups tend to be indicative of smaller groups of average people, the reverse is seldom true.

This idea is especially true when we consider our most influential financial role models: our parents. I have a friend who assumes that everyone is a hyper-spender mired in credit card debt because that’s the way her parents live. She can’t understand why we don’t spend more money, despite repeatedly being told that we have everything we need without overspending. Not surprisingly, my friend is not in a very good financial position. Luckily for me, it’s just my one friend who lives this way, so her influence on me is balanced by that of other, more fiscally responsible, friends.

Your friends also form the basis of your support group. If they don’t understand the importance of setting a budget, for instance, then they likely won’t be supportive when you cite your budget as the reason for not spending. If they see more value in appearing affluent than becoming affluent, then they won’t understand your rationale. Similarly, if your friends are spending every penny they make (or more), then financially responsible investments like social lending on Lending Club are going to be way outside their line of thinking.

These types of discrepancies in thinking will likely either weaken the friendship or force one of you to change. Since applying financial discipline is more difficult than the alternative, it will likely be you that will change if you’re not vigilant about maintaining this discipline. This is especially true if it’s a “you against many friends” scenario.

By not changing to your friend’s financially irresponsible ways, you’re left with the alternative of the friendship weakening. While even good friends can surely disagree, allowing yourself to adopt a friend’s poor financial habits may not be worth the value of the friendship.

Thursday, December 27th, 2007 at 7:33 am

Comments (0)

  • Archives z

Recent Posts

Welcome Vermont Investors!

Today, we’re thrilled to welcome residents of the state… Read More »
September 4, 2014

We filed to go public today

We filed a registration statement with the SEC today… Read More »
August 27, 2014

Our Billion Dollar Quarter

We’re excited to announce  that we’ve facilitated over $5… Read More »
July 8, 2014

Is Lending Club Available in My State?

Is Lending Club available in my state? That is… Read More »
July 7, 2014

5 Things Everyone Should Do Before a First Interview

After spending hours drafting your… Read More »
June 24, 2014

Lending Club Joins Senator Cory Booker to Discuss Improving Access to Capital for Small Businesses

Read More »
June 20, 2014

Lending Club Named a CNBC Top 50 Disruptor for a Second Year

For the second year in… Read More »
June 17, 2014

PRIME is now Automated Investing

Lending Club is excited to announce that PRIME has… Read More »
May 14, 2014

Why Dana joined Lending Club, or, four things you should look for when you make your next move

Read More »
May 14, 2014

LendIt 2014

LendIt 2014 opened with a bang on Sunday night… Read More »
May 5, 2014