This is the second in a series of articles by CommunityAmerica Credit Union. The series will tackle personal debt by planting the seeds of savings and making smart downsizing choices. For some, this may be a way to get started on a positive foot. For others, it’s a chance to start over after years of overspending. Regardless of your reason, we’ll help you navigate how to downsize realistically.
One big hurdle of money management is learning to say “no” to social activities that aren’t in your budget. Will your friends or loved ones think you don’t prioritize them? Are you embarrassed to admit you’re working to improve your finances? Below are tips to empower yourself to make the best choices for your financial life while maintaining your valued relationships.
Social Media and Endless Events
The prevalence of social media means contacts from all walks of life have access to invite you to events. Blended families are also common, so don’t be surprised if you are asked to attend your step-cousin’s baby shower. Be mindful of how often you accept, or your calendar will be booked solid with parties of all kinds. Fantastic for your social life. Dangerous for your budget.
Remember that seemingly “cheap” gatherings add up. Even the simplest of potlucks involve food and beverage contributions from guests. It’s easy to end the month with a stacked credit card full of Target trips, restaurant tabs and snack runs. If this applies to you, it’s time to take a harder look at your social calendar.
The Emotion behind Relationships
Family and friendships require work, but they also add so much value to our lives. From the moments of searching for a seat in the lunchroom, we are engrained to spend our time with others. Choosing which relationships deserve your free time can lead to hurt feelings. In comes the birth of ‘purchase judging’. This is a very real perception challenge where others may feel bitter about where you spend your time and money.
For example, if you didn’t attend their party but bought yourself a designer purse. Ouch. But perhaps you’ve saved for months, and it just happens you were able to buy the purse at that moment. The reality is, most families can’t afford to celebrate every friend’s birthday, special moment or small business venture. Work to establish boundaries that set your ground rules.
Read More: How to Talk to Your Spouse About Money
Setting Social Boundaries
Take an honest look at your overall social budget for the month to determine how many events you can attend. Don’t underestimate the complete cost. Think of tax, tips, and all the little things that add up. If you find it beneficial, take this a step further and establish categories. For example, limiting your commitments to one birthday, one dinner, etc. per month. Don’t commit too early! Not everyone schedules in advance, so reserve some funds for a little spontaneity.
A key piece of advice- decline things that are more hinged on whimsical entertainment and less on milestones. Don’t skip your best friend’s engagement party to attend a St. Patrick’s Day bar hopping group, even if you’d rather go to the latter.
Once you hit your financial limit, it’s time to start declining.
The Art of the Respectful Decline
Rule number one to declining, assuming it’s related to budget, is let people know you’re on a budget. Talking about personal financial limitations doesn’t have to be embarrassing. If your Midwest manners kick in and you’re inclined to provide an explanation, here are a few suggestions:
- I’m taking a break on activities for the moment to save for a goal
- I’ve already committed my social budget for the month
The main point is, don’t make the host feel like they are obligating or inconveniencing you. Be sure to express your gratitude for the invitation and let them know you’d like to spend time together soon. Follow up next month before your calendar is full so they know you didn’t forget about them.
It’s true that your financials are your own business. But when it comes to your valued relationships, being cost-conscious doesn’t have to be dismissive. Budgeting is smart practice, regardless of your income level. You may find that you inspire your friends to be more open about setting their own social budgets. When spending is trending, be a trend-setter and protect your wallet.
Up next: If you are in a financial bind, it may be time to take a closer look at your assets. Are you aware of all your assets and which are most important? We’ll provide a breakdown.
The blog and its opinions are expressly that of its author and does not convey the opinions or strategies of the Credit Union and should not be considered financial advice.