“Everyone Does It” Isn’t a Financial Plan

“Just because everyone’s doing it doesn’t make it OK” sounds like the kind of obvious Mom wisdom that would earn anyone an eye roll for dishing it out, you know?

Because yeah, obviously we’re all clear that we wouldn’t jump off a cliff if all our friends were doing it too… but that doesn’t mean that all of us have really grasped that it applies to our grown-up life choices, too.

Like, how many times have you been *so committed* to your new healthy eating plan, sat down for dinner with your friends and promptly ordered a beer or a burger when the waiter got to you – because everyone else was getting one, and it sounded so good(I cannot be the only person who does this, help me out here.)

While one beer or one burger (…or both, if I’m being honest) isn’t the end of the world, even if you did juuuuust start a new workout plan, the same thing happens all too often with finances – and the results can be way bigger, not to mention way more serious.

It consistently baffles me how often some variation of “well, everyone does it” is the basis of financial choices, and let’s be clear: those choices are things like thousands of dollars, not just thousands of calories.

Way bigger deal.

So let’s get really clear on some all-too-common “everyone is doing it” situations, and what you might want to do instead.

Come sit with us finance nerds, we’re all doing the uncool options anyways.

How to Make Better Financial Choices

Just because none of your friends can even tell you what an RRSP is, doesn’t mean you don’t need to save for retirement.

Not that you need an RRSP, because a TFSA might be the better choice (or you might be American, and having this same conversation about 401Ks and IRAs). But no matter your age, no matter your income level, you need to be saving for retirement. Even if you think you can’t swing it, 1% of your salary is a good place to start–and you have to start.

Burying your head in the sand may be a popular option on the whole Retirement Thing, but it’s a bad one.

Just because all of your friends are buying houses, doesn’t mean you need to buy a house.

Buying a house isn’t for everyone, and honestly, you need to understand that it’s a giant lifestyle decision. Not convinced? Let’s put it this way: I’ve done more yardwork in the past three weeks than I have in my entire life, and if home ownership wasn’t something I wanted more than almost anything, I would be so out of here.

Yardwork sucks. You don’t have to buy a house if you don’t want to, even if it seems like everyone is on the owning-is-amazing bandwagon. (I think it is, but the h*cking yardwork you guys.)

Just because all of your friends are putting that trip to Cuba on credit cards, doesn’t mean you need to go into debt to take a vacation.

Ok, fine, this is a bit of a killjoy example, but let’s be really clear here–vacations are a discretionary purchase.

Yes, experiences are important. Yes, you might make lifetime memories.

No, that doesn’t justify charging $2,000 to your credit card any more than it does charging $2,000 to your credit card for any other discretionary purchase, like a shopping spree. If vacations are that important to you, save your money and take one next year. (Consider the 20% interest you’re not paying on your credit card a sweet bonus.)

Just because all of your friends think investing is something best left to old white dudes on Wall Street, doesn’t mean you aren’t ready to start investing right now.

You have so many tools and resources at your disposal to start investing from the comfort of your own home, including this free email course that walks you through the basics. Investing can feel intimidating, sure, but it’s also well within your ability to do well, and you don’t have to check out every investing book in the library to get there–or sit across a desk from someone who’s trying to sell you products you don’t need with ultra-high fees.

You are ready to start investing, and the time is literally now.

Just because all of your friends are financing luxury cars, doesn’t mean you should buy more car than you can afford.

I don’t know your life, so I don’t know how much car that is, but some good general rules include…

  • You should aim to spend no more than 20% of your annual salary on a car (so if you make $100,000, your car budget is $20,000. No, not annually – purchase price, yo.)
  • On a monthly level, your transportation costs should be no more than 15% of your budget.

Now, are those flexible? Of course they are.

If you looooove cars, your budget is going to be different than mine, where all I care about is that “it goes.” But there’s a limit, and it’s somewhere in the realm of spending more than half of what you make in a year on a car. And yeah, we all know people who have done that – like, a lot of them – but it doesn’t mean you should.

Just because all of your friends think budgeting is a drag, doesn’t mean you shouldn’t make a plan for your monthly money.

Sure, not a lot of people pay close attention to their monthly money situation, but making a plan for how you want to spend and save your money is so powerful–and bonus points if you track your spending to see if you’re sticking to the plan. It puts you in charge of your money, instead of the other way around, and that’s a good thing.

Even if it’s not a super common thing.

Just because none of your friends prioritize saving, doesn’t mean you shouldn’t pay yourself first.

Want to take that vacation? Or pay for a wedding? Buy a house? Or get a dog? Or any long term goal ever? You need some savings, pal, and the best way to get them is to have them taken out of your account as soon as you get paid. That’s right: everything us finance nerds say about automating your savings, and setting savings goals, is kinda true. You should do it, even if the “cool” option is spending the cash as soon as it hits your account.

As long as you’re saving it towards something you want more than another round at happy hour, you’ll be glad you did. Source: the dog snuggled up on the couch I saved up for in the office I furnished from my handy house-purchases savings account.

Just because all of your friends financed brand-new furniture for their apartment, doesn’t mean you should buy a new couch on your credit card.

Listen, interest rates aren’t going down any more. In fact, they went up, which means the cost of borrowing isn’t going to be a bargain-basement fire-sale deal on money like it has been for the past few years. If you can hack it with a hand-me-down while you save up the money for your furniture wants?

Do that, because a leather couch is a want. Sorry. (See above, re: vacations and discretionary purchases, if you need more of an elaboration on this one.)

Just because all of your friends save 80% of their income, doesn’t mean you need to never buy a latte.

Sure, most of these examples are about less-than-perfect choices, but the opposite applies just as much here too. If all of your friends are super-uber-amazing with money, or they have situations that allow them to do extraordinary things with their money, it doesn’t necessarily mean you have to do the same–or even can do the same.

If you’re doing your best, and balancing your financial goals with having a life at the same time? You’re doing just fine.

Just because everyone is spending all of their money on X, doesn’t mean you wouldn’t be happier spending your money on Y.

At the end of the day, your patterns – eating, finance, whatever – should be based on one person, and one person only. (It’s you, duh.)

Sure, that involves Doing The Work to figure out what matters to you, but it’s so worth it. You might be way happier spending your money on dog food and comfy sweatpants than on music festivals and trendy restaurants (it me) and that’s fine.

Once you know what your own personal “weird spending” is, you’ll be able to make choices that align with the things you really want – and that’s a great thing.

By making the right financial choices for yourself now, in most cases, it means not having to worry about it later.

It means not having to worry about how you’re going to afford to retire. Not having to worry about how you’ll keep up with debt payments if you lose your job. It means not having to worry about debt payments, period. Not having that low level of consistent panic that happens when you’re $20 away from living paycheque to paycheque.

And speaking from experience, that’s worth a h*ck of a lot more than a new couch, or a one-week vacation.

Yes, even if everyone else has the new couch on credit and the vacation on their Mastercard.

Desirae Odjick, the creator of Half Banked, is all about helping millennials do money differently – without feeling guilty, or stressed, or having to give up lattes. (She loves lattes and is probably drinking one right now.) It turns out, your version of “amazing at money” and hers don’t have to look the same – and she’s into helping people figure out what actually works for them. For example, you likely won’t spend as much money on dogs as she does.

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