It may be hard to notice at first, but your friends may be costing you a secure financial future. In order to avoid the potential negative influence of our friends, here are 5 trends you can identify that indicate your friends are costing you future financial success.

1) Poor Spending Habits:

There are many different spending personalities. Some people enjoy keeping up with the Joneses, while others look for every discount and coupon available. Surrounding yourself with friends who have poor spending habits can have an influence on your financial well-being.

If your friends enjoy living large or beyond their means, this could put you in troubled water. You may end up feeling pressure to maintain the same spending habits as your friends, causing you to go into debt. Keeping friends like these could put you in a situation where you are living paycheck to paycheck or even on the edge of bankruptcy without realizing it.

For example, your friends may be really into partying at clubs and running up large tabs every chance they get. If they do this a lot and you want to associate with them, you more or less have to do the same. Other friends may be into cars and judge others based on what kind of car they drive. They may purchase car after car without consideration of the money they are throwing away. Every large purchase should be a careful consideration and should always be something you budget for. Purchasing multiple cars without thought goes against the idea of maximizing utility and getting the most “bang for your buck”. There is nothing wrong with having a nice car, but there is if it goes against your financial priorities.

If you’re money conscious, you want to surround yourself with people who have similar spending habits, as well as those who support your monetary choices.
 

2) Minimal Financial Literacy:

The better understanding you have of financial literacy the better your chances are of achieving a secure financial future. Comprehending a large array of financial concepts will give you a financial advantage. If your friends don’t understand the basics of credit or the magic of compound interest, it may be challenging to hang out with them when you start talking about such things.

Ideally you can share ideas for budgeting and saving money with your friends, or at least avoid the subject of money if it makes them uncomfortable. Even if they’re not financial gurus, it would be nice if they have an interest in learning about how money works and bettering their financial well-being.
 

3) Don’t Prioritize Saving:

Do your friends contribute to their company-sponsored retirement plan? Do they have an emergency fund? Do they have savings goals? Do they even use banks? Most likely, how they spend is closely related to how they save. If your friends are pessimistic about investing and saving, they may not be the best people to seek advice or validation regarding your personal financial goals.

Many Americans choose to live in the present instead of saving for retirement. In fact, according to Northwestern Mutual, 1 in 3 Americans have less than $5,000 saved for retirement.

If you have big savings goals and want to have a secure financial future, it’s important your friends are on the same page. Surrounding yourself with friends who treat their money a certain way can end up rubbing off on you. Choosing friends who save will encourage your progress toward achieving your financial goal.
 

4) Lack of Career Aspirations:

If your friends have big career aspirations, most likely you do too. This might be one of the reasons you chose to be their friend. Career paths can also be a reason friendships drift apart. If your friends don’t have career goals, don't let them hold you down. If they are a true friend they should show it by supporting your goals and being happy for you. It takes a lot of hard work to succeed. Investing in yourself (be it education, extra hours, etc) naturally reduces the amount of time you have to spend with friends.

Forward progression in your career will help you increase your salary and benefits. By increasing your income, you will have a greater opportunity to set yourself up for future financial success. Don’t let your friends deprive you of the income and career you deserve.
 

5) Poor Investing Habits, Gambling vs Investing, and Boasting about Wins:

Your social circle can impact your commitment to investing. If your social circle has no concept of the importance of investing it is probably best to avoid the subject when spending time with them. If your friends choose to discuss how they invest their money, learn to detect if they are merely boasting about the gambles they took that paid off vs talking about a sound investment philosophy.

It is a mistake to turn to friends for reassurance and financial advice if they are in fact, clueless about it. When the market dips, it may cause even the most experienced investors to make the mistake of abandoning their plan. The only exception is if you have a friend who is truly a master at finances with many years of experience AND they are placing the same bets they recommend to you.

You want your friends to support you, but not judge you for your investment choices, or expect you to look at the market the same way all the time.
 

The bottom line:

At some point you may have to choose between attaining your financial goals, and putting up with the stress that comes with having friends who are in conflict with those goals...

Choosing to spend time with people who improve your financial well-being increases your chances of staying on budget, having a solid retirement, and enjoying life at the same time. All your friends do not need to be financial experts, but you should consider how their money habits are impacting your bottom line.

Setting a good example financially is something the “good ones” will admire you for.