These are the people who will destroy you financially. Avoid them at all costs.
As motivational speaker Jim Rohn once said, “You are the average of the five people you spend the most time with”.
Despite how strong-headed you think you may be, you may have subconsciously picked up the lifestyle and spending habits of your closest friends, including the way you speak and even your goals in life.
When you’re surrounded by frugal people, you are more likely to follow in their footsteps. On the other hand, imagine how much of a negative influence spendthrifts can have on you. If you have friends who are constantly having afternoon teas and buying luxury goods, then there’s a good chance that some of their habits will rub off on you.
Just like saving, maintaining healthy friendships is not easy. It takes a tonne of dedication and work to make sure you are bonding with people you love in a way that won't set you back financially.
Below are seven types of friends who will destroy you financially without you realising it. And by the time you do, it’s too late.
The 'Forgetful' Borrower
Let’s face it — everyone knows a borrower.
It’s the friend who is always ‘financially struggling’, despite having a full-time job. Their modus operandi? Requesting for a few dollars and then conveniently forgetting to pay you back.
If you ask for that S$2 back, it might look bad on you. So you just leave it. But if they borrow S$2 every week and don’t return it, it actually comes up to over S$100 a year!
These people are, to put it very bluntly, cheap. They probably think that they’re ‘saving money’ because other people are paying for them.
How to deal with the 'Forgetful' Borrower
Do it back to them. Borrow a few dollars and don’t pay them back. If they insist that you return the money, remind them about all the times they’ve borrowed from you and forgot to return. They will either 1. let it slide or 2. return you the money they’ve previously owed you. Rinse and repeat until you’ve recovered all your money.
When you lend people money, automatically assume it’s bad debt. Only let someone borrow the amount that you’re prepared not to get back. To avoid all these troubles, it’s best to just not lend anyone money in the first place.
You: OMG, this bag is super pretty! It costs S$2,000 though…
Friend: YOLO! Just get it. Money is meant to be spent! You can always earn it back next time! Besides, you've worked so hard. You deserve it!
Sounds familiar? This friend, the Enabler, is always egging you on to buy stuff you don’t need. It seems like their goal in life is to get their friends to spend more, because retail therapy makes them happy. Of course, they might not have a malicious motive — many of them think that spending money = happiness, and they truly want you to enjoy life.
But beware: shopping with the Enabler encourages impulse buying. Being around such people can be damaging to your bank account, especially if you have something to save up for, such as your BTO and wedding.
How to deal with the Enabler
Avoid shopping with one. If the Enabler is someone you cannot avoid meeting up with, set a budget before you leave and strictly bring only cash. Once your wallet is dried up, there’s no way you can drop thousands of dollars on a bag. If the Enabler offers to help you swipe with their credit card, kindly decline. Why would you let them earn credit card points at your expense?
Meeting up with them is fine, but avoid places that trigger spending and the Enabler’s behaviour, such a high-end mall. Idea: Take a hike in one of the many nature spots in Singapore. They can’t ask you to buy the latest Chanel bag there.
The Miser is the ultimate cheapskate who hates spending money on anything or anyone. They are not willing to part with a couple of dollars for gifts or group outings, which takes out most of the fun and bonding in gatherings.
And if you’re not careful, having the Miser around may cost you, because you’ll have to constantly foot their share of the bill if they’re unwilling to pay.
How to deal with the Miser
If the Miser is a very good friend of yours that you plan to keep around, try planning budget-friendly activities. Keep in mind that the Miser is probably a miser today because of previous financial traumas — they may have grown up in a not-so-wealthy family and often have to think twice about buying something all the time. Be patient and encourage them to spend on things that are important and/or necessary. But of course, don’t go too far — you’ll become the Enabler if you do.
This is that friend who is always bragging about how rich they are, being able to afford the latest bags, cars and what have you.
After following them on Instagram long enough, you’ll subconsciously feel envious and want to own some luxury items of your own (been there, felt that). It’s a normal reaction when someone keeps flaunting their material goods to your face.
Not only are they bad for your financial health, their toxic personality is also detrimental to your mental health. So, to be honest, you should just unfriend them.
How to deal with the Show-Off
You’ve got to understand why they act this way — they want their followers to be envious of them and their lives, and the trick is to not pay any attention to them. Do not engage with them, don’t even give them a ‘like’ on Instagram and do not reply to any of their social media posts.
Do you know someone who’s recently gotten into meme stocks such as AMC and GameStop and earned a tonne of money? That’s not being smart, that’s gambling. Yes, they may post screenshots showing all their gains, but what they do not show you is their mental breakdown when their stocks fluctuate.
After seeing their gains, many people would be inclined to follow in their footsteps with the “get rich quick” mentality. But you know the saying: ‘Buy on rumour, sell on news’. By the time they’ve bought the stock, the hype has died down and they’re losing money. So don’t do it.
Besides stock-gambling, the Gambler often has a penchant for games involving money such as poker and mahjong. It’s okay when you play small amounts for fun during Chinese New Year, but things can go south really quickly when you consistently lose S$10 every round.
How to deal with the Gambler
Avoid going to them for advice on ‘investments’. They are people with the ‘go big or go home’ mentality and if you’re not experienced, you can easily lose a couple of hundreds to thousands of dollars on the stock market, no thanks to their ‘advice’. Do your own research and take calculated risks.
When playing games involving money, resist the urge to bet big. You'll be better off financially by playing S$0.20/S$0.40 during a casual round of mahjong with friends instead of S$5/S$1. Yes, there’s a chance you’ll win big, but that means you might also lose big.
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