Financial Cultures: avoiding the social pressure to overspend
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Come back down to earth now with some practical advice. Certified financial planner, Leah McMahan, live from Limerick. Welcome. Good morning, or good afternoon even. Good afternoon, Leah. We're going to talk a little bit about something called the financial culture in a social group or family and maybe how the financial norms in your social group could be out of step with your own circumstances and, you know, situations can arise where people expect you to spend more money than you're comfortable with. What do we mean when we say the financial culture in a group?
So essentially, like a financial culture kind of simply is the relationship that you have with money. So it's kind of your attitude, like your habits, your behaviour, and that kind of altogether shapes how you, you know, save money, how you talk about money.
What is financial culture and why does it matter?
You know, sometimes it's how you earn money, you know, whether you work really, really hard, it's kind of that work harder, not smarter kind of thing, or vice versa. And then how we spend money. So when it comes to, I suppose, typically what shapes a financial culture, you know, it can be your family, you know, your upbringing, essentially how money was spoken about in the house, experiences that you had with money, you know, whether you, you know, saved it all, whether you were spending it. And generally the environment then that you've been in, whether it's in like that social groups or typically kind of out in the world.
OK, yeah. We don't talk about money really, do we?
No. Now, I do see there is a better move towards people being more comfortable because I noticed for a long time as well, you know, I suppose in my role that people were particularly uncomfortable talking about money. You know, I've been in situations with clients where, you know, when I first meet them and you would think, you know, the starting point is to say, you know, how much are you earning? And people are uncomfortable telling me that.
Yeah.
And that makes it really hard to do my job because if I don't know what's coming in, I don't know how to organise it. But typically, I suppose there's definitely a move, you know, there's a lot more on social media now encouraging people to talk about money. Like I would do it a lot on, I suppose, kind of Instagram and Facebook, just trying to, you know, make people more comfortable. Because at the end of the day, like money holds so much kind of power in the sense of, you know, if you don't have it, you feel like you're missing out. Whereas really, you just need to know what's enough for you, for your lifestyle.
Okay. OK, now you can know what's enough for your lifestyle, but if we take, let's take some real life situations, right? So, for example, there's big life events, stags, hen party, weddings, right? And like they can basically be the price of a holiday. And there's some people in a group situation are going to think, I'd prefer to spend this money differently on an actual holiday. There's some people in the group who don't have the money for these kind of things. What's your advice there?
Yeah, and I've seen that even, you know, I suppose, you know, in my own personal life, you know, I have gone abroad for a wedding. I have gone abroad for hen parties. My other half has done stags as well. And I think, like, you know, for someone that's not within their means, because I know sometimes it's kind of, you know, if there's a wedding abroad, it might be said, but sure, you can make a holiday out of that. You know, and people might kind of say, well, I wasn't planning, you know, this year I wasn't planning on going on a holiday because, you know, we were changing the car next year. And I think, you know, nobody expects someone else to be putting themselves under financial pressure. But I think it's the honesty around it and kind of saying, look, I can't make this work.
But how about we do something else? You know, kind of don't go to them with a problem, go to them with a solution. So if you can't go to the, you know, the hen abroad or the stag abroad, it's look, I can't make that work right now.
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