On and off over the years I’ve had gym buddies I could rely upon to keep me showing up for workouts even when my inner couch potato was itching for another hour of Netflix.
Yet it never occurred to me that the same buddy system could be applied to my financial challenges.
Not until a recent playdate at McDonald’s, that is, when I confessed to a good friend — who’s far more financially savvy than I — what serious debt I’ve accumulated recently. Within 30 minutes, as our kids screeched with glee on the jungle gym, she had mapped out a detailed action plan for my financial recovery. And we agreed to check-in on my progress at regular intervals moving forward. Insert fist-bump here, because yes, that’s really how we wrapped up our little financial chit-chat over French fries and Happy Meals.
As a single mom who doesn’t have a partner to discuss finances with (or to rein me in during my most impulsive moments, which I sheepishly admit are all too frequent), this was just the lifeline I needed. I had officially found a financial buddy.
The thing is, most Americans are too embarrassed to talk about money. A recent survey by LendingClub found that Americans are nearly twice as likely to talk with others about marital or relationship issues than credit card debt.
“In today’s connected world, people talk publicly about a variety of topics that used to be private – from sexual orientation to political affiliation – but money remains the last taboo,” said Steve Allocca, president of LendingClub. “This silence compounds the issues and poor financial health negatively impacts other key areas in people’s lives, causing many to feel shame or isolation. We need to remove the stigma and start engaging in conversations more openly on financial health.”
As a society we need to shed ourselves of this hang-up about money once and for all. There’s good reason to do so: A 2014 study by Dominican University of California backs up the value of the buddy system with science.
As part of the study, psychology professor Gail Matthews discovered that participants who sent weekly updates to a friend about their goals were far more likely to achieve what they set out to do. In fact, the group of study participants who were asked to formulate action commitments and send their goals, action commitments, and weekly progress reports to a supportive friend achieved significantly more than other study participants who did not engage in such behavior.
More than 70 percent reported completely accomplishing their goals or being more than halfway there compared to 35 percent of those who kept goals to themselves and didn’t even write them down.
The moral of the story? If your finances are not what they should be, it may be time to find a financial buddy of your own. With that in mind, here are some tips from financial professionals about how to get your financial buddy system going, and who makes a good money buddy.
In her book “Wealthy by Choice: Choosing Your Way to a Wealthier Future,” certified financial planner Ilene Davis dedicates a chapter to the concept of establishing a financial buddy system — or rather, creating an entire posse of financial cheerleaders.
Titled “Millionaire in the Making Support Group,” the chapter provides an ideal road map for those in search of the tools to establish and maintain a financial support system.
“Start talking to friends about your goals,” advises Davis. “You turn to someone and say, ‘Are you doing anything about retirement?’ If they say no, say, ‘Is it something you have thought about, because I’m looking for someone to help me stick to my game plan and doing it alone is really tough. I’m looking for people who might have similar goals and we help each other make wealthier choices.’”
If you’re feeling really bold or adventurous, you might even consider creating a Millionaire in the Making Meetup group or Facebook group.
The key is to surround yourself with people who have similar goals, said Davis, adding that when you hang around with individuals who are constantly buying the latest gadgets or a new car all the time, then it’s likely you’ll follow a similar behavior pattern.
But creating a support group of like-minded people or identifying a single buddy can help you stay on track in multiple ways. “If you’re tempted to buy something you don’t need, you’ll have someone to call who can help you understand why it’s not a good idea,” continued Davis.
What’s more, you can organize frugal approaches to entertainment and outings with these same individuals, further helping you to reach your goals.
“You can plan events that allow you to have fun together, but not necessarily spend money,” said Davis. “For example, instead of going out to the movies, and probably spending $10 to $20 each, get a group together, rent a movie, and put a couple dollars in for pizza or subs, to share.”
The Nuts and Bolts
Some studies have shown that the best exercise partner is someone who’s about 40 percent more fit than you are, because he or she will actually motivate you to work out longer and harder.
“That principle can be directly applied to your budget and financial health,” says Sara Skirboll, of the coupon and savings site RetailMeNot. “Look for a budget buddy who has a strong budget in place and a history of smart financial choices – this will help inspire you on your budget journey.”
Once you’ve identified that person, establish your financial goals and then sit down together to map out a plan for one month, three months and six-months-worth of benchmarks to get you to those goals.
“You should align these times with check-ins with your budget buddy – the accountability of having your buddy will motivate you to actually accomplish your smaller goals as you aim to reach your big goal,” said Skirboll.
It Can Really Work
Sha’Kreshia Terrell is living proof that the buddy system pays off.
She and her accountability partner have gotten rid of a staggering $70,000 worth of debt since joining forces in 2016 to help each other achieve financial goals.
An accounting clerk and founder and CEO of Humble Hustle Finance, 27-year-old Terrell had accumulated about $45,000 of that debt on credit cards and car loans, while her friend had accrued about $25,000.
At the beginning of each month, Terrell and her partner write down a list of clear goals they want to achieve before month’s end and send them to one another.
“We do this because it’s easy to get distracted in life and when motivation is lost throughout the journey, the other partner is there to help get oneself back on track,” she explained.
When they need still more inspiration to remain focused, Terrell and her friend get up on a Saturday morning and hit some open houses, daydreaming about owning a home themselves someday, and then head home to write down their plans to make those dreams a reality.
The duo has also learned to recognize each other’s spending triggers over the years.
“If I see a deal that I know she will fall for, I quickly pull out my phone and send her a text to remind her of her goals and to motivate her to move past the deal, vice versa,” said Terrell. “We talk daily. Our conversations have gone from talking about going out to eat or shopping to talking about goals and what we want out of life.”
All of the effort has paid off. Of that original $45,000 in debt, Terrell now owes a mere $3,500. The finish line is finally within striking distance and Terrell says she wouldn’t have made it nearly as far, as fast, without her buddy.
“It probably would have taken me a lot longer without her because it’s hard to motivate myself. We’re kind of there to motivate each other and remind each other,’” she explained. “I wish more people would be comfortable talking about their financial situation, rather than being embarrassed. You have to find that trustworthy friend or partner who can motivate you when times get hard.”
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