Learning To Say No

Earlier this week, I appeared on HuffPost Live, an online television channel, to talk about saying “no” to spending. Social situations make it difficult for people to admit among friends that they can't afford whatever the social activity might be, such as dining out or going to a club. The discussion was couched in fashion. Working in the fashion industry, there seems to be quite a bit of social pressure to have the right clothes and accessories to fit in with colleagues. I don't know anything about the fashion industry, but I do know how important it is to look the part when your goal is to move forward in any social or business environment.

I participated in a panel hosted by Nancy Redd that included Christina Anderson, the Fashion and Style editor for Huffington Post, Dr. Nancy Berk, a psychologist and author, Nathan Morris, a financial planner, and Veronica Dagher, a reporter for the Wall Street Journal whose article “ It's Really OK to Say, 'I Can't Afford That'” inspired the topic for the show.

American consumers face pressure every day, whether from friends, the media, or societal expectations, to fit in. The human drive for the feeling of comfort in an environment or some kind of community drives us to make choices that move in that direction, even if those decisions can be harmful in the long run. It's not a case of ignorance. We knowingly do things that harm our health every day, but we continue. The same is true about financial harm.

In order to feel accepted in a group, we want to act like a group. The problem is we can't really see the true financial condition of those we emulate. If everyone on the block owns a Mercedes, it's understandable that the one remaining household on the street feels inadequate for not being able to afford the same car. Many of the families, despite the outward display of wealth in the form of a car brand that has put a lot of marketing effort into making sure its vehicles are perceived as high-class, may be struggling financially. The car may be leased, and they might not be able to afford the payments. The families outwardly displaying their wealth might have no retirement plans, and their children might require loans to attend college. The pressure to appear the same as everyone else is strong enough that the financial priorities that aren't outwardly facing often assume a lower priority.

This type of pressure manifests itself in early adolescence. Children at this age are often judgmental and cruel, and the pressure to be like others in a particular social group manifests in a big way. Kids who either refuse to conform to others' expectations or can't fit in due to their families' financial constraints can become social outcasts. This doesn't need to be damaging in the long run, but it can make life difficult for middle-schoolers. For some, this feeling - the need to fit in by adjusting outward appearances to be like others - never goes away.

If social groups weren't enough, businesses whose primary goal is to make money have learned how to take advantage of the need to fit in. Marketing to children is so powerful because most parents are willing to do whatever it takes to keep their children happy. If the latest toy is perceived as being this year's must-have at Christmas, it can be difficult to say, “No, we can't afford it,” to a sweet child who has behaved all year. Parents have the responsibility to curb expectations and lead their children in such a way that they don't need to care as much about outward appearances, fitting in, and resisting the highly-targeted and performance-tested marketing messages from a ever-widening array of media.

The Wall Street Journal articles offer some concrete advice for adults looking for new ways to feel comfortable saying no. Not wanting to be embarrassed is only one reason people don't say no to spending in social situations, however. The article doesn't address another important factor - not wanting to disappoint friends. Keeping up social relationships is an important part of having a fulfilling and happy life for most people, but it's impossible if you turn down every request to get together for dinner because your budget doesn't allow it.

Rather than feeling you need to say no all the time, change the conversation. Take initiative and suggest other ways of getting together and socializing that don't require expensive restaurants or $15 drinks at the fanciest clubs. Organize a pot-luck dinner or a picnic in the park. Get together to play games. Attend a gallery opening. Find events in your community that don't require an outlay of cash but still provide for a social experience. Rather than being the person saying no, you're now the one with great ideas for activities, saving everyone money, and you're not disappointing anyone.

The article suggests blaming your financial adviser when you need to say no to your friends. Punting responsibility is a quick way to get out of a sticky situation when you feel you need to give some kind of an explanation beyond “no.” Depending on how much you're willing to share with your friends, you might want to say something along the lines of, “I'm saving money for x, so I can't fit this into my budget this month. How about next month?” This shows that you, not your financial adviser, are responsible and in command of your money, and describes a healthy attitude towards savings. Plus, the word “no” triggers such negative responses in the brain, it's better to avoid it and turn the conversation around in certain social situations.

And who knows - if you're genuine and non-judgmental with your friends, your approach to saving money might have a good effect on your friends' attitudes. They may think more about savings when they hear you are taking a positive approach to your money.

How do you say no to spending in social situations or to your children?

You can view the segment on HuffPost Live to read the interactive discussion that occurred during the broadcast.