The hidden cost of peer pressure: How social trends can lead to financial ruin

It often starts subtly. You see a friend’s post on Instagram he just got a new car. You are happy for him, of course. But deep down, a tiny voice whispers, “Why not you?” The next day, a colleague shares pictures of their child’s birthday party, including entertainment for kids, themed decorations, and a professional photographer. Another post shows a wedding that looks like a movie set. And just like that, you begin to wonder if your quiet, simple life is enough. We are living in an age of constant comparison. It is easier than ever to feel like we are falling behind not because we are doing badly, but because we are watching everyone else showcase their best moments 24/7. And the pressure to “catch up” or “keep up” can quietly lead us into financial decisions we later regret. A simpler past, a smoother pace Not too long ago, life moved differently. People ate from their gardens, built homes with help from neighbours, and celebrated weddings without worrying about drone cameras or décor themes. Sure, some were wealthier than others, but the gap didn’t feel overwhelming. More importantly, no one was expected to live beyond their means to prove themselves. If someone had more, well, that was okay. You focused on what you had and kept going. Now, the game has changed. The cost of living isn’t just about food and rent, it is about looking successful. Unfortunately, the price of appearances is high. The financial cost of living for others Today, many people are borrowing not out of necessity, but out of pressure. Pressure to have the latest phone, drive the right car, throw the perfect party, wear the right brands and send their children to the best schools. And while these choices might earn admiration for a moment, they often lead to sleepless nights, mounting debt, and financial instability. It is a cycle we don’t talk about enough. People are taking loans to impress people they don’t even talk to. They are living outside their budgets to look like they are winning at life. And behind closed doors, they are anxious, broke, and wondering how it got this far. Let us be clear: there is nothing wrong with wanting nice things. But when we chase them to fit in rather than because we can afford them, the cost becomes more than just financial, it becomes emotional. Why do we fall into the trap? We humans are wired to compare. Psychologists call it “social comparison theory” ; we evaluate ourselves based on how others are doing. But in today’s hyper-connected world, we’re comparing ourselves not just to neighbours and relatives, but to influencers, celebrities, and strangers with perfectly curated lives. Social media doesn’t show bank accounts. It doesn’t show the stress, the overdrafts, the arguments, or the quiet moments of doubt. Yet we compare real lives to someone else’s highlight reel and feel like we are not enough. And so, we spend. And borrow. And stretch. All to look like we belong. The hidden damage What’s most heartbreaking is that so many are suffering silently. The car you saw someone driving might be leased beyond their means. And the housewarming party was possibly funded by a loan they’re now struggling to repay. This pressure doesn’t just hurt bank accounts. It leads to anxiety, depression, broken relationships, and long-term financial damage. It becomes a weight people carry quietly until it becomes too much. Reclaiming financial peace So how do we break free? It starts with self-awareness. Ask yourself: Is this what I want, or what I think I should want? Recognizing your values helps you make choices that align with your life, not someone else’s. Next, learn to manage your money intentionally. One practical method is the 50/30/20 budget rule: · Spend 50% of your income on essentials (rent, food, transport). · Allocate 30% for wants (dining out, clothing, hobbies, etc.). · Save or invest the remaining 20% (emergency fund, debt repayment, long-term goals). And don’t underestimate the power of digital detox. Take breaks from social media. Unfollow accounts that fuel comparison or insecurity. Instead, follow those that uplift, educate, and inspire. Lastly, remember: your financial journey is yours alone. You’re not late. You’re not behind. You’re building something real and that takes time. Final Thoughts: Your Life, Your Pace To sum up, there is a great danger in living under peer pressure because it heavily affects both financial and mental health. You can live a stable financial life if you choose to make a conscious decision on your lifestyle while prioritizing financial stability over fleeting social trends. Financial freedom is within reach, but it starts with saying no to unnecessary pressures and yes to a more mindful, intentional way of living. Always remember this, track your spending, set clear financial goals, choose your friends wisely, and practice mindfulness in purchasing or spending decisions. The writer is a Senior Economist at National Bank of Rwanda.

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The hidden cost of peer pressure: How social trends can lead to financial ruin