Keeping your finances in line is a long and difficult process. When guilt from your friends and family gets added to the equation, it becomes an even more challenging ordeal. Often, we feel compelled to help out our loved ones when they’re down on their luck financially, but it may not always be the best idea.
Dave Ramsey, personal finance expert, host of “The Ramsey Show” and founder of Ramsey Solutions, cautions his listeners about how to deal with friends and their money issues. In a recent video on his YouTube channel, Ramsey and co-host Dr. John Delony read a comment from a listener who’s doing well financially but has friends and family around her calling her greedy and selfish for her success.
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Ramsey considers this type of negativity to be a financial red flag. Immediately after hearing the listener’s dilemma, he said she needs to get a new group of friends. The duo of Ramsey and Delony then broke down the main reasons why ditching the negativity for a group that prioritizes financial health is important.
Protect Your Mental Health
Ramsey has a term for negative people who play the victim and blame everyone else for their misfortune: energy vampires. These energy vampires are the opposite of those who encourage and applaud your success. Because of this, Ramsey advises you to tell yourself, “The people that I spend time with that are negative are going to be limited to the amount of energy that I have to help them not be negative.”
The U.S. National Institutes of Health reports that the quality of your relationships has a profound effect on your self-worth and mental health. Friendships that offer support and understanding will improve your self-worth and happiness. On the other hand, low-quality friendships that are full of criticism and conflict are linked to anxiety and depression.
Delony put this into perspective, saying that time spent with energy vampires who are jealous of your financial success also keeps you from spending time with your significant other, kids or other positive people.
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Make New Friends
If many people in your community act negatively toward you because of your financial success, you need to find a new community. Both Ramsey and Delony acknowledged that breaking into a new social circle and making new friends can be difficult, but the rewards are great.
“You become who you hang around with,” Ramsey said. “You talk like them, you think like them … [and] you vote like them.”
The duo equated this situation to someone with a substance abuse problem. If you want to quit whatever substance is negatively affecting your life, you can’t continue to hang around friends who continue to use it. Instead, you must seek out new friends with different interests that support the lifestyle you want to have.
Likewise, energy vampires will continue to make you feel guilty about the hard work you’ve put in to secure your financial health and eventually pull you down to their level. Even if your finances are in order, spending too much time around friends who act as victims will normalize the behavior. You’ll begin to make excuses for your own shortcomings as well instead of stepping up to fix them.
Think Long Term
When you’re dealing with money, keeping a long-term perspective will yield better results. This is equally true when it comes to your relationships.
“Fifteen years from today, your income will be within 10% to 15% of the average of your 10 closest friends’ income,” Ramsey explained. His point mirrored a study conducted by Raj Chetty, who analyzed 72.2 million people and their Facebook friendships.
Delony pointed out that prices have recently increased for groceries and housing. In fact, the U.S. Department of Agriculture’s Economic Research Service found that food prices grew by 5.8% in 2023. The Federal Housing Finance Agency reported a 4.5% year-over-year increase in housing prices between 2023 and 2024.
These increases won’t change just because you and your friends complain about them. Taking matters into your own hands and securing your financial health will make it easier to withstand economic downturns.
“We don’t have people on the debt-free stage screaming [and] complaining about inflation,” Ramsey said. “None of them are griping about interest rates. They’re not talking about the cost of eggs. They’re not talking about ‘Bidenomics.’ They took control of their life.”
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This article originally appeared on GOBankingRates.com: Dave Ramsey: This Financial Red Flag Means It’s Time To ‘Get New Friends’
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