How Your Circle Of Influence Impacts Your Finances

Circle of influence

Not too long ago, I read an article that touched on shifting your circle of influence. It has resonated with me ever since because I'm a firm believer that your circle of influence has a strong impact on how successful you are. This is especially true when it comes to your finances. Simply said: "You are the average of the 5 people you spend the most time with".

Studies show that negative moods and emotions are actually contagious! This explains why we tend to have the same habits as those we keep company with.

Negative people have a negative impact, and positive people have a positive impact. So, if you're surrounded by people that make poor financial decisions, you may end up just like them. That's why it's important to understand just how your circle of influence impacts your financial goals.

How your circle of influence affects your finances

The people (and things, i.e., what you read, what you listen to, what you watch, etc.) have a strong impact on your finances whether you choose to believe it or not. If you are spending most of your time watching or reading things that add nothing towards the progress you want to make with your finances, then it's the same. You'll find it harder to get the motivation that you need to start making progress.

Continuously surrounded by people who think they can never save or pay off debt and are all about accepting what life gives them? Well, then you are very likely to start thinking the same way because there's nothing really motivating or empowering you to do better. For example, positive affirmations can help you reach your goals. This shows that constant negative influences will have the opposite effect and prevent you from attaining your goals.

Have you ever noticed it's harder to eat healthy around those that are constantly eating junk food? It's because you're influenced by what others are doing. The same goes for your finances. If your friends are impulse shoppers and live paycheck to paycheck, you may develop these bad money habits. However, if you change your circle of influence to those who save money and work towards financial success, you will be motivated to achieve your money goals.

Figure out who's influencing your finances

It's easy to get caught up in others' behavior and not realize its effect on us. To figure out how your finances are being influenced, you need to do a financial health check. The best way to review your finances is to start a spending journal. This is where you will see what you are spending your money on and why you are spending your money.

Do you tend to bust your budget when you shop with your friends? Maybe you eat out more often because your friends constantly encourage you to go out with them. By identifying your triggers and habits, you can figure out how your circle of influence impacts your finances.

When to shift your circle of influence

Well, It's actually not that difficult to start. It's all about assessing the people and things around you as it relates to what you want to accomplish. That assessment will help you determine where you need to begin.

For example, if you've been thinking about paying off debt, but everyone around you is adopting a "YOLO" mentality, and you seem to have fallen into this same line of thought, that's an indication you need to shift your circle of influence.

If you've wanted to start your own business, but everyone around you thinks you are wasting your time, then that's another indication. Think you can't find a better job that pays you more money (which you can put towards your savings or debt) because everyone tells you that it's not possible?

For these different reasons you may find that your friendships feel forced and you are growing apart from your friends.

Well, it might be time to make that shift.

Surrounding yourself with the right people

You want to set a goal to find and surround yourself with the people and the things that will get you motivated to do better and challenge you to actually start accomplishing your goals. You are more likely to accomplish your goals if you are surrounded by the right influences.

However, keep in mind that shifting your circle of influence doesn't mean you start picking fights or cutting people off for no reason. It means that once you identify the type of people you want to spend more time with, you need to start spending less time with the people who have nothing to contribute to your purpose or progress.

It also doesn't mean that you never watch your favorite mindless TV show again; instead, it means cutting back the amount of time you spend watching TV so you can allocate some time to doing things like reading personal finance books or personal development books.

Don't have the right people around you?

Thanks to the internet! You can find virtual mentors online, i.e., people you admire or that have achieved a goal you are trying to reach and study everything they've done to become successful.

Read about them online and in books. Go over every interview and article you can find on them, listen to them speaking or watch them on YouTube. Learn how and why they operate the way they do, learn about their businesses, and why they are successful. Study their failures and how they overcame them. Let them become your new circle of influence.

Some of my personal virtual mentors? They include Warren Buffet, Sara Blakey, and Oprah just to name a few.

Improve your influences and mindset

The long and short of it all is that you can't allow yourself to become complacent; you can't settle. To achieve success, you will have to take a hard look at who and what you surround yourself with. You'll need to make positive changes, start taking action towards accomplishing your dreams of financial success into reality. Do this by attaining a positive money mindset, setting financial goals, and shifting your circle of influence to people who motivate you.

Start your journey to financial success by enrolling in our FREE financial courses. You will ditch debt, save money, and get the positive influence you need to reach your goals.

Scroll to Top