We usually think of peer pressure and groupthink as bad things, but sometimes it's actually good to take a peek at what your friends are doing. New research suggests that one trick to curbing overspending is simply sharing your budget and taking notes.
Video of the Day
Researchers at the University of Chicago and the University of Maryland studied anonymized data from the website Status Money, which shows how your budget stacks up to your peers'. If you've never heard of it, don't feel bad — the average user spends about $4,000 a month, and the lowest annual income bracket is about $40,000, which does skew results. But among about 6,000 users, many who were significantly outspending their friends quickly made big cuts to their budgets to rein them in.
"Big" in this case, on average, means about $600 per month. Going up and down income brackets, users curbed spending by between 19 percent at the bottom and 10 percent for incomes $120,000-plus. If this sample isn't representative for your peer group, the study could still help you. You don't need a website to check in with how your friends are budgeting their money and time.
If you're not naturally observant about things like other people's spending, just track your own charges at an outing. Look at your total and compare it to the group's. If it's way bigger than the total divided by the number of your party (yourself included), start noticing that. Keeping a note in your phone or daily planner can help. Shifting your budget doesn't have to happen all at once, but it's easiest to cut back when you know what's out of whack.