Float Finance 1.3: External Influences on Your Money (Part 3 of 4)

Float Finance is an ongoing series breaking down the basics of personal finances and money.

Ryan P. Cleary
Money Matters
January 28, 2022

Originally posted on January 22, 2020

Note: Float Finance is an ongoing series breaking down the basics of personal finance and money

Why do we care about external influences? Aren't our financial decisions self-motivated? 

While we can control many of our financial decisions, outside factors (external influences) can also impact our financial choices. In this article, we’ll be taking a look at how external influences affect financial decisions and how we can deal with those influences. The key takeaway is that even though these external influences impact our financial choices, there are strategies available to us that can help us to stay focused on our goals.

Influences on choices about money

In our earlier articles, we discussed the impact of your personal values on your financial decisions. That still holds true, but external influences can also impact your financial decisions; these messages about money can be so widespread that you don’t even realize they’re there. 

Most of us are barraged with influences each and every day. These external influences can include advertisements, the media, celebrities, peers, friends and more.

External influences can be positive and help you to achieve your goals (such as if a friend suggests going to a free concert instead of a downtown club). However, they can also be negative and get in the way of achieving your goals (such as if another friend always wants to eat at a fancy restaurant). 

As you can imagine, negative external influences can make it much harder for you to achieve your financial goals, which is why it’s so important to understand how each factor influences your financial decisions.

Examples of external influences

Take a moment to think about your life and consider talking it over with friends or family. Think about the following types of external influences and consider recent cases where they helped you to make decisions about how to use your money.


When was the last time you saw an ad online, on TV or on a billboard? The chances are that it’s been less than half an hour. Can you think of any cases where they made you aware of a product which you later purchased or used? Perhaps an ad made you consider switching to a new product. Advertisements aren't an inherently bad thing, but you need to be aware of when they’re influencing you.


Where do you usually get your news? What about watching or streaming movies and TV shows? Do you ever notice products in the shows or adjust your habits based on the stories that you consume?

Celebrities and influencers

Do you pay much attention to celebrities or influencers? Have your ever bought a brand or tried a new activity after learning about it from a celebrity or influencer that you admire? How about one you intensely dislike?

Friends, peers and family

This can be one of the most powerful influences there is, in part because of a phenomenon called social proof. Think about the things that they value – there’s a good chance that they influence your own habits.

Social pressure and advertising

Have you ever wanted something that someone you admire has, such as a celebrity, artist, influencer, friend or family member? Perhaps you’ve been tempted by their clothes, style, vacations, cars or lifestyle.

Noticing what other people have and wanting to share in it is human nature. It’s where we get the expression “keeping up with the Joneses”. You might feel as though you have to spend money to be more like them. It’s a totally normal feeling to have, but it can be difficult to deal with.

Advertisers spend billions of dollars every year to convince us to want things and to try to influence how we use our money. We’re often influenced by advertisements and media in ways that we’re not aware of. 

This can lead to us purchasing things that we weren’t planning on buying, in a phenomenon that we call “impulse purchases”. It’s okay to do this occasionally if you plan for it in your budget (which is why we suggest setting aside “fun money”), but doing it too often can prevent you from reaching your financial goals.

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