How Bad Financial Choices Affect Others

bad financial choices affect others

The phrase “personal finances” can be very deceiving. Many people take it literally and feel personally attacked when others give them money advice.

What you may not realize is, your financial choices, whether good or bad, affect more people than just you.

Even if you’re a young single person with no kids, your personal choices still have a ripple affect on the people you care about.


How it affects me

When my family asked what I wanted for my birthday, I said “I don’t want any gifts, let’s just spend a nice girls day out”.

And I truly meant it. This year I want to spend my money and time building memories and creating wonderful experiences with my friends and family.

I know everyone is on a budget these days, and money is tight. I feel it too, and I’m working fervently to become debt free this year.

So I understand birthdays, outings and gifts are not as feasible as they used to be. That’s why I wanted to take the pressure off and just spend the day out and about, with my sisters and a few girlfriends.

As it turns out, some of them won’t be able to make it. They have known about this birthday outing for weeks, and yet continued to make bad financial choices, that are now affecting my life.


How it affects your peers

My family’s mismanagement of money has cost me something I was really excited about.

While they can make it up to me later, it reminds me that no matter how disciplined I am with my finances, it doesn’t mean other people’s bad choices won’t boil over onto me.

If the recent economic situation has taught us anything, it’s that we are all interconnected with each other. Don’t fool yourself and think your mistakes only affect you.

If someone commits insurance fraud it makes everyone’s insurance premiums rise. If someone takes out a loan they can’t afford then defaults on it, it affects everyone.


How it affects your job

When you’re stressed out and making bad financial decisions, your job and coworkers will suffer too. If you interact with customers on a daily basis, they will feel the strain as well.

No one wants to hire a person who lives inside their own little world with no regard to others. This could be a good reason why you’re not very good at your job!

You don’t think what you do, what you feel and what you say affects other people. But it does. If you want your boss to like you and to get along with your co-workers, start by handling your money better.


How it affects your children

Financial choices normally affect children in one of two ways.

  • Immediately
  • In the future

Immediate effects. If your kids are small, they only notice the financial tension and distress within the family. They may not know exactly what it is, but you’re deceiving yourself if you don’t think they notice something.

No child cares about material possessions, if it creates mounds of debt and loads of financial stress to go along with it. They would much rather spend time with their parents, instead of never seeing them because they are at work.

Future effects. Your kids will notice even more when they’re older.The success or failure of their future is determined by your example and what you (inadvertently) teach them as they grow up.

I don’t promote the “victim” type of thinking, and we all have the power to change the future set up by our parents. But it doesn’t mean it won’t be difficult.

Learning a new way of thinking and completely making a 180, takes courage and lots of dedication. Putting in the work now to change your family tree, will keep you children from having to do it later.


How it affects your significant other

This is by far the one person who feels the brunt of your decisions the most, your significant other. If you aren’t working on your financial plan together and constantly updating each other, you’re probably having money issues.

I’m not saying you always need full disclosure and no privacy, but at a certain point, you and your partner need to get on the same page. No more lying, hiding shopping bags and throwing out bank statements.

Financial infidelity is nearly as powerful as sexual infidelity and both of them create a massive breaches in trust. Your best solution is to come clean now and start fresh.

Be smart and wake up to the fact that people depend on you, just like you depend on them.

Your decisions about money, don’t just affect you!

Photo Credit: AlmostHome

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About Carrie

Carrie Smith is the owner and editor of Careful Cents. She helps serious solopreneurs and full-time freelancers earn more money in less time, through systems and financial organization. She's been featured in The Huffington Post, Glamour Magazine, Kiplinger Finance and several other business websites. In May 2013 she quit her full-time accounting job to pursue entrepreneurship and blogging. You can find her on Twitter or Instagram @carefulcents.


  1. SO true! I once had a friend that told me she couldn’t go out with me for my birthday – instead, she went for a facial. I was hurt that obviously her facial trumped her friendship with me. 

    • You feel my pain then. :( I guess everyone has the right to make terrible choices, but it affects more people than they realize. Plus, they aren’t doing themselves any favors.

  2. Honestly, I don’t really think it’s your business to comment on your friends’ financial savvy because they couldn’t afford to come out with you for your birthday. I have literally in the past been so broke that I couldn’t have afforded $5 on something non-essential, and it does suck to have to explain to a friend that that’s the reason you can’t make it out, especially to something important. Unless you’ve got access to all your friends’ bank records, I don’t think you should be making that call.

    I had a birthday recently, and since all of my friends (and me!) are pretty consistently broke, I just invited everyone out to a bar. People could stop in, order drinks if they wanted, or just drink water and spend no money at all. In previous years, I’ve just hosted parties at my house, for the same reason.

    • Good point Melissa! For the most part I don’t have access to what other people do with their money, so I can’t really know for sure. What hurt me the most was that it was one of my sisters, and I do her bookkeeping and taxes, so I know what she spends her money on. Sometimes things come up and people hit rough patches. I’m trying to be more aware that my choices affect others, and I hope to bring everyone else to that realization too.

      I definitely should have been more creative and looked for cheaper alternatives, like you suggested. Hosting a get together at my house or something inexpensive probably would have been better!

  3. Samsmith Creative says:

    I don’t understand why they can’t still come to hang out with you, but not eat. Isn’t it free to sit with a group of people at Subway?

  4. I love this! Great advice and thoughts! I’m enjoying reading your blog !!!! 

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