Reference groups are social groups that fall into two categories:
Reference groups guide and shape people’s behavior by influencing them to consider what the people within the reference group would think about that behavior.
Whenever you ask yourself about ‘they,’ as in what ‘they’ might think, you're asking yourself this question about a reference group. The "they" in this query is the reference group.
The important point is that in society, people are not making decisions in isolation. As the divorce example illustrates, many reference groups are involved in the thought process. People use ideas, expectations, and norms of others to help make sense of their own lives and to guide their decision making. So far, though, the divorce example has only taken consideration of the groups to which you currently belong--your family, your religious group, your friends, or even your children.
There are also reference groups that you use to which you don't belong. These are reference groups to which you aspire to belong in the future, groups whose opinions you value.
IN CONTEXT
Suppose you just graduated from college and you decide to take a year off before pursuing your career. If you consider the reference group of your future employers, you may decide that taking a year off isn’t such a good idea, because those people may negatively view such a gap on your resume.
In this manner, that reference group may influence your behavior now, because you take into consideration that those future employers might think you lack conviction or ambition, relative to someone who didn’t take a year off and instead immediately pursued a career. You would be using that reference group to help you think through your current situation even though you don't belong to it now, because you may hope to be in that group in the future.
The diagram below shows you in the middle surrounded by a several hypothetical reference groups to which you might belong, whose opinions you value--your family, friends, future goals, and even children if you have them.
Many parents say that maintaining their honor and merit in the eyes of their children is very important to them; if this is the case for you, then your children are going to be a primary reference group for you.
Source: This work is adapted from Sophia author Zach Lamb.