I recently read that 40% of millennials are going into consumer debt to keep up with their peers. When I read the CNBC Money article I felt like screaming, “stop comparing yourself to others!”
Between financing their wedding trips, or just a night out on the town, the days of keeping up with Jones's are gone…. but it isn't better, it is probably worse.
It is now the day of keeping up with everyone and everything you might see on social media.
The glamour shots on Instagram, the trips and new cars on Facebook, or even the Snapchats that show a life of 24/7 entertainment make keeping up all the rage.
We now live in a world of comparison that runs rampant.
So rampant, that many believe social media use among teens is now being linked to the increasing rates of depression and anxiety. According to Dr. Jeff Nalin of the Anxiety & Depression Association of America,
Social Media and adolescent depression – the two go hand in hand.”
And while the social media comparison issues of the world are not the focal point of this article, financial comparison is actually equally as detrimental.
Related Content: Market Watch: Curious About Peers Spending?
Why You Should Stop Financial Comparison
Comparison is not just some millennial issue that only happens on social media.
Financial comparison has been around forever. The older generations are known for purchasing homes they can't afford and outdoing the neighbor with the new car – hence the whole keeping up with the Jones's thing.
While the boomers were never really the best example of living below their means, (they just did it differently). it doesn't matter who you are now – Americans as a whole suck at saving, not just millennials.
Savings rates in 2017 were at the lowest ever, below 3% (One could only think, if people are not saving, most likely they are spending). Yet – in order to retire most financial planners will recommend a bare-bones minimum savings rate of at least 15%, preferably 25%.
But if nobody is saving, what are they spending their money on…?
Is consumerism making people happy?
Is buying new stuff really that fun?
Or is it all just an act to keep up?
One thing that can completely uproot and destroy financial security and even worse, happiness, is Financial Comparison
“The roots of evil, lie in the seeds of comparison”
Keeping Up With Everybody
I will never forget in middle school my best friend's parents got a new car. Their neighbor got really upset because that was, “The same car they wanted to get,” and now they couldn't get it.
It is sorta funny, but that is literally how people think.
They compare everything. It dates back to our primitive human selves when we operated in groups in fear of being exiled if we didn't do our fair share.
The paleolithic people of the world would kick you out of the clan if you didn't do your hunter/gatherer job, therefore they competed to make sure they stayed valuable within their group.
Now instead of competing for survival, humans compete to see who looks better, drives a nicer car or has a fancier title. For visual proof – just hop on LinkedIn and look at job titles or on Instagram. You can witness seemingly normal activities, like going grocery shopping, turn into a runway show in a matter of flashes.
But I can't point the finger, because I did the same thing. Personally, I used to think I needed (insert any of the following from the list below, except the handbag) in order to keep up with society…
- The big house.
- The leased luxury automobile.
- The brand new iPhone 10.
- The newest designer handbag.
- The fancy job.
- The 3rd college degree because everyone else was getting one.
- The clothes on credit.
The list goes on, but what I really needed was a perspective change. As I started to navigate the world I found out this:
Looks can be deceiving, really deceiving.
Stop Comparing Yourself
Trying to keep up financially can be a never-ending battle between you and your happiness!
Trust me I tried when I bought a huge truck I couldn't afford. Or when I thought because I had my own house at 23 I was some anomaly. But really I was just fooling myself.
I wrote one time that I don’t remember a single gift from my grandma other than here handwritten note and picture she gave me in 2016.
While it has taken maturity and time to realize this, the material accumulations really mean nothing when it comes to happiness. My new truck was awesome for about a month. The new townhouse was cool until I had to make mortgage payments.
Ask me now, and I would tell any person to choose happiness over the battle to keep up… because trying to keep up is something you will never win.
Some things you can not put a price on.
You can not put a price on your health, marriage and relationships.
I personally chose a shorter commute, more time off and a rewarding career for less money than a job where I could make more, but with less quality of life. That is the kind of decision we all have to make, that can be different for every person.
I started putting an emphasis on my health and relationships and stopped living for the weekends once I realized that doing what everyone else was doing wasn't really that cool.
Prior to meeting my wife, that was not normally the case. Now in my 30’s, I started realizing there is more to life than working to just pay bills and have fun. The goal was to work hard and play forever, not play now and pay forever.
A recent CNBC article was quoted as saying less than half of adult Americans have $1,000 to their name.
In other words, more than 50% of the population could not afford a brake job and a blown water heater in the same month without having to take out credit card debt.
YET…there are people you and I know who act like they have it all together. And fro the outside they do, but on the inside, it is a different story.
Statistically speaking, if you lined up 10 people and asked them to produce $1,000 cash for some sort of emergency purchase they couldn't do it.
Chances are, most people are not doing as well as you think… and they're not thinking about you as much as you think they are.
Related: Why You Should Have An Emergency Fund
Just be real to stop comparing yourself.
If you want to know how to stop comparing yourself, not just financially, but in general, it all starts with being really true to YOURSELF.
As the Greek Stoics said,
“The war inside of us is usually a result of our conflicting desires, our screwed up judgments and our biases thoughts”
Conflicting desires (Wants) and poor judgment (Misinterpreting everyone else's success) are why we compare ourselves but does it really make anyone happy?
To stop comparing yourself to others you need to be REAL and realize this as I alluded to earlier:
People are not thinking about you as much as you think they are, so stop comparing yourself to others.
Financially, how they live, their jobs etc – it doesn't matter. Just simply be happy for others but real with your situation. For one, you don't know their goals, ambition or what they did to get where they are at.
Secondly, what others do or don't do has no bearing on your financial future, unless you compare yourself.
Here is a real scenario an acquaintance who is a loan officer at a bank told me about that fits perfectly:
People will come into our office, dressed to the nine, driving a brand new car, with a loan application for a house. Upon first glance, we prejudge, and think they must make multiple six figures”.
He went on to say, “The funny thing is, I don’t know who they are trying to fool other than themselves because I know exactly how much they make each month once we start crunching the numbers. Their credit, auto, and student loan debt accounts for over a third of their income and they’re buying power is super limited and they act shocked when I inform them they’re not doing as well as they think”
Step 7 in my Steps to Financial Security article talks about being really honest with your finances is the most important thing you can do. We can all improve in some sort of personal finance area…
- Got auto loans, pay them off and save more.
- Already have a mortgage, save up then focus on accelerating your payments.
- If you don't want to have kids, but your friends are, don't have kids.
Want to pay off some student loans, but everyone else is having fun? Pay them off anyways.
Like my friend said, the only person people are fooling most times is themselves. So stay off social media, don't compare and remember….
Be real with yourself and your finances you can live a life you might have never thought was possible.
Q: How do you stop comparing yourself? And tips? Comment below!
Josh writes about ways to make money, pay off debt, and improve yourself. After paying off $200,000 in student loans with his wife in less than four years, Josh started Money Life Wax and has been featured on Forbes, Business Insider, Huffington Post and more! In addition to being a life-long entrepreneur, Josh and his wife enjoy spending time with their chocolate lab named Morgan, working out, helping others with their debt and recommend using Personal Capital to track your finances.