Business

How keeping up with the Joneses is ruining your finances

InternAdmin Contributor
Font Size:

At first glance, it doesn’t seem like there are many money lessons to learn from the “Real Housewives.”

One spent a season building a $1.8 million mansion and driving around a $1,280-per-month Escalade, only to file for bankruptcy with almost $11 million in debt.

Shortly post-bankruptcy, she dropped another $60,000 on a shopping spree …  so she could continue to fit in with those in her social circle.

Even if you don’t end up with millions of dollars in debt—or have friends who are millionaires—trying to keep up with the Joneses (or the Gorgas, in this case) can not only make you feel lousy about yourself, but also inspire bad spending decisions. We call this phenomenon “money comparisonitis.”

How Having ‘Comparisonitis’ Affects Us

In our own lives, the dangers of gazing enviously at the Housewives’ spending sprees, our neighbor’s new car or that family down the street who can send their kids to private school is not only the fact that it makes us feel bad, but that it literally distorts our view of reality.

In other words, we look at celebrities like the Kardashians or the wealthier people we know, and we try to emulate their spending habits. “You’re not being truthful with yourself,” says Susan L. Hirshman, President of She Ltd., a consulting firm focused on enhancing women’s wealth and author of “Does This Make My Assets Look Fat?”. “As they make more money, that allows them to live a certain lifestyle.” In other words, you have to face facts and spend in accordance with your own budget, rather than feeling entitled to live a certain way just because other people do.

But it’s not just about spending to keep up with the 1%: Hirshman says that comparing yourself to the people who are worse than you at managing their money can also be damaging. “If you have $5,000 in debt, and you compare yourself to a friend who has $15,000 in debt, you might feel like you have the right to treat yourself or splurge, because you’re so much better off than she is,” says Hirshman. But once again, she cautions, you’re engaging in a skewed version of reality.

So, how can you stop looking at yourself in the funhouse mirror and learn to live your richest life within your means?

1. Forgive Yourself

First you need to accept that comparing yourself to others—though not always the best thing for your well-being (or your bottom line)—is totally normal. In fact, a study of data collected since 1970 has shown that we base our self-esteem more on the money we make compared to others, or our relative financial status, than on our actual financial picture. As Hirshman puts it, “It’s human nature to compare yourself to the people around you, and to always want the biggest house, the nicest car, the most expensive clothes, etc. Everyone does it.”

So don’t feel bad for comparing yourself to your neighbors. You (and your pet green-eyed monster) are not alone.

2. Identify What You’re Coveting

Take a look at what you’re jealous of—it may not be what you first think. Are you actually envious of your sister’s six-figure income—or is it the fact that she can afford to travel frequently, which is something you’ve always wanted to do? Taking a moment to indulge in your comparisonitis can help you identify your real goals in life. If you feel like you’re too fixated on what someone else has to figure out what you really want, one fun way to identify your top money priorities is to create a financial vision board.

Once you’ve identified your goals, you can start making them a priority in your life.

If you want a raise or a promotion, read our guide to asking for a raise (or take our Build Your Career Bootcamp). If you want to save up for a big purchase, do some research on how much it will cost and decide how much you can save each month. Create a Savings Goal in LearnVest’s Budgeting Tool, and you’ll be on your way!

3. Neutralize Competitors

There will always be people in your life who inspire money comparisonitis by bragging about their luxurious vacation to Tahiti,  impressive salary or apartment you could never afford. While you can’t tell them point-blank to shut it, you can handle them in a way that leaves bad feelings by the wayside and lets you concentrate on working toward your goals.

Here are three ways to deal effectively with the people who tend to make your case of comparisonitis worse.

  1. Pretend you’re in kindergarten: This phenomenon is no different than the classmate who used to pull your hair, or the cousin who hid your Barbies: Sometimes, people just want to get a reaction out of you. By ignoring their competitive comments and changing the subject, you’ll deny them the pleasure of making you upset, and they’ll eventually stop crowing about their expensive new handbag.
  2. Compliment the competition: It takes two to engage in a money smackdown. If you don’t respond in a way that escalates the comparisons, the game will end. Don’t try to match—or one-up—your offender.  A simple, “Yeah, that is a beautiful watch—I can see why you like it” will put a swift end to the conversation.
  3. Level with them: If it’s a close friend or family member who’s doing the competing, have an honest talk about your feelings. Chances are, they’re unaware that they’re making you feel badly. By saying something like, “When you talk about how you’re going to spend your big year-end bonus, it makes me feel badly about my current work situation,” you’ll make them more sensitive to the issue in the future.

4. Love What You’ve Got

The thing about money comparisonitis is that, no matter how much you make, it never ends. In a recent Fidelity Investments survey, four out of ten American millionaires said they “didn’t feel rich.” (To be that, they said, they’d need to have an average of $7.5 million dollars.) That’s because, the head of the study said, “They compare themselves to their peer group.

How Is That Resolution Going?

Share your tales of triumph (or woe) in LV Discussions.

SHARE

Fact is, there’s always going to be someone with a bigger house, a nicer car … and the list goes on and on. But you can never know someone’s complete financial picture—or what sort of sacrifices they make to get the things you covet. Maybe they work 80-hour weeks, damaging their relationships. Maybe they appear to live lavishly but are actually sinking into credit card debt. Maybe their parents or siblings are helping them out financially.

Be grateful for the things you already have, whether that means your health, close friendships, the love of your family or your fulfilling career. As Hirshman says, “We look at celebrities and reality TV stars, and we envy the materialistic things that they flaunt. But at the same time, we selectively ignore the fact that they have to be followed around by television crews all day long, their marriages break up, they live life on the road, etc. Would you want to deal with that for the sake of five Chanel bags?”

One way to better appreciate the good things is to make a gratitude list every day, which will remind you of everything in your life you’re already grateful for. And, ultimately, that’s the best way to keep comparisonitis at bay.

More From LearnVest

Why the wealthy actually feel poor.
Learn five easy ways to self-motivate; read this.
Find out how to increase your happiness (without spending a dime).

This post originally appeared on LearnVest.  

Please follow Your Money on Twitter and Facebook.

Join the conversation about this story »

See Also:

 

PREMIUM ARTICLE: Subscribe To Keep Reading

Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!

Sign Up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
Sign up

By subscribing you agree to our Terms of Use

You're signed up!
BENEFITS READERS PASS PATRIOTS FOUNDERS
Daily and Breaking Newsletters
Daily Caller Shows
Ad Free Experience
Exclusive Articles
Custom Newsletters
Editor Daily Rundown
Behind The Scenes Coverage
Award Winning Documentaries
Patriot War Room
Patriot Live Chat
Exclusive Events
Gold Membership Card
Tucker Mug

What does Founders Club include?

Tucker Mug and Membership Card
Founders

Readers,

Instead of sucking up to the political and corporate powers that dominate America, The Daily Caller is fighting for you — our readers. We humbly ask you to consider joining us in this fight.

Now that millions of readers are rejecting the increasingly biased and even corrupt corporate media and joining us daily, there are powerful forces lined up to stop us: the old guard of the news media hopes to marginalize us; the big corporate ad agencies want to deprive us of revenue and put us out of business; senators threaten to have our reporters arrested for asking simple questions; the big tech platforms want to limit our ability to communicate with you; and the political party establishments feel threatened by our independence.

We don't complain -- we can't stand complainers -- but we do call it how we see it. We have a fight on our hands, and it's intense. We need your help to smash through the big tech, big media and big government blockade.

We're the insurgent outsiders for a reason: our deep-dive investigations hold the powerful to account. Our original videos undermine their narratives on a daily basis. Even our insistence on having fun infuriates them -- because we won’t bend the knee to political correctness.

One reason we stand apart is because we are not afraid to say we love America. We love her with every fiber of our being, and we think she's worth saving from today’s craziness.

Help us save her.

A second reason we stand out is the sheer number of honest responsible reporters we have helped train. We have trained so many solid reporters that they now hold prominent positions at publications across the political spectrum. Hear a rare reasonable voice at a place like CNN? There’s a good chance they were trained at Daily Caller. Same goes for the numerous Daily Caller alumni dominating the news coverage at outlets such as Fox News, Newsmax, Daily Wire and many others.

Simply put, America needs solid reporters fighting to tell the truth or we will never have honest elections or a fair system. We are working tirelessly to make that happen and we are making a difference.

Since 2010, The Daily Caller has grown immensely. We're in the halls of Congress. We're in the Oval Office. And we're in up to 20 million homes every single month. That's 20 million Americans like you who are impossible to ignore.

We can overcome the forces lined up against all of us. This is an important mission but we can’t do it unless you — the everyday Americans forgotten by the establishment — have our back.

Please consider becoming a Daily Caller Patriot today, and help us keep doing work that holds politicians, corporations and other leaders accountable. Help us thumb our noses at political correctness. Help us train a new generation of news reporters who will actually tell the truth. And help us remind Americans everywhere that there are millions of us who remain clear-eyed about our country's greatness.

In return for membership, Daily Caller Patriots will be able to read The Daily Caller without any of the ads that we have long used to support our mission. We know the ads drive you crazy. They drive us crazy too. But we need revenue to keep the fight going. If you join us, we will cut out the ads for you and put every Lincoln-headed cent we earn into amplifying our voice, training even more solid reporters, and giving you the ad-free experience and lightning fast website you deserve.

Patriots will also be eligible for Patriots Only content, newsletters, chats and live events with our reporters and editors. It's simple: welcome us into your lives, and we'll welcome you into ours.

We can save America together.

Become a Daily Caller Patriot today.

Signature

Neil Patel