How keeping up with the Joneses is ruining your finances

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.

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.
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.
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?

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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.

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