Discover the impact of false financial comparisons and uncover practical solutions in this enlightening issue.
Have you ever wondered why people could appear to be driving the nicest cars, be dressed in the newest fashions and high-taste jewelry and shoes, but would barely have anything substantial to qualify as assets?
It’s often because of a common trap – falling into the world of false financial comparisons. We believe we can match the lives of those who seem just like us. But hold on, there’s more to this story than meets the eye.
In this issue, we’re exploring this thought-provoking topic. With insights from bestselling author Manisha Thakor, we’ll cover:
- 🤼♂️The 3 reasons you can’t stop comparing yourself financially to others
- 🔑Solutions to help you beat the “they’re doing better than me” blues
- 🏃🏾♂️ What you need to do to run your own race
🔍 What’s Behind the Illusion?
Ever found yourself eyeing someone else’s lifestyle, thinking you could afford it too? You’re not alone. Manisha Thakor, the author of MoneyZen: The Secret to Finding Your ‘Enough’, highlights how we can fall into the trap of “false financial comparisons.”
We see people who seem just like us, living luxurious lives, and we assume we can keep up.
But is that really the case?
🌆 The Illusion of Fictional Lifestyles
Have you ever watched a TV show or movie and thought, “Why can’t my life be like that?” Manisha Thakor calls this the “Friends Syndrome.” Those stylish characters with their upscale apartments, high-trend wardrobes, well-stocked refrigerators and pantries, and stacked garages – can we really replicate that on our average incomes?
Thakor breaks down the unrealistic nature of these shows. For instance, when “Friends” aired she was a young 20-something investment banker living in New York. Her then $800-a-month salary afforded a 400-square-foot studio apartment in a four-floor building.
She couldn’t have dared to live in the kind of apartment the cast so comfortably rented. In fact, it would have taken more than half of her take-home income.
Thakor worries that people expect to live the kind of lifestyles TV characters do, especially if they work in similar jobs. Unfortunately, one of two following outcomes occurs:
- either they feel really bad about themselves for not living the same life as their on-screen role models
- or overstretch themselves financially to be like them;
—two instances that don’t have great results.
💳The Temptation of Easy Credit
Enter the world of accessible credit – where buying on a whim is just a swipe away.
Manisha Thakor points out that credit cards have replaced the once-common layaway plans. But this convenience can come at a cost. Are we really affording the things we buy, or are we stretching ourselves thin with debt?
The statistics point to the latter. According to a TransUnion quarterly credit industry report, credit card balances have gone up by almost 20% from just a year ago. Additionally, the average balance per consumer has risen to $5,947, the highest numbers we’ve had in a decade.
📱 The Social Media Mirage
Social media presents a glossy, airbrushed version of life. But what we see isn’t always the full picture. With images of lavish lifestyles bombarding us, it’s easy to feel inadequate.
Consuming too much such social media also drives bad spending habits. According to a 2022 Credit Karma report, nearly 40% of young adults admitted they spend more of their money on experiences than they do on necessities like bills.
However, things may not be all bad. Thakor says she’s hopeful thanks to noticing an increased desire from platform users to seek genuine connections. And of course, you can’t have a true connection if it’s based on false things.
🔑 “We’re all vulnerable to overspending”: What’s The Solution?
It’s always great to aspire for more, (after all complacency is the enemy of progress), but it’s more prudent to remember and stay true to your financial means and work your way up to achievable goals. And just how do we do that? We’ve got three helpful tips:
- Embrace Reality: Recognize that everyone cares about their status. It’s natural. So, let’s not pretend otherwise.
- Decode Social Media: Don’t be fooled by appearances. Behind the scenes, things might be different. Wealthy individuals often have frugal habits.
- Choose Your Circle: Be mindful of who you compare yourself to. Align your reference group with your genuine goals.
🌟 In Conclusion: Rewrite Your Own Financial Story…
It’s time to take control of your financial narrative. False comparisons can lead you down a path of financial strain. But armed with knowledge, you can emerge wiser, stronger, and more financially aware.
📢 Your Action Step
Now that you’re equipped with insights to overcome false comparisons, put your knowledge into action. Take a moment to reflect on your financial goals and the steps you’ll take to achieve them. Remember, your financial journey is unique, and comparing yourself to others won’t lead to true success!
