Episode 150: Let’s Talk Financial Comparison

Are you guilty of trying to keep up with the Joneses? We all are sometimes. Let’s look at that phenomenon and see what we can learn from it.

Show transcript:

Hey there. I’m Dawn Starks, author of Simplify Your Financial Life and your host for the SimpleMoney Podcast, where we make personal finance simple. Welcome. This is Episode 150: Let’s Talk Financial Comparison: Keeping up with the Joneses. You’ve heard of keeping up with the Joneses, right? Well, I’m here to tell you that the Joneses are not completely useless.

We can learn a lot from watching our behavior when it comes to those next door neighbors, or friends or family members who we might consider to be the Joneses. You know, those people who always have all the newest things, they have the newest technology, maybe the new cars, great clothes, just all the gadgets. And it’s the kind of thing that makes us really jealous.

And it makes us want to follow suit. It makes us want to buy those things, have those things, BE LIKE THEM. So when we think about comparison, it’s really a bad situation, right? I mean, it’s lethal. It’s not good for us to be comparing ourselves to others in any way, whether it’s the stuff that we own or the way that we perform in our job or the way that our life has turned out or the way our Instagram post looks compared to

some other people’s Instagram posts, and so on. You know, it’s just, it’s not good. It really can eat away at you. And so when we’re watching what our friends and our family, and even perfect strangers, when we’re watching what they’re doing, especially on the internet and we see what they’re buying and we see how they’re living, then we can get very,

very jealous. And just envious of that. So in the worst situations, we actually jeopardize our own financial wellbeing by stretching our spending and, like, blowing our budget in order to keep up with those Joneses, in order to stay even with the perceived balance between what those people are doing and what we’re doing. It’s like we want to keep, you know,

we want to maintain face. We want to maintain our position in the world. So we want to have what everyone else has. So when we do that, we can actually jeopardize our budget and jeopardize our financial success for our family and our household. So I could tell you just don’t do that, right? Just don’t compare yourselves to the Joneses.

Don’t try to keep pace with them. It’s a losing battle. And what good will come of it? Nothing. So I could just tell you that, right? But it’s very difficult. It’s easy for me to tell you, but it’s not so easy to do because it’s just kind of human nature, right? So I think that,

you know, ideally we could all stop and think about this for a second and say, you know, this is kind of silly. It’s silly to compare ourselves to other people, but as I said, it’s human nature. And so, instead of trying to tell you, “Just stop doing it,” or ask you to just think to yourself that it’s silly and that you need to stop doing it,

let’s learn from our reaction to those Joneses. So let’s look at a few different things and see what we can learn about our behavior and about what those Joneses are up to. So I have four ideas for you to chew on. So you can do this the next time you’re drooling over what your neighbors or your friends, or your friends on social media have purchased,

or the travel that they’re doing or whatever it is. You can think about these then, or you can think about these now in order to prepare yourself for those inevitable opportunities when you will be thinking about what other people have that you do not. So let’s talk about these four ideas. And so idea number one is that ostentatious spending could be compensating.

So what do I mean by that? Well, have you ever read the book The Millionaire Next Door by Thomas J. Stanley? In that book – and it’s a great book, if you haven’t read it, it’s fairly old now, I think it was probably written in the ’90’s or 2000’s/early 2000’s – but in that book, Stanley talks about the fact that most people who are wealthy in the world,

they got that way slowly, and they don’t tend to flaunt their money. So they didn’t just get rich quick. They built their money, usually via running a business or starting a business. And they don’t tend to be ostentatious with their money. They don’t flaunt the money that they have. The people who flaunt the money that they have are the people who tend to be high earners,

but are not truly wealthy. So what do I mean by that? Well, they earn a lot of money, maybe they have a high powered career and they make a lot of income, but they don’t actually have a lot of wealth because they haven’t taken that income and used it wisely. They’ve blown it, spending on ostentatious things instead of investing it or buying real estate or other appreciating assets to grow their wealth over time.

So when you see people who are boasting on the internet about what they have, or what they’ve purchased and all that, the tendency, from my perspective is, and I would like to suggest maybe it should be for you too, is that what are they compensating for there? There’s probably no real stable wealth behind that purchase that they made,

because remember most wealthy people – people who are truly wealthy and wealthy in a healthy way – don’t typically flaunt it. You know, they’re not out there saying, “Hey, look what I bought! Hey, look at my new car! Hey, look at my expensive vacation!” So whenever there’s boasting on the internet or just among your friends and acquaintances,

just try to question that motivation and see what’s behind it. I just always assume that people are insecure and that that’s why they’re doing that, that they want to show the world how much they have, or pretend that they have, by showing off their purchases or their experiences. Okay, so that was idea number one. Idea

number two is that buying stuff doesn’t make you happier in the long run. So, you know, those Joneses, they might be all smiles right now while they’re showing off their shiny new thing, you know, whatever it is, but what’s the benefit to them in the long run? More money can help you feel happier in your life, studies have proven that – up to a point,

but only up to a point – and it’s not really as much as you might think. I believe, if I recall correctly, that the study that I read said that up to about $75,000 here in the US, that that’s about, you know, that having more money or more income per year up to that income roughly, per year, can make you happier.

So, in other words, if you only have $30,000 worth of income and your income increases to $50,000, chances are that’s going to make you happier. But once you hit roughly that threshold of $75,000, earning more income doesn’t really actually make you happier. It just generates different problems in your life. So it’s not that making more money is a bad thing,

it’s just that the correlation between happiness and making more money breaks down at a certain point. And it might be a different point for everyone, but the study suggested, I believe it was $75,000. So if you’re struggling to make ends meet, and then you have more income come into your life, you get a raise, you have a side job that gives you more money,

whatever, then you probably will have a better outlook and you will feel like your life is improving. And so that will actually make you feel happier. But as I said, it only works for a while. Eventually having more money doesn’t impact your happiness at all. So you wonder, right, what about these people who – you know, the Warren Buffets of the world,

the Bill Gateses is of the world, the Jeff Bezoses of the world – why do they keep working, working, working to try to make more and more money? Well, I would argue, and so would the studies, that it’s not for happiness, it’s probably more for the challenge of it, or the enjoyment of work, the enjoyment of growing a business.

So it’s less about the money and it’s more about something else that, you know, that feeds them or fulfills something in them. So people think though, that making more money is going to make them happier. And so I would argue and suggest, when you’re thinking about those Joneses and you’re feeling jealous about it and wishing, “Wow. If only I had more money and I could afford that car or those clothes or that trip,”

think about the fact that it’s really not necessarily going to make you happier. Okay, so the third idea or thought to think about is did those people, the Joneses, did they provide exceptional value? All right, what does that mean? Well, if you are going to be – you get wealthy by providing exceptional value in the world,

okay? And so when you see the Joneses, and sometimes that takes the form of like famous people, you know, who are online. And so to me, what’s really irksome is to see some of those famous people who are really just famous for being famous, and they’re wealthy just because they’re famous, as opposed to they are actually doing something that’s providing exceptional value.

So for instance, you know, we can rant about these professional athletes or actors and actresses who make just gobs and gobs of money for their work, but they are providing value, right? They’re providing entertainment, they are creating art in the case of a movie. So they are providing value, in some fashion. Now, so we could have,

that’s a whole different conversation is whether or not the compensation they’re receiving is warranted for the amount of value. That’s a totally different conversation. But the point is is that they are providing value and therefore being compensated for the value that they’re bringing and that’s helping them build their wealth. So oftentimes we see people, you know, those Joneses I keep referring to, those people who are out there spending,

and we want to really take a step back and say, “Okay, well, did they actually provide great value? Because if you know it’s your friend who’s been working super hard and has been putting in the, you know, the hours for years and years in her career, and has grown her business or her career to the point where she can now afford nicer things

than maybe back in the day when you first became friends, that can help tame that jealousy monster. If you recognize that it’s not unfair, because if she’s worked harder than you have, and she has more things, well, then that’s sort of reasonable, right? So instead of just automatically jumping to, you know, “Oh,

it’s not fair, it’s not fair,” try to look behind, you know, your assessment of that person’s situation and see, did they provide exceptional value? In their job, in the world, in their life, to somebody else, that sort of thing. And then you can, you know, take a closer look and see what are you actually really jealous about?

Is it just about the money, or are you jealous about the fact that maybe your friend took advantage of an opportunity that you didn’t, that you could have, but you didn’t or something like that. Okay. So there may, I’m suggesting there may be more to it than just being jealous of the wealth. All right. So then the fourth thing to think about when we’re talking about these Joneses and trying to learn something from our reaction to the Joneses,

the fourth thing is to practice gratitude. I talk about this a lot. So when the Joneses are making you jealous, stop for a minute and count your own blessings. You know, think about all the good things you have going on in your life. Because the fact of the matter is, is you don’t know what’s going on behind the curtain at the Joneses house,

right? But you do know what you have to be thankful for. So the Joneses on the surface might be posting on their Instagram or Facebook, and it might look all happy and rosy, but behind the scenes, maybe there’s not such a happy picture, and maybe it’s not so rosy. And that’s, again, human nature, you know, people are going to,

and especially in this day and age with the social media situation that we have, people want to put their best face forward. So if they’re having a rough time in their life, chances are they’re not going to post pictures about that or posts about that. And so you don’t really know what’s going on. But you do know what’s going on in your life and what’s going on behind the scenes at your house.

So count your own blessings and say, you know, “You know, I might not have as fancy a car as my neighbor, or I might not have as nice a wardrobe as my friend, or I might not have as great a job as my brother, but I do have…” And then list them. What do I have? I have a great family.

I have health. I have plenty of money to pay my bills. So there’s all kinds of things that we can be grateful for. And, because the secret is of course – which has nothing to do with the Joneses – but the secret is, is that in order to be wealthy and to get wealthier, you have to earn that wealth, right?

So in order to earn that, you have to kind of attract those opportunities and you do that through being grateful and having a real firm grasp on your gratitude. So I encourage you to do that, shifting that negative feeling of jealousy into one of gratitude. And when you practice this, it becomes easier, but it also becomes very,

very powerful, because you can really turn yourself right around. You start to get into a funk about something, and then you stop and you say, “Listen, this could be so worse. I could have such a worse situation than I have right now. I’m just grateful for the situation that I have and where I am.” So that was it.

So those were four ideas to think about when you’re drooling over whatever the Joneses are up to these days. And I would love for you to let me know what you think about this. So if you have thoughts about the Joneses or have had experiences where you’ve felt jealousy, or if you have your own way of dealing with it and you want to share,

that’d be great. You can email me at dawn@simplemoneypro.com. Or if you’re a Facebook user, you can join the free Facebook community, the SimpleMoney Community, and you can just go on there and join that group, it’s free, and you can share your thoughts there. So that’s it for today. Do you enjoy the SimpleMoney Podcast?

Tell your friends, and please be sure to subscribe and leave us a review. Find out about our blog, courses, the SimpleMoney Club, and my book by visiting simplemoneypro.com. My book, Simplify Your Financial Life, is available for purchase online, or you can ask your local bookseller or library to order it. See you next time.


2 responses to “Episode 150: Let’s Talk Financial Comparison

  1. Great podcast on Financial Comparison. I really appreciated all four points. Very thought provoking. Thank you.

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