Whether out of curiosity, jealousy, or superiority, we are all guilty of comparing our finances to other people.
We ask ourselves questions like:
“How much money does she make compared to me?”
“How can he afford to live like he does?”
“How much more debt does she have than I do?”
With social media being more prevalent than ever, we have an in-depth look into other people’s lives. We see our friends going on fancy vacations, buying houses already, or purchasing brand new cars, and we want to do that too.
The truth is, just because we think we have an idea of someone’s financial situation doesn’t mean we know for sure. Everyone is different, and it is impossible to assume correctly.
Whether you’re comparing to beat yourself up or to make yourself feel better, it has to stop.
Why we should stop comparing our financial situation to others.
Comparison is dangerous. It causes us to become emotional and generally feel badly about ourselves. Whether it’s a brief moment of sadness or a full scale depression, comparing ourselves to others does us no good.
Constant comparison demonstrates some ugly results, such as:
- Using others’ unfortunate financial situations to feel better about our own.
- Making excuses and losing power over our finances.
- Disregarding our budget, potentially resulting in more debt.
- Becoming ungrateful for what we have.
So how do we actually stop comparing our financial situation to others?
Practice gratitude
Being grateful for what you already have is a powerful thing. When we forget to be grateful, we become envious of others instead.
Regardless of how broke we might feel, we can consider ourselves lucky to have a roof over our head and food on the table. It can sound cliche, but many people don’t even have that.
Come to peace with your financial situation. Even if you’re the only indebted one of your friends, learn to be okay with it. Because, ultimately, it is up to you to get yourself out of debt and anyone has the power to do so.
To become more thankful, practice this simple exercise. Write down 3 short bullet points of what you are grateful for every night before bed. You’ll soon realize that, in retrospect, you are actually pretty well off! I promise, practicing gratitude is life changing!
Know your budget and stick to it
In order to succeed financially, you have to be honest with yourself. Can you afford to keep up with the Joneses?
Every budget is unique, and every individual has their own values. Why try to keep up with someone whose situation is entirely different from yours?
Be honest with yourself and what you can afford. Save money for the fun things you value, whether it be night life, travel, or food. Regain control over your finances instead of letting your finances and other people control you.
Budgets don’t have to be restricting. In fact, you’ll undoubtedly find that your budget allows you to do more of the fun things you want to do.
Get angry at your debt, not your situation
So often, people pity themselves and make them out to be the victim of their financial situation. No matter what excuse they might give, the truth is that they made some poor financial decisions.
So maybe you made some mistakes and aren’t in the best place financially. Instead of worrying about that, shift your focus to plan how to get out of debt. Get angry at your debt, and pay it off as rapidly as possible.
When you’re focused on others’ financial situations, you never stop to confront your own. Be honest with yourself about where you are and where you want to be. The motivation there should be all-consuming.
When I think about my student loans, it gets me so motivated that I truthfully don’t care to compare myself to others. Confronting your own situation is empowering.
The good news is that we all have so much power over our own finances, Budgeting gives us control over our current money. At the same time, we can focus on earning more money outside of our 9-5 job. Side hustles are a fantastic way to increase your income while keeping you occupied so you are less likely to compare your financial situation to others.
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Comparing your financial situation to others takes up so much time and energy that could be used to better your own finances. No matter where any of us are financially, there is always room for improvement, and that’s where all of our attention should be going.
Are you guilty of comparing your financial situation to others? What have you done to turn the attention from others to yourself and your own finances?
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Gratitude always helps me. Whenever I find myself counting my blessings that always helps the envy go away.
A little gratitude goes a long way!
Great advice! Comparing your finances to others is fruitless. I’ve gotten really good about not making these comparisons over the years. One of the first things I did that helped was to limit my exposure to social media (though I do still use it for my blog, I don’t use my personal accounts at all).
As we’ve paid off our debt and gotten more financially secure, I’ve found I don’t make the comparisons hardly at all anymore. Being averse to any more debt helps with this – when I see others’ buying new, bigger things, I just think if I had spent that much money how much longer I’d have to work on saving for retirement.
I’m right with you, Amanda. I found myself getting jealous about what other people bought and then I realized that I truly don’t even want the things they buy. I would rather pay off debt and then save. I’ll save up for my own fun purchases.
Solid advice Rachel. It can be really easy to fall into the trap of comparing yourself with others, but it can largely be a fruitless exercise. I think a key to remember is so many things are relative, not to mention that if you don’t know their exact situation (which is usually the case) that you’re not really in a place to compare. At the end of the day, I’d rather compare our specific situation against where we want to be, not against what I’m thinking others are doing.
Thanks, John! Comparison is a trap and it can be hard to break that thought process. You are right that everyone’s situation is so different and what we “think” they might earn, spend, or have in debt is probably completely wrong. So there’s no sense in comparing anyway.
Great advice Rachel! It is so easy to compare your financial situation to others – I know I used to do it so much. I would think – How does he/she afford that nice car? or house? How much do they make?
Then I realized that everyone’s situation is truly different and everyone’s priorities are different. I don’t value a shiny new car enough to pay a hefty monthly payment. I would rather work toward financial freedom!
Completely agree. I found myself getting jealous over those same things and realize that I really don’t want a house or a car right now, even if I could afford it. After paying off debt, I know I’ll be focusing on saving, not buying.
I used to compare myself to others but then I realized it was pointless because everyone has their own unique situation and you never know what is going on behind closed doors. Practicing gratitude is a big point as well and ever since I started doing that I never looked back.
Focusing on gratitude instead of comparison is a powerful thing! It’s not always easy but so worth the switch in thinking.
Great advice. As the cliche goes “Comparison is the thief of all joy”. It may be a cliche, but I absolutely think it’s true. For me, I like to look at people who are experiencing great success as a source of inspiration, instead of envy.
Thanks, Ashli! I love that saying “look at success as a source of inspiration, instead of envy.” When you change your thought process to that, powerful things happen!
Absolutely true and absolutely human, but everyone know his/her situation, but with real help of friends I can say that I became debt free and more conscious spender plus also if I am -and I will for the rest of my life- in a hate7love relation with budget I understood the importance of it….but I’m absolutely agree with the entire post, thanks for sharing!!!
I heard someone say that comparing your life to someone else’s facebook feed is like comparing their highlight reel with your blooper reel. Everyone (and I mean EVERYONE even mark zuckerberg and tony robbins) has problems and stresses they deal with every day. Focus on yourself and improving day by day.
Great reminder!
I’ve always appreciated taking inspiration, and learning, from others; however, early on in life I recognized that all relevant factors (e.g. age, goals, background, resources, etc.) are different for everyone and therefore, the journeys and destinations will necessarily be different.
This is a great distinction between absolute and relative. I think people are so accustomed to comparing themselves because it’s a relative factor which is why I think relative performance will always win out in absolute when judges are involved but certainly not when it’s an extremely personal and individual thing such as personal finance. Great post in detailing the importance of not caring about what others are doing!
I think one needs a particularly mature and confident mind to not compare themselves to others and it’s pretty difficult to attain that level of maturity along with confidence. But I like this idea – of focusing on your own race in life, because it’s the only race that actually matters. Thanks for sharing!
Awesome topic to point out for people Rachel. We all need to be reminded of this!
This-> “Budgets don’t have to be restricting. In fact, you’ll undoubtedly find that your budget allows you to do more of the fun things you want to do.” – is SO important and far too many people don’t understand. They avoid budgeting because they don’t want the restrictions. We coach them to understand that the amount of money you have is the actual restriction – the budget just helps you organize your priorities.
I used to do this when I would read the 401k reports from Fidelity and see that our balance was way above what other people were saving. But then I realized those people are not on the same path to FIRE as me, and so I stopped paying attention to those statistics. Now I simply try to set a goal and then measure my progress against it.
I’m definitely guilty of comparing myself to others financially. I think it’s just human nature. But ultimately as you said, you have to be grateful for the things in your life and not worry what others are doing. Definitely easier said than done of course
I find this a tricky one. There is petty comparison – based solely on competitiveness and jealousy – but there is also mindful comparison, as in “We both make the same amount, yet she never seems to go out to the pub Friday after work because she says she’s got other plans for her money. What is she doing that I’m not?” I actually wish I had done more mindful comparison when I was younger. Instead, I went with the flow, kept my head in the sand, and ended up in too much debt. Petty comparison? Not good for anything. Mindful comparison? I think it has the potential to help people learn to do better.