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Going Broke Chasing Other People’s Lives
The pressure to keep up with the Joneses can be intense. Feeling like you’re being judged based on your possessions and appearance can have a mental and financial impact.
Seeing a friend drive up in a brand-new car or pull out a designer handbag can leave you feeling inferior. The result is that we feel pressure to spend money on things we don’t need to impress people we may not even like.
How can we afford to keep up? We can’t.
Instead, we use credit cards and loans to bridge the gap between our incomes and spending.
The reality is we are going broke chasing other people’s lives. We’re sacrificing our financial well-being in the name of impressing others.
Unfortunately, the problem has only gotten worse with the internet and social media.
FOMO is an epidemic
The internet has created a new set of social challenges that no previous generation before 2000 has ever had to face. With the advent of the internet and social media, we’re trying to keep up with our neighbors plus all our “friends” worldwide.
The result is that social media has led to the Fear Of Missing Out (FOMO) becoming a worldwide epidemic, blurring the line between needs and wants like never before.
It is hard not to feel like you’re missing out when you see posts of everyone else’s amazing vacations. It can be frustrating when all your friends are heading off to some faraway school while you are at home going to a local college. And it can be even worse for parents when all their friends post about their kids attending “elite” schools.
It can make you feel like you’re doing something wrong when you see people living such perfect lives. We do not want to be seen as failures. So we do what everyone else does: spend money we don’t have to project a perfect life that does not exist.
Let’s be honest: if someone is concerned about what you wear or drive, do you want to hang out with them? Do you want to be friends with someone who looks down on you just because you didn’t go to the “right” college or didn’t go to college at all?
It is time to end the rat race, and there is only one way.
The Top Money Secret
Stop caring about what others think of you.
A large part of achieving financial freedom requires you to disregard other people’s opinions.
This does not mean you should act selfishly and mistreat others to make a dollar. Instead, this money secret boils down to the timeless principle of not judging a book by its cover. It is about letting go of our superficial way of thinking and treating others as we would like to be treated.
Ultimately, it’s about not letting superficial opinions influence your actions, causing you to spend money you do not have. Remember, spending less than you make and saving the difference is the only way to build wealth. There is no way around it.
Spending money on things that don’t align with your values for appearances is a recipe for financial disaster.
As Morgan Housel stated in “The Psychology of Money,”: “Spending money to show people how much money you have is the fastest way to have less money.”
I will take it a step further and say going into debt to show off wealth you don’t have is the fastest way to go broke.
Now is the time to break the cycle and stop caring about what people think of you.
It is time to reimagine our vision of wealth.
Many people think wealthy individuals crave attention and validation. But the truth is, most successful individuals live a low-profile life and don’t care about what others think. So, don’t be fooled by the flashy displays of materialism often associated with wealth – the truly wealthy are often hiding in plain sight.
hiding in plain sight
If you ask someone what a millionaire looks like, they might describe someone who drives fancy cars, lives in a big house, and wears luxurious clothes. The word “millionaire” brings images of celebrities and superstar athletes to mind. However, the reality is that most millionaires do not fit this stereotype.
In his groundbreaking book, “The Millionaire Next Door: The Surprising Secrets of America’s Wealthy,” Thomas J. Stanely debunks the myths many of us have of millionaires. Through his research, Stanely discovered that most millionaires live modest lives and build wealth slowly by living below their means.
“The Millionaire Next Door” reveals that most millionaires don’t seek to impress others and prefer to avoid attention. They drive older vehicles, live ordinary lives, and are our neighbors. They prioritize saving and investing over consuming and spending.
I guarantee the millionaires in Thomas J. Stanely’s book don’t care what you think when you see them picking up their kids from a public school while driving a 10-year-old car and wearing a stained t-shirt.
In short, they do not value looking rich and impressing others.
How is that possible? Aren’t millionaires supposed to be flashy and drive bright red sports cars?
This is what many people believe. The idea that expensive items equate to wealth is a misconception. It leads us to idolize rich, broke people. However, wealth is not what you see. It is what you don’t see.
But the truth is that wealth is what you don’t see. Wealth is the nice cars not purchased. The diamonds not bought. The watches not worn, the clothes forgone and the first-class upgrade declined. Wealth is financial assets that haven’t yet been converted into the stuff you see.
Morgan Housel, The Psychology of Money: Timeless lessons on wealth, greed, and happiness
Ordinary is Extraordinary
It can be difficult to stop caring about other people’s superficial opinions. It is easier said than done. However, I have been able to do just that. And if I can do it, anyone can do it.
I am as ordinary as you get. Average is my middle name. I am of average height, intelligence, and stature. When people refer to the regression toward the mean, I am the “mean.”
However, I am good at saving money. People call me a cheapskate, but they have it all wrong. Instead, I have an uncanny ability to tune out the noise. Make no mistake; I do spend money, but it is based on my values and my terms.
There is no doubt it takes a certain level of self-confidence and the ability to “own who you are.” You have to stand firm and not be embarrassed into spending money.
Every person has the power within them to not give a hoot about what anyone thinks of the car they drive, the house they live in, or the clothes they wear. It is a waste of our energy and money. So, let them laugh at us behind our backs or think we are “low-class.” Who cares? They are the ones that have it all backward. They confuse materialism with wealth.
Let me share a piece of my story, and you will see the power of adhering to your values and tuning out the noise.
The power of not caring = more money
I graduated college in the earth sciences and moved up to Boston to start my first “real” job. In case you do not know, the environmental field is not known for its sky-high salaries. Warning: do not enter this profession if your goal is to make a ton of money fast.
I could have given in to peer pressure and taken out a loan to buy a new car like many recent graduates do. Additionally, I could have spent more money on a fancy apartment in Boston. People would have been impressed, but I would have ended up in debt, barely making ends meet.
Instead, I kept my old manual 5-speed pickup truck that did not have power steering or a matching tailgate. Then, I rented a room in a cheap apartment across the Charles River, living with three total strangers. The price was $400/month.
Instead of splurging on a TV and furnishings, I bought a $119 TV and used the box it came in as a TV stand. Since I worked so much, I did not need cable. Good old rabbit ears worked just fine.
That was not the end of it. I ate peanut butter and jelly sandwiches almost every day for lunch (and would do so for nearly ten years straight). Needless to say, I spent less than $50 a week on groceries.
My lifestyle gave people endless laughs. I was the butt of many jokes. I could have let everyone’s opinions impact my spending, but I didn’t care. The joke was on them.
The last laugh
What resulted from not trying to impress people and living below my means?
In my first year after college, while living on my own in one of the country’s most expensive cities, I saved over 25% of my income. How many people can say the same after their first year of college while earning a modest income?
That is the power of not caring about what other people think. That is the power of freeing yourself from superficial wants and needs.
After experiencing success, I learned to value my emotional and financial independence more than the opinions of others. I vowed never to let society’s expectations dictate my purchases. Above all else, I no longer felt the urge to impress anyone with my material possessions.
Once I had this epiphany, I never looked back.
Money Actions you can take
So, what steps can you take to stop caring about what other people think and start saving money?
The solution is simple but challenging, as peer pressure is powerful: You must STOP!
Putting a value on your spending
The key to stopping the madness is to align your spending with what you truly value. In the book “You Money or Your Life,” Vikki Robin proposes an excellent way to do just that.
In her book, Vikki Robbin suggests reviewing your spending in detail and assigning a self-assessed value to each line item. To do this, break down and categorize your monthly expenses. You can use any method, like a spreadsheet or paper.
For example, groceries may fall under the food category, and your new shirt under the clothing category. It’s not the categories that matter as much as the level of detail you have for each purchase. Include small expenses such as your daily coffee from the coffee shop.
Next, add three columns to the right of your expenditure, each representing the following questions:
*Life energy refers to your allotment of time on earth. It is the hours of your life.
Next, for each of your expenses, answer the three questions above. Use a plus sign (+) if you agree with the question. Use a negative sign (-) if you disagree or a zero (0) if neutral.
Here is a simple example of what your chart might look like:
| Expense | Category | Q1 Fulfillment? | Q2 Align with values? | Q3 Financially Independent? |
|---|---|---|---|---|
| Rent | Housing | Neutral (0) | Neutral (0) | Negative(-) |
| Weekend in New York City | Travel | Plus (+) | Plus (+) | Plus (+) |
| Work Lunch at Panera | Food | Neutral (0) | Neutral (0) | Negative (-) |
| Monthly Car Payment | Transportation | Negative (-) | Neutral (0) | Negative (-) |
| Roth IRA Contributions | Investment | Plus (+) | Plus (+) | Plus (+) |
discover what is important
Once you have completed this exercise, sit back and look at your spending with all the pluses, minuses, and zeros. Once you do, you will see what expenditures align with your values (the plus signs) and which ones do not (the negative signs). This will help you align your future purchases to your values and stop letting other people influence your spending.
In the above example, traveling and investing provide you with the most value and fulfillment, whereas your car delivers the least amount. In this scenario, paying rent is neutral. However, living in an expensive city might be negative and mean it is time to look for a cheaper place.
The purpose of this exercise is to discover your priorities when it comes to spending money. In doing so, you will stop spending money on things that do not align with your values, regardless of what others think.
The Top Money Secret, Putting it All Together
It’s natural to feel the urge to compare yourself to others, but it’s important to remember that everyone has their own unique journey. Learning to let go of caring about other people’s superficial opinions can be a liberating and empowering experience.
Instead of focusing on material possessions and appearance, prioritize your personal growth and happiness. This can help alleviate the pressure to keep up with others and lead to a more fulfilling life.
It’s a well-known fact that to save money, we must spend less than we earn. The key to achieving this goal is to ignore the pressure to conform to societal expectations and avoid trying to compete with our peers. By rejecting superficial opinions and resisting the urge to keep up with the Joneses, we can save more money and set ourselves up for financial success. In my opinion, this is the most important money-saving secret.
