Should You Compare Your Money Situation to Other People?
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Theodore Roosevelt famously said “Comparison is the thief of joy.” So, should you compare your money to other people’s? Is it wise?
Most of us know what it’s like to compare yourself to others and not quite measure up. We all know what it feels like to see friends on social media seemingly living their best lives. We don’t have to look hard to see a couple or a family who seems happier or more content than we are.
For those reasons, many experts and psychologists warn against comparing ourselves to others. In fact, a recent study published in the Journal of Social and Clinical Psychology revealed “an association between time spent on Facebook and depressive symptoms for both genders.”
I’ve experienced this, particularly when it comes to comparing myself to other entrepreneurs. It can be tough. However, I also see a lot of value in comparison. I believe it’s a mindset issue. You can either let a comparison make you feel worse or you can let it push you to be better.
Why You Should Compare Your money situation to others
I acknowledge that the link between social media use and depression is alarming. However, as stated, I don’t think comparing your money to someone else is always a bad thing.
In fact, when you compare your finances to others, you get a sense if you’re ahead or behind your peers. This is important so you know if you’re on the right track with your money. The key is to make sure you’re making a true comparison.
You can’t compare your life with the burden of student loan debt to someone else’s Instagram highlighting their world travels. We never really know someone’s actual financial situation unless they tell us. And even then, they might not be telling the truth.
So, oftentimes, the comparisons aren’t fair. That’s because social media is only a sliver of someone’s life. It’s just the best parts.
But what if you could really compare apples to apples without the sheen of an Instagram filter? What if you could see people’s financial numbers anonymously so you know if they’re telling the truth?
Then and only then would you know where you truly stand with your money in comparison to your peers.
There’s actually an interesting new tool that will help you do this called Status Money, an app created by two data scientists.
Status Money lets you anonymously compare your finances to your peers, the national average, and custom groups you create. You can compare things like how much you spend on groceries, debt levels, interest rates on loans, investments, credit scores, and more.
By comparing your information to others, you can see where you stand financially compared to your peers. You can do this across a broad group, or focus it even more by creating custom groups.
In less than three minutes you can anonymously compare yourself to others and see if you need to make any changes.
If you use Status Money, go into it with an open mind. Understand before opening the app that you could be disappointed to learn where you stand, financially, compared to your peers. However, even if this happens, let the information you garner from the app motivate you to improve.
For example, if you learn you’re behind on retirement savings, sit down and make a plan to boost your savings. You might find that your credit score is lower than your peers. If that’s true, do research and find a way to improve it.
Or if you spend more on groceries than your peers, look for a grocery store that’s less expensive. You can even explore ways to get coupons or use a grocery rebate app like Ibotta to get cash back.
On the other hand, if you find that you’re more financially stable than people your age, you know that you’re on the right track. You can feel confident in the financial decisions you’ve made thus far, and you can rest easy knowing you’re on your way to financial freedom.
More Information Helps You Learn
It seems scary to compare your money situation to others. But getting true, hard data can help you be better and more responsible with your money. Which is the ultimate goal – improving our financial standing.
It’s easy to look at social media and think others have it all. Remember, social media often highlights the best parts of someone’s life. When you strip away what’s highlighted on social media and compare your money, you get information that will help you improve your finances now and in the future.
Do you fall into the comparison trap often? How often do you talk to friends or family about debt, saving money, and investing? What’s are some other reasons it’s important to compare your finances to others?
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