Skip to main content

Is everybody else richer than you?


Our neighbours are going on a vacation again…

OMG! How many times he changes his mobile phone…

What! She bought a new car…


I am feeling stuck

You open your Facebook account and see most of your friends enjoying, having fun time, going on long trips, showing off their newly bought car as if it is just a toy car. In the end, you log out from Facebook wondering what on earth are you doing? How do they get to spend so much of their money while you are entrapped in this vicious saving cycle – saving for your Retirement, saving for your child’s education, paying EMI for that Home loan of yours, etc. etc.

What we forget to understand is that there are sides of people’s life which we can’t see. We are only seeing the happy parts – thanks to Social Media. We don’t see the hardships people undergo to possess what they have, or worst their wrong money decisions and its impact on their life in the long run. 

PEER PRESSURE
Peer pressure is the direct influence on people by the peers (people who are part of the same social group). If someone has bought a new car, we need it too. If they are going to a foreign land for vacation, we also should go. This ‘WE TOO’ attitude makes us spend more money than the required as we tend to get influenced by this peer pressure of doing the same things or have same experiences as our peer group in order to feel good.

DISPLAY OF WEALTH
Who doesn’t want to show off? Conspicuous Consumption is the purchase of goods and services for the specific purpose of displaying one’s wealth especially if the goods and services publicly displayed are too expensive for other members in the person’s class (SOURCE: Investopedia). Such behaviour can lead to wrong money decisions and spending money on the things that won’t matter in the long run. Though comparing yourself with the others might lead you towards economic success, but not for all. Some people get succumbed to wasting money on things which are not important.

THIS IS ONLY ONE SIDE OF THE STORY
What we see in others lives is the part that they want to show. You will never know how many hours they work to achieve what they have achieved or if they are actually content in the life they are leading. We only see where they are spending more, we never consider the things where they could be spending less. Expenditure that is more important for you might not be the same for them.


How you feel with regards to your money is actually more dependent on your behaviour rather than actual facts and figures. You might feel rich while seeing you bank balance or investment account and you might feel poor while checking your bills or liabilities.

Setting Financial goals helps in the decision-making process when it comes to mindless purchase. You check if this is the thing that you really need and if it will impact your savings towards your financial goal. You will definitely delay the purchase if it is putting your financial goal at the back burner.

At the end, it is your life and you need to decide if you wish to follow the other person or you wish to have some life goals of your own. When it comes to wealth, it is more about contentment rather than comparison.


Charu Hastir, CFPCM is founder of http://www.theriteplan.com/. Rite plan is an online financial planning portal created to achieve a single objective of providing easy and Do It Yourself Financial Planning to netizens. Rite Plan is wholly owned by Tikkun Olam Financial Planning Services LLP. Please visit: https://theriteplan.com/index.php?route=common/home/

Comments

Popular posts from this blog

What to do when Stock Markets suddenly go up?

“Far more money has been lost by investors preparing for corrections, or trying to anticipate corrections, than has been lost in corrections themselves.” – Peter Lynch

This May we have seen BSE SENSEX moving from the levels of 39,031 on 30th April to 37,090 on 13th May and then back again to 39,352 on 20th May. Such volatility in such a short period makes us doubt our investment decisions and questions our long-term plan of staying invested in the equities. This Market volatility has the power to change our investment strategies and at times even question it. Sometimes we think that we have missed a golden investment opportunity and on other times we assume that we have invested at a very bad time. At the very best it keeps us confused on our next steps.
John Maynard Keynes has rightly said that "Markets can remain irrational for longer than you can remain solvent." But how should we treat our investments when we come across such turbulent times and what is the right course…

5 ways to trick yourself into Saving Money

Saving money has always been a daunting task and most of us fail miserably at it. One can relate more to this after seeing the average savings contribution. Lavish vacation or a fancy car can always distract us from our long-term goal of owning a home. It was easier in the earlier times when the life expectancy was lower and there was no need to plan for the long term. But now with increasing life expectancy and rise in the nuclear family culture, it has become more important for us to save for ourselves rather than depending on our Children or the Government.
When it comes to money management, it is indeed difficult to infuse the savings habit if we are a firm believer of You Live Only Once ideology. Nevertheless, savings is important even if your mind stays more on spending rather than putting the money away for your goals. But as they say there is a solution to every problem. All you have to do is to trick your mind into savings. Here are a few tricks to nudge yourself towards th…

Before you hire a Financial Planner!

We all have access to financial advisors in the form of our parents, siblings, or some friend who keeps on reading financial blogs to help us out with our financial queries. Though this all sounds good but at some point, in our lives we do realize the importance of professional advice and tend to go searching for a Financial Planner. There are pressing questions in our mind like how much to save for our child’s education, will I run out of money in my retirement?
There is no doubt that a certified financial planner will help you chalk out your future in a better manner than any of your friends. But, the answer to these questions vary from individual to individual. Your family circumstances, lifestyle, income, expenses, etc. Though a financial planner is supposed to give advice in your best interests but sometimes you do get to meet people who are more concerned about their own interests rather than client’s and you end up owning the products you never needed. Yes, there are rules/re…