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 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. 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: