Comparing ourselves to others is a natural tendency that we all experience at some point in our lives. Whether it is in the realm of academics, career, relationships, or financial status, we often seek out reference points to gauge our own abilities and achievements. While social comparison can serve useful purposes, it can also lead to harmful behaviours if not approached in a healthy manner.
Here are the reasons why we compare ourselves to others, how it influences our behaviour with money, and ways to avoid the pressure to “keep up with the Joneses”:
Why do we compare ourselves to others?
Social comparison is motivated by a variety of factors, including social norms, self-esteem, and social identity. We compare ourselves to others to gauge our own abilities and achievements, form social bonds and establish our own identity and strive for self-improvement. While social comparison can be useful in providing us with information about ourselves and our position relative to others, it can also be harmful if we engage in it excessively or in unhealthy ways.
How does social comparison influence our behaviour with money?
Social comparison can have a significant impact on our behaviour with money. It can lead us to overspend, undersave, make poor investment decisions, and manage debt irresponsibly. When we compare ourselves to others who are more affluent, we may feel pressure to keep up with our spending habits, leading to financial stress and debt. On the other hand, when we compare ourselves to those who are financially stable or have achieved greater financial success, we may be motivated to save more and invest in assets. Social comparison can also influence our investment decisions, as we may feel pressure to invest in similar opportunities to our peers, even if they are not in our best interests.
Is there any way to avoid the pressure to ‘keep up with the Joneses?’
There are several ways to avoid the pressure to “keep up with the Joneses” and make financial decisions that align with our goals and values:
- We can set our own financial goals based on what is important to us, rather than comparing ourselves to others. This could include saving for retirement, paying off debt, or building an emergency fund. Having clear goals can help us stay focused on our own priorities, rather than feeling pressure to keep up with others.
- We can create a budget to manage our money and avoid overspending. By identifying where our money is going and making adjustments as needed to align with our financial goals, we can stay on track towards achieving financial security.
- We can limit our exposure to social media, which can be a breeding ground for comparison. By unfollowing accounts that make us feel like we need to keep up with others, we can reduce the pressure to overspend and focus on our own priorities.
- We can focus on experiences over possessions, prioritising activities that bring us joy and fulfilment rather than material possessions. This could include travel, spending time with loved ones, or pursuing hobbies.
Lastly, we can cultivate a sense of gratitude for what we already have, rather than constantly striving for more. Focusing on what we are thankful for can help us feel more content with our lives and have less pressure to keep up with others.
Social comparison is a natural tendency that we all experience, but it can have a significant impact on our behaviour with money. By understanding why we compare ourselves to others and how it influences our financial decisions, we can take steps to avoid the pressure to “keep up with the Joneses” and make financial decisions that align with our goals and values. Whether it is setting our own financial goals, creating a budget that works for us, or avoiding unnecessary purchases, it is essential to develop a healthy relationship with money that isn’t based on comparison with others.
Dennis Relojo-Howell is the managing director of Psychreg.