You see this happen all the time. You are in a situation with other people and someone mentions his nice vacation plans. What is the first thing that pops into your head? Are you genuinely happy for him or do you automatically think about how much he’s spending (that includes jealous thoughts of the “he must be making more money than me” kind). You know what I mean.
But in the past few years, I have learned to stop comparing my financial situation with friends and family (I am getting better about this). I have come to realize that I am projecting my values and beliefs onto other people. What I think or believe about another person’s finances has no basis in reality. I am not in their shoes and don’t know what their situation is.
People spend money on things that are important to them. I know that some people may think I travel a lot. When one vacation ends, I am already planning the next. I personally always want to have a trip to look forward to. You might be thinking thoughts like “how can she afford it?” or “where does she get the money to travel?” You may even be envious. But you won’t know exactly how I make my little dreams come true because personal finances are just that – personal.
The other side of comparing your finances is the presumption that you are somehow morally better or worse than others. Grim tales of credit card debt are all over the news, often mixed with stories of foreclosure and homelessness. You may feel good about yourself because your debt is lower, but do you know why the person on the news has the debt? Was it really insane overspending, or was it a medical emergency or a layoff. Maybe the credit cards were used as a last resort to pay bills?
I have heard it said that “to compare is to despair.” This thought process of judging others is detrimental to you. You have no idea whether another household spends more money than they have, is in debt to their eyeballs, or has planned ahead to achieve their desires. You don’t know how much they earn or how much they give to charity. It is much easier to judge someone else than look inward at your own spending habits.
In the budgeting process, people track their daily expenses to see how much they spend and in what category. This can be a great exercise. Once you see where your money is going, you can make life-changing decisions. Where do you want to spend? What do you want to save for?
There are no right or wrong answers. There are only personal choices. Maybe you choose electronics over vacations. Maybe you choose decorating and entertaining over both. Maybe you choose to give your children spectacular holidays or birthdays over everything else. These are the kind of choices your neighbors, friends and family members made when they did something that impressed you and made you envious. They simply chose to spend their money in a different way than you.
So the next time you see someone order an expensive meal at a five star restaurant, purchasing the latest greatest electronics, or buying a designer outfit, don’t judge them. Not only is the thought process destructive, but it is a total waste of your time.