Keeping up with the Joneses has always been expensive, but the problem is way worse now that the internet has made us all neighbors.
Nearly two-thirds of Americans say they can't fathom how their peers afford the fancy vacations and cars they're posting about online, a survey from Mint found, and more than a third admit they're overspending to keep pace.
As the saying goes, comparison is the thief of joy. But Brent Weiss, co-founder of the financial advisory firm Facet Wealth, says the real mistake isn't comparing yourself to others — it's trusting what you see on social media in the first place.
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Looking through a filter
Weiss says it’s easy to forget that TikTok and Instagram never tell the whole story.
“If we hop on to social media, there’s this different life that’s not reality presented to us… Everyone’s having a $50,000 wedding; everyone’s buying a big grand home,” says Weiss.
“But the reality of it is a lot of people are making very smart, informed decisions. It doesn’t mean they’re not having nice weddings, but they’re balancing that with the rest of their life.”
People don’t normally post online about their sacrifices or their smart investing habits. And they certainly won't post about their bad decisions, like how much debt they're taking on to cover their lifestyle.
A distorted image of your friends’ finances can be especially dangerous when you’re on the verge of a huge, emotional decision, like buying your first home.
“We tend to make very bad decisions as human beings. It doesn’t make us bad people — we just make bad decisions the bigger the decision is,” says Weiss.
“If you’re experiencing a high level of emotion or stress, it’s actually proven that we’ll make worse decisions.”
What’s the antidote?
Weiss says the real problem people have isn’t poor planning — it’s not having a plan at all.
“One of the biggest mistakes we all make is we don’t set proper goals,” says Weiss. “And I say all of us because although I’m a financial planner, I still make mistakes.”
So what does a proper goal look like? The certified financial planner says to ask yourself three questions: what is it, how much is it and when do I need it?
“Then you can sit down and say, ‘Here’s how much we would need to save for the ideal situation,’ and then you can look at how this impacts the rest of your life,” says Weiss.
“Part of my job is to show you all your options and help you understand what trade-offs might need to be made down the road to help you achieve your goals.”
As for social media, Weiss advocates an “antisocial” policy when it comes to any financial decision. Turn off your phone, stop thinking about what others are doing and focus on your own values and goals.
Emotions are inevitable when you’re planning a wedding or buying a home, but falling back on the plan you’ve created with your financial adviser — or simply having a plan at all — can help cut through the fog.
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