Your friends are flying across the country for the ultimate New Year’s getaway. Your Facebook and Instagram feeds are full of lavish gifts, new cars and perfectly decorated homes. You find yourself wondering, “How can they afford this? And why can’t I?”
It’s easy to give in to the pressure to go along, post along and purchase along with those around you — especially around the holidays, when one-third of Americans say they spend the most, according to the Chase Slate 2017 Credit Outlook Survey. Fear of missing out, or FOMO, is a documented phenomenon that has young adults making constant comparisons between their lives and others — and drives them to spend more money on things than they can afford. Here are four reasons why that’s the wrong way to achieve your financial goals.
Living paycheck to paycheck isn’t fun. But for many people, it’s a temporary phase while becoming financially mature. Giving in to splurges to keep up with your friends only extends that period of time. If your goal is to get ahead, don’t rush. Living frugally will allow you to set money aside and grow financially while weathering the unexpected–especially important advice, as research shows that almost 40 percent of U.S. households will make an extraordinary payment (think: medical services, auto repair or a tax bill) of over $1,500 in a given year.
Sure, those perpetual vacation selfies project the perfect image of financial success, but you have no idea how your friend is making it work. The people you’re hoping to emulate could be uncomfortable with their own financial situations, or even deeply in debt. While eight in 10 Americans are at least somewhat satisfied with their credit score, most (55 percent) see room for improvement, according to the Chase Slate 2017 Credit Outlook Survey. So don’t overextend yourself financially to keep up with others.
Your friend’s budget may allow for two new pairs of shoes and three fancy Sunday brunches a month, because those things are important to her. You may make the same salary, but have a goal of paying off your student loan in three years or saving for a down payment on a house. Your goals don’t have to be the same as your friend’s. Join her for one brunch a month, keep it to a single mimosa, and you’ll be celebrating your own financial victories in no time.
You want to live big like your friends in a high-paying sector, so you get a job just like theirs. You may be making the money you desire, but if your heart was set on being a teacher, will you ever be happy? Or perhaps your dream is to become a lawyer, but you don’t want to trade your weekend trips with friends for tuition bills and all-night study sessions. The ability to buy and do the same things as your friends rarely brings the same satisfaction as following your own goals and priorities. In fact, having a career that is meaningful to you can improve personal empowerment and fulfillment, and decreases stress. Make your own decisions, and you’ll find your own happiness.
When you compare your life and finances to others, you’re letting their goals, priorities — and even their mistakes — become your own. Focus on your own aspirations and the right financial decisions will be easier and much more satisfying.