I want to be like you!
Your financial wellbeing is as much as how you feel about money, as it is about the reality of your financial situation, such as the amount you earn, spend, borrow and save.
Numerous research studies have shown that the more we compare ourselves to other people, such as what we earn, spend and experience, the less content and happy we are with our own lives, and as a result this can reduce our financial wellbeing.
Social media amplifies this tendency to compare ourselves with other, because it provides a continual, but usually highly exaggerated and selective view of how other people live their lives.
The fact is there will always be someone who is more attractive, has more friends, goes on more (usually exotic) holidays, acquires more possessions, has more achievements and earns more money than you. That’s life!
In an ideal world you could improve your financial well-being by not comparing yourself to other people, but in the real world this can be easier said than done.
However, a recent study* has found some evidence that increased financial wellbeing can come from comparing yourself to a financial role model or mentor who is similar to(but not exactly the same as) you.
People who compared themselves with a financial role model reported increased positive emotions, regardless of whether the role model was more or less financially successful than themselves. Therefore, your financial role model could have money attributes and characteristics that you’d like to emulate or, alternatively, make you grateful for the fact that you are financially better off than them.
So who could be your financial role model, to whom you could compare yourself financially?
It might be an old school friend who doesn’t earn much but lives a happy and fulfilling life. It might be an ex colleague who has changed careers and is happier and more fulfilled as a result. Or perhaps it’s a friend who has turned around their personal finances by getting out of debt and building savings by taking more control of their spending.
You could take this a stage further and ask your mentor (or someone else) to be your money buddy, to whom you could be accountable for making positive changes to your financial habits and behaviour, which will further increase your financial wellbeing.
Being good with money doesn’t come easy to everyone, but with the right role model and money buddy, you might find it a whole lot easier.
Do let me know how you get on as I’d love to hear your financial wellbeing success story, to give inspiration and encouragement to other people like you.
* The Comparrison Trap: How Social Comparrisons Affect our Financial Wellbeing, Morningstar 2018