How to Stop Comparing Your Finances to Everyone Else’s

I recently read The Millionaire Next Door by Thomas J. Stanley and William D. Danko (which I highly recommend), and one of the biggest themes I walked away remembering was the concept of ignoring others. That’s not to say that being wealthy requires you to treat others unkindly. Rather, the process of true wealth requires you to quit comparing your finances, purchases, and achievements to those around you.

If you consistently find yourself jealously eyeing your neighbor’s new car or wishing you could make as much money as your older sibling, most financial gurus would agree that you’re holding yourself back. Not only is envy an ugly color for everyone, but it’s also a distraction that prevents you from making achievements of your own.

It’s impossible to totally ignore the success of others, but everyone should try to steer clear of coveting what others have. Not sure how you can possibly do that with others flaunting their good fortune in your face? Here a few tips.

1. Spend Less Time on Social Media

Although you might not think that Instagram, Twitter, Facebook, and other social media platforms have any bearing on your financial habits, they actually do. Every time you see a picture of some celebrity driving their brand-new car or a friend going on an expensive vacation, you’re asked to compare your finances to theirs.

Furthermore, social media actively encourages us to spend money and engage in compulsive buying. Your apps are constantly influencing your buying decisions, even if you don’t realize it.

According to The Next Millionaire Next Door , most millionaires spend 2.5 hours or so each week on their social media accounts. That seems drastically low when compared to the whopping 2.5 hours per day that most average users engage in. Perhaps their dedication to accumulating wealth discourages them from wasting time, or perhaps their ability to disengage from social media plays a role in their financial success.

2. If You Need to Compare, Look at Your Past Versus Your Present

Sometimes, comparison is necessary and healthy. For instance, it’s extremely smart to keep track of your finances so that you can see how far you’ve come in 10 or even 20 years. From now on, when you feel tempted to compare your success to that of others, consider comparing your current financial situation to your previous ones. Have you made progress? Where have you grown? Where can you continue to improve?

You’ll find that self-evaluation is much healthier and productive than envying those around you. Not only will it force you to better your finances, but it will also give you an appreciation for how far you’ve come over the past years.

3. Realize That Shiny Toys and Grand Lifestyles Don’t Equate to True Wealth

The average American household is at least $5,700 in debt. Together, all of the consumers in the country carry a staggering $1.003 trillion in credit card debt. Chances are, when you look at that friend who just bought a glittering new Mercedes, he didn’t pay for it in cash. Don’t assume that having the latest gadgets or the biggest house equates to a high net worth. For all you know, those people you envy are knee-deep in loans they’ll struggle to pay off for years.

What It All Boils Down To

Building wealth has nothing to do with the success of your neighbor or the failure of your coworkers. True wealth comes from dedication and self-control. Remind yourself of that when you start to covet the belongings and lifestyles of those around you. Reign yourself in and focus on your big goals, not what others have.

10 Ways to Nip Impulsive Spending in the Bud

Many Americans shop compulsively, which is probably why so many of us are looking for ways to curb our spending urges. You might have seen people stick their credit card in the freezer or leave their wallet at home when they go to the mall, just to avoid giving into the temptation of buying.

The problem with these techniques is that they don’t tackle the root of your impulsive spending problem: the way you’re thinking about shopping. If you think your spending issue is a short-term one, you can use 24Cash for a loan until your finances balance out.

Here are ten better ways to stop impulsive spending. The sooner you start implementing these techniques, the more control you’ll exert over your finances.

1. Don’t Quit Cold Turkey

As with any addiction, impulsive shopping is difficult to stop. Many people try to simply cut out the habit by taking away their access to money or promising not to buy anything for the rest of the month. However, studies have shown that “cold turkey” methods rarely work out for addicts.

Instead, focus on weaning yourself off of impulsive spending. Start by only allowing yourself to buy one thing on every shopping trip. Then, cut it down to one thing per week. Eventually, you’ll get to the point where you feel more in control of your buying habits. 

2. Make Yourself Wait

Don’t tell yourself that you can’t have that dress you spotted or those headphones you suddenly NEED. Instead, tell yourself that you must wait three days before you make the purchase. You’ll find that your desperation to buy the item may weaken over the waiting period. If it doesn’t, then you’ll be less likely to regret your purchase if you go back for it.

3. Beware the Traps of Social Media

Facebook, Instagram, Twitter, and all of your other favorite apps aren’t trying to help you save money. If anything, they’re begging you to pour more money into your favorite stores. Between the regular pop up ads for sales and the influencers who advertise products, your social media feeds are encouraging your bad spending habits. Consider limiting your time on these apps to decrease your urge to buy.

4. Tell Others About Your Goal

If you love shopping with friends, let them know that you’re trying to cut down on your impulsive buying. Everyone needs an accountability partner when they start changing their habits, and this case is no different. Ask them to remind you about your goals whenever you’re tempted to throw something in your cart.

5. Remember That a Sales Isn’t an Excuse to Buy

Just because something is 40 percent off doesn’t mean it’s something worth buying. Don’t let big sale signs or Black Friday throw you off track. Sales are especially dangerous because they encourage people to buy impulsively rather than intelligently, so beware.

6. Make a Shopping List and Stick to It

Like I said in the first part of this list, going cold turkey probably won’t work. To cut down on your spending without actually halting all your shopping, make a selective list of things you’re allowed to buy during the next month. This can include anything from new boots to dinner plates, as long as the items are things you truly need.

7. Find Activities to Replace Your Spending

Many times, people wind up shopping because they’re feeling antsy or stressed. Instead of relying on retail therapy, find other hobbies that benefit your life. For instance, next time you feel the urge to shop online, go for a run or learn to cook a new meal.

8. Set Goals and Look Ahead

One way to learn to love saving is to work towards a big goal. Maybe you want to travel to Bali next year, or perhaps you want to save up for a nicer car. Every time you start to buy something online or in a store, ask yourself if you would rather put that money towards your goal. Often, the answer will be yes.

9. Ask Yourself Questions Before You Buy

There are three big questions you should ask yourself before you buy anything: (1) Do I need it? (2) Do I love it? (3) Is it a good price? If the item you’re considering doesn’t earn a “yes” to at least two of these three questions, then it’s probably not worth spending your money on.

10. Give Yourself One Splurge Day Every Now and Then

Instead of spending little bits of money here and there throughout the month (that eventually add up), give yourself one shopping budget and spend it all in one splurge day. This will allow you to cleanse your mind of shopping urges, but you’ll also still be in control of how much you’re spending on non-necessities.

Learning to shop purposefully, rather than impulsively, is difficult for most American consumers. However, doing so will radically change the way you view money and your lifestyle in general. Start today so that you can have a more meaningful, financially-stable future.

5 Shopping Rules We Should All Live By

In America, shopping isn’t just a hobby; it’s a way of life. Many people maneuver their schedules around attending sales, organizing their many purchases, and browsing for their next must-have item.

This mentality around shopping is partially what led The United States to be the number one largest consumer market in the world. Although that’s not entirely a bad thing, it has contributed to the mounting credit card debt held by many families and individuals.

If you’re hoping to get your shopping under control so that you can become more financially responsible, here are five shopping rules you should always abide by.

1. Buy What You Actually Need

People who love shopping are excellent at convincing themselves that they need that new purchase they’re eyeing. However, more often than not, we don’t really need that new pair of black boots or an updated version of our favorite device. What we mean by “need” is that we really want the item.

The sooner you learn to differentiate between need and want, the better off your bank account will be. Plus, you’ll fill your house with fewer impulse purchases and more important items.

2. Learn to Tell When Something Is Truly a Good Price

Just because a product is discounted doesn’t mean it’s actually a great price. Sometimes, stores will even markup their prices significantly so that their sales seem more impressive than they really are Before you label any purchase as a great deal, pull out your cell phone and see if the prices online reflect that belief. In today’s day and age, you can often find a better price on Amazon or even eBay.

Additionally, don’t assume that buying something just because it’s discounted is smart. If you don’t really need or love the item, then it doesn’t matter how steep the discount is; it probably isn’t worth it.

3. Consider How Often You’ll Use the Purchase

You know you love that designer shirt on the hanger, but how often will you really wear something that fancy? Learning to recognize items that won’t be worth their price is a huge part of becoming a smart shopper. Personally, I like to equate prices with the potential number of uses to determine worth, especially when it comes to clothing. For instance, if I won’t wear a $30 shirt at least 30 times, then I put it back on the rack.

4. Distinguish Between Purposeful and Impulsive Shopping

Because so many of us view shopping as a hobby, the line between shopping for fun and for a reason often becomes blurred. You need to learn to recognize the signs of impulsive shopping in yourself. The more you spend without purpose, the more you’ll want to spend tomorrow and the day after. Think about your purchases carefully and avoid indulging just because you can.

5. Splurge on Things You Love, But Only Rarely

One thing people might be surprised to hear me say is that splurging is a good thing, but only on rare occasions. For example: I think that purchasing a $150 pair of sunglasses that will protect your eyes for many years is a better choice than spending $10 on three different pairs of cheap sunglasses. You might not agree, but the important thing is to recognize when you think splurging is worthwhile and when it isn’t. You can only splurge every few months or so, so make those expensive purchases count.

In today’s world of high-spending and countless shopping options, it’s easy to get swept up in a consumer-driven world. By following these five simple (but effective) shopping rules, you’ll shop more purposefully and prevent yourself from needlessly spending money. I’ve been following them for years, and they’ve made a world of difference in my financial and mental health.

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