8 Reasons Comparing Yourself to Others Is THE Worst Financial Mistake

Stephanie Booth | Aug 30, 2016 Money

The biggest money mistake you can make has nothing to do with your credit cards -- instead, it's an emotional misstep you're probably making without even thinking about it.

We're all guilty of scrolling through Instagram and FB and wishing it was us taking a trip to Hawaii or buying that shiny new car. But when we focus on other people's finances rather than our own, our money habits suffer a as a result, explains Rachel Cruze, #1 New York Times best-selling author, personal finance expert, and author of Love Your Life, Not Theirs.

Click through to see how you can stop spending time and energy on this self-defeating habit and invest in yourself instead.

 

Image via iStockPhoto.com/DeanDrobot

  • Stop chasing make-believe

    1

    Our smartphones and social media apps are little windows into the lives of other people, says Cruze. "But when you get caught up in social media comparisons, you're comparing yourself to make-believe. And when you compare yourself to make-believe, your real life will never feel good enough."

    Translation? It's fine to scroll through your Insta feed, but stop it if it makes you feel somehow inferior. 

  • Remember: You're not your parents

    2

    "So many people graduate college, get married, start their careers, and immediately expect to be able to live the same kind of lifestyle as their parents. It's crazy!" Cruze says. "Comparing ourselves to our peers is bad enough, but comparing ourselves to people decades further along in their careers and wealth-building is just ridiculous."

  • Own your stuff

    3

    The road of comparisons always dead-ends at debt, Cruze warns. "There's nothing wrong with enjoying a little luxury as long as it makes sense in your world," she acknowledges, "but when you pile up a bunch of stuff and go neck-deep into debt to buy it all, you don't really own your stuff; it owns you."

    The way to avoid debt it is simple, Cruze adds: "If you can't afford it, don't buy it."

    More from CafeMom: How 5 Women Paid Off $10,000 or More in Debt

  • Find contentment

    4

    "Contentment isn't a place you get financially; it's a place you get emotionally and spiritually," Cruze notes. You instinctively know that what you have, no matter how much or how little, is enough. "Contentment is the inner determination to be happy and fulfilled wherever you are, with whatever you have."

  • Stop saying, "I deserve it!"

    5

    "Deserve" is a dangerous word -- "and it gets people into more trouble than they’d ever expect or admit," says Cruze. "The idea that the world owes you something is the root of why so many people live in a constant state of dissatisfaction and jealousy."

    Why not think of it this way instead? "The only things that you deserve to buy are what you plan for and pay cash for," says Cruze. "That's it."

  • Know what you value

    6

    You should have a clear idea of what's important to you in life. Don't allow other people to make this decision for you, advises Cruze. "Too many people ... just chase the life everyone else is chasing without ever stopping to ask what they want for themselves."

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  • Cheer on your friends

    7

    If someone shares great news with you, keep the focus on them instead of turning it back to yourself, Cruze suggests.

    "Find big ways to celebrate others' accomplishments. Don't feel like you're losing just because someone else is winning. Their success has nothing to do with you, so celebrate it sincerely while you keep working toward your own success."

  • Take back control of how you spend

    8

    EVERY dollar you spend is a reflection of your values. "Why on earth would we hand those decisions over to anyone else?" asks Cruze.

    "And yet that's exactly what we're doing when we indulge the comparisons. We're handing someone else the steering wheel, and we're taking a back seat in our own lives." Be mindful of each time you spend money, be it on flea medicine for your dog or a venti latte. These decisions are for you, so make 'em count.

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