Friends & Money

This article originally appeared in our monthly newsletter, Fiscal Therapy.
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In New York it’s impossible to ignore the huge spectrum of wealth and lifestyle choices. You can see this just about anywhere, but it’s amplified in a city: more people, more extremes. The urge to compare, covet, and judge can be quite strong. I think we should all strive to be content with what we have and where we’re at in life,  and a good starting point is realizing that when it comes to money, what’s right for you will differ from what’s right for those around you. People's' lives are complex, we all have different values and goals that lead us to spend and save our money in unique ways.

Most of us identify with either the “I have less” or “I have more” camp. However, it’s important to remember that you belong to both groups. Someone will always have more and someone will always have less than you. A vast majority of us live in the middle and identify most with the “I have less” camp.

To help combat the habit of comparison or judgement, here’s why I don’t think you should care or think much about how your wealth compares to those around you.

  1. Your goals and values are not the same. What matters most to you in life and your personal set of responsibilities should determine how you spend your money. Recognize that your friends and family have their own set of goals and values that determine what’s appropriate behavior with their money.

  2. You don’t have all the details. You might have an opinion that a friend way overspends on travel or you might be perplexed about the decision to buy a vacation home. How are they making that work? Don’t forget that you simply don’t have all the details. Here’s what I see behind the scenes that makes these sorts of purchase possible for people: family money, inheritance, favorable lawsuit settlement, thoughtful saving, credit card points, and most commonly, just plain living beyond their means.

Living beyond your means is a systemic problem in our society. That leads me to the conclusion that many of us spend way more time thinking about how others are spending their money, silently judging and often coveting, and too little time thinking about our own financial stewardship.

Here are two excellent articles to continue your thoughts on the topic of friends and money.


WHAT I’M READING: When Financial Talk Turns Personal

By Carl Richards, New York Times

This article dives deeper into the idea that you just don’t know what’s going on in someone else’s financial world. It also provides advice when it’s your finances and money decisions that become the focus of someone else’s attention. Spoiler: It’s not really about you.


WHAT I’M ALSO READING: 11 Money Etiquette Issues, Solved

By Teri Cettina, Real Simple

This brief article provides thoughtful and very practical advice about how to handle very common situations involving friends and money.