Once our basic needs are met, money does not increase happiness. Yet it’s hard not to compare our lives to those of our friends and colleagues. What do you do when you learn your friends make more money than you do?
Even When You Earn The Same
Soon after starting my first minimum-wage job out of high school, I noticed that even when we were earning the same amount of money, some of us were always broke while others always had money in our pockets.
I was literally on the ground picking up every cent I found. Friends who scoffed at the thought of change then turned around and asked me to borrow a dollar to buy a hot dog or play a video game.
When I moved up in the world and worked for law offices, I learned a secret. My high-powered, high-paid boss was actually broke. He spent every dollar that came in, and then some. For years my paychecks had to be cashed in person from the bank from which they were written (on the same day they were written) so the bank manager could override them. There were insufficient funds in the account to cover payroll. All while my boss was living the high life.
While he was brining in millions of dollars, he couldn’t pay a couple hundred in payroll. He was broke.
This was an important life lesson that I am glad I learned early on. Here I was the lowest paid person in the office. Yet I had no debt and plenty in savings while the boss couldn’t pay for his lunch.
It’s not how much you make, it’s how much you spend.
It’s All Relative
Nowadays when I learn that a friend earns more money than I do, I remind myself that in the USA we are within the top 2% of wealthiest people on this earth.
I am grateful that I have clean water, any food I desire, a sturdy home, indoor plumbing, and freedom of speech. When I start to compare myself to friends on which brand of cell phone or type of car we have, I take a step back to remember what’s really important.
What I do strive for is to have no debt. I have lots of friends who make more than I do, but are also struggling with crushing amounts of student loan debt, car notes, or mortgages. When this is taken into consideration, although I earn less my net worth is higher. And my stress level is lower!
Let’s say that you are the sole income earner for your family. You have young children and work a stressful job. Financial security is a priority to you. While trying to reach financial independence, you don’t travel and rarely dine out or attend events that cost money.
Yet you can’t help but compare yourself to friends and colleagues who seem to be living more exciting lives. But are they really better off?
Your co-worker Buffy earns the same amount of money as you do, but also has a husband who is employed at a well-paying job. They have no kids. Buffy is organizing a party for a colleague and suggests everyone make a donation that turns out to be more money than you spent on your kids’ birthday presents. You start to think that although you both have the same education and earn the same money, because she has a working spouse she is technically upper-class while your household income is middle class. But you also remind yourself that she doesn’t have children. And that it makes her feel good to do nice things for her friends.
Beautiful Breezey speaks multiple languages, travels to a different country each month for work, lives in an exciting city, has a hot boyfriend, and is well-liked. She comes from a well-off family and, although she earns less than you, she will never have to worry about having a roof over her head. From the outside she appears to have it all. Yet she is overworked, depressed, and miserable in her career and views her life as stressful rather than exciting. She has commented how she wished she had followed a path closer to yours.
Boss Biff makes $50,000 more a year than you. His wife also has a well-paying job and they have no dependents. To cope with having a stressful job, he makes his personal life as enjoyable as he can. He spends his time off going to concerts, dining out, and traveling. Yet he is overwhelmed at work and makes multiple trips down to the coffee shop each day to make it through. Despite earning more than his employees, you learn that he still worries about money.
Like you, Baynard has kids and is the sole earner for his family. He is also working toward financial independence. You and he enjoy sharing ideas about saving, encouraging each other on your path, and engaging in activities together that cost little or no money. You recently learned that Baynard is earning more money that you are. Yet instead of becoming envious, you decide to learn from his experiences. You recognize the hard work and dedication he puts forth, and see the value he adds to his organization.
I try not to compare myself to others because looks may be deceiving. They may earn more but also be in debt or unhappy. If they are winning with money, rather than being envious of them I think of what I can learn from their successes.
To me, the aim is not to make more money than my friends. My goal is to keep my life in perspective to the realities of most people in this world. By being grateful for what I have, I am less likely to want more (and won’t go into debt to get it).