The Mandatory First Step in Creating a Personal Budget

Keitha McClure Odds & Ends

Social media has enabled people to ‘curate’ how people see their lives. Unfortunately, this means that our perception of ourselves compared to other people is more distorted than ever before.

We see a sugar-coated version of our friend’s activities as they choose to publicly display all the ‘highlights’ – vacations, a new car, a new kitchen.

We subconsciously make assumptions about these people, because we don’t have an accurate picture of their life. Your old high school friend Sally might be driving around in a Ferrari and earning $20k a month, but you don’t see that she’s been working until 3am every day for 5 years – if you knew the nitty gritty details, would you still envy that life?

People start putting pressure on themselves to then go out and spend money on holidays or cars or phone upgrades when they haven’t even considered one crucial thing – will all that spending make them happy?

Comparing yourself to others is detrimental to your happiness, and it costs you money. Don’t spend your money on cars, vacations, new televisions, clothes just because you want to “keep up with the Joneses.”

Forget what everyone else is doing, and focus on your core values. Focus on what you have and appreciate it. Don’t just compare yourself to people you perceive as “wealthier” than you; realize instead that you are actually more privileged than a lot of other people.

From here, you’ll be able to focus a lot more on what really matters to you, and we’re confident the majority of these will be things without price tags. By consciously decreasing the perceived necessity of luxury trips, items, and services, you’ll be well on your way to creating a personal finance plan that works for you.

This article was adapted from our eBook, 7 Habits to Transform Your Personal Finances. Want to learn more? Download your free copy here today!