I was talking with a friend a few months ago about money. Let’s call him Daryl.
Daryl and I were waxing philosophically about careers, incomes and the never-ending comparison battle that exists among friends and peers. He admitted to me that it wears on him constantly seeing other people’s big houses, big incomes, big vacations and big lives on display all the time.
Because of curated lives on social media, it’s never been easier to become bogged down in the thief of joy.
I was surprised to learn this because Daryl is one of the happiest people I know. He’s grounded and always in a good mood. Everyone loves the guy. If this well-adjusted person has trouble keeping up with the Joneses, what chance do the rest of us have?
The problem is that happiness is almost always a relative emotion. You don’t judge yourself based on how much better off you are than people were in the past. You don’t look at how far you’ve come personally. You don’t benchmark against people who are worse off than you are financially.
You compare yourself to people who are doing better than you are.
My favorite example of this mindset is a research report from the Federal Reserve that looked into the financial habits of Canadians whose neighbors won the lottery.
The neighbors of people who struck it rich were more likely to increase their spending, take on more debt, put more money into speculative investments, and eventually file for bankruptcy. And the larger the winnings, the more likely that others in that neighborhood would go bankrupt.
Seeing someone else with a lot of money makes it difficult to stay in your lane.
But it’s not like this behavior makes you any happier.
In his book, The Soul of Wealth, Daniel Crosby has an entire chapter on the idea of keeping up with the Joneses. Here’s an excerpt:
The phrase is a reminder that it’s in our flawed nature to compare ourselves to others, particularly people we see and interact with every day. Money insecurity leads us to compete and not appreciate what we have. Also true, though, is that the research shows one thing for certain: The Joneses aren’t very happy.
An examination of 259 different independent samples found that materialism was “associated with significantly lower well-being” and was a poor way of meeting psychological needs. The researchers’ findings suggest that this association holds across different demographics, participants, and cultural factors. Another meta-analysis of 92 studies found that those pursuing goals of growth, community, giving, and health experienced significantly higher levels of well-being than those pursuing the Jones-y goals of wealth, fame, or beauty.
You’ll never be content trying to keep up with the Joneses because there is an endless supply of them to keep up with. There are always people spending more money, taking nicer trips, buying bigger houses and making more money than you are.
At a certain point you have to accept this fact.
There was another classic psychological study that compared lottery winners with people who were paralyzed in an accident.
Surprisingly, the lottery winners weren’t significantly happier than the average person and actually reported less enjoyment from everyday experiences. The big win seemed to raise their expectations, which made small daily pleasures feel less satisfying.
In contrast, many accident victims rated themselves as moderately happy, despite their life-altering injuries. While thinking about their past lives sometimes made them feel worse, they still found deep meaning and enjoyment in ordinary things because they appreciated them more.
After major life changes, people adjust their expectations. Lottery winners adjusted upward and felt less satisfied. Accident victims adjusted downward and found more value in the little things.
It’s expectations all the way down.
Finding contentment is probably a better goal than finding happiness.
It starts by being grateful for what you have.
Michael and I talked to Daniel on Animal Spirits recently about keeping up with the Joneses and all sorts of other money thoughts:
Further Reading:
The Upside of Gratitude