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You're out to dinner with friends when everyone starts comparing notes on their travels to far-flung destinations. As your pals debate the virtues of Ibiza versus the Cote d'Azur, you fall into a funk, recalling your last "vacation"—a Greyhound bus ride to Detroit for your cousin's wedding. Your friend orders another round of $20 cocktails, and you mentally tally the bill, anxiously wondering what this evening will cost—and how you'll pay for it. Although you love your friends, you're also boiling with resentment of their affluence.
Such financial envy can damage your mental health, your relationships and your finances. Fortunately, you can tackle financial envy by figuring out why you're envious, setting financial priorities and working to change your own circumstances whenever possible.
What Is Financial Envy?
Financial envy is resentment of others who have (or appear to have) more money than you do. This discontentment can affect you at every life stage. In your 20s, you may envy friends who can spend hundreds of dollars on concert tickets or designer clothes without a second thought. In your 50s, you might feel jealous of peers who are purchasing vacation homes and traveling the world.
It can be difficult to let go of financial envy. Even as your income increases, there will always be someone who makes more money. But as the saying goes, "Envy is like drinking poison and waiting for the other person to die." Unchecked financial envy can negatively affect your mental health and relationships. Living above your means to keep up with friends can make it harder to build an emergency fund, save for retirement or even pay your bills. Fortunately, there are ways to put out the flames of financial envy.
Determine Why You're Envious
To get to the roots of your financial envy:
Identify the feelings that arise along with envy. Are you angry, feeling that life is unfair? Regretful about past life choices, such as pursuing a low-paying career? Left out, fearing friends will drop you if you can't afford the activities they enjoy? Anxious about reckless spending? Embarrassed that you can't afford what your friends can, so you overspend to feel better about yourself?
Instead of suppressing those emotions, listen to them for guidance. For example, anxiety is a warning that you can't continue charging nights out on your credit card. Regret might spur you to make some changes in your life.
Determine what you're jealous of. It's not necessarily money that you envy, but the things money can buy. Next time you feel jealousy arise, try to pinpoint what it is you really want. For example, you may long for a friend's financial security, glamorous lifestyle or ability to travel the globe on a whim.
Once you've got a handle on your feelings, you can take action to tackle your financial envy.
How to Turn Financial Envy Around
Here are things you can do to deal with financial envy.
Determine Priorities and Set Financial Goals
Your life priorities guide your spending and the financial tradeoffs you're willing to make—and everyone's are different. Your priority might be buying a house before you turn 30 or traveling the world for a year. Think about your short- and long-term life goals. Then identify the financial moves you'll have to make to make these dreams reality, such as contributing to a 401(k) plan or saving for a down payment on a house.
Develop a Realistic Budget
Once you've prioritized your financial goals, it's time to develop a budget. Whichever budgeting method you choose, be sure to track your spending (there are plenty of budgeting apps to help) and adjust the budget as needed. It's easier to stick with a budget if it's aligned with your priorities and allows a little flexibility for things you enjoy, whether that's concerts or dinners out. Creating a budget could even reveal ways to reduce your expenses, giving you more money to spend.
Set Spending Limits and Stick to Them
Before getting together with friends, decide how much you can spend and stick to it. Asking for separate checks at the beginning of a meal or using cash instead of a credit card at happy hour can help keep spending under control. Staying within your budget may mean opting out of some activities. Remember, you don't have to do everything your friends do to stay friends.
Find Ways to Get What You Envy
You don't necessarily need money to achieve your desires. For example, if you dream of seeing more plays and concerts, get a part-time or volunteer job as an usher. Is world travel outside your budget right now? You can travel for free by volunteering abroad or asking your employer about openings in overseas offices. If you envy friends' financial security, start building your own nest egg by contributing to your 401(k) plan and beginning to invest.
Reframe Your Thinking
Focusing on what you have, not what you don't, helps eliminate financial envy. When you're tempted to overspend or start to feel jealous, remind yourself of your long-term goals and recommit to your priorities. Remember, your relationships with your friends matter more than what you do together.
Take Charge of Planning
Look for low-cost ways to have fun with your friends. For example, invite them over for a potluck or movie night, go for a bike ride or hike, or get coffee together instead of going out to dinner. Taking control of planning activities from time to time helps you stay in control of your spending.
Find Ways to Make More Money
Ask your employer about career advancement opportunities that can lead to promotions. Research websites like Glassdoor and Salary.com to see if your pay is in line with similar jobs. If not, it could be time to ask for a raise or start looking for a new position. If your current career has limited future earning potential, perhaps you should consider a different occupation. You could also look for a side gig or find ways to make money from home.
Be Honest
Many of us feel uncomfortable talking about money, but silence allows resentment to fester. Explain your financial situation and you'll likely find your friends are supportive. Sharing your financial challenges and priorities can spark deep conversations about your values—and isn't that the point of being friends?
The Bottom Line
Regularly using credit cards for purchases you can't otherwise afford may help you feel like you're keeping up but can damage your credit. As your balances start to mount, you might struggle to make your minimum payments or pay other bills, and your credit score could suffer.
If your credit card balances have gotten out of hand, check to see if your credit report and credit score have been affected, and create a plan to pay off your debt. Poor decisions spurred by financial envy can have serious effects, but it's never too late to turn things around.