Last Thursday, two personal finance bloggers addressed the issue of wealth and how we should act if we’re wealthy. Debt Ninja asked why people are ashamed to admit that they’re doing well but are ok with telling people they’re doing badly and Me In Millions asked whether we find ourselves pretending to be less well off in order to avoid having financial expectations dumped on us.
Well, I’m not nearly in that place yet. I don’t have to worry about what people will think of me if they find out I’m rich and I don’t have to pretend to be any less well off, because we’re not rich and we’re paying down massive debt.
Why It’s Less Embarrassing to Share Failures Than Successes
So, I’ll start with my thoughts on why people are less ashamed to tell people they’re doing badly financially than that they’re doing ok. I think that, to a degree, it’s an issue of pack dominance/social relations. The reason it’s so hard to share successes is that it can be interpreted as a way of saying “I’m doing better than you are.” And while that may not come loaded, it can be seen to imply “I’m a better person” or “I’m smarter” or any other number of value judgments about both parties.
Now, Debt Ninja and Micah would both say “maybe that’s true.” And maybe it is, but it’s not polite (and normally not kind) to tell people outright that you’re better than they are. Talking about how well you’re doing isn’t quite at that level, but it’s close enough that most people stay away from that too.
On the other hand, to say “Our finances aren’t in great shape” or “We’re trying to get out of debt” is to make oneself vulnerable. You open yourself up for criticism or unsolicited advice and for the person to feel better about their own finances—whether they’re better or worse. You show a weakness and a failing. I’ve read several urban fantasy novels lately and it makes me think of werewolves proffering their unguarded necks symbolically to a more alpha wolf. It makes you the vulnerable party.
Either it’s a compliment to the other person if they’re doing better or it’s an admission that you’re not doing any better than the other person (if they’ve just opened up to you or you know about their financial situation).
There are some people that you don’t want to share your short-comings with. Those are generally the same people who talk a lot about how well they’re doing.
What if You Are Successful?
If you’re successful, you walk a delicate balance. On the one hand, if you’re doing well then you shouldn’t be ashamed of it. You’ve probably put time and effort into it. Maybe you’ve caught a few breaks too, but that’s nothing for others to be bitter about or for you to be ashamed of.
On the other hand, as I said above, saying that you’re doing great when someone else is doing badly may come off as an assertion that you’re better. Also, as Me in Millions and some of her commenters pointed out, people are likely to expect you to behave differently when you’re rich than when you’re poor.
All I have to tell people is that we’re grad students. It shuts down Kennedy Center subscription solicitations (we go thanks to gifts from lovely relatives) and people who already know us don’t have very high expectations about things like going out to dinner (though we have people over), etc. I don’t even have to mention the debt, just say that we can’t afford it and that’s accepted. The first year of marriage, we opted-out of giving/receiving Christmas gifts because we just didn’t have the money.
But if people know you can afford it, then they may see you as cheap or stingy for choosing not to.
So What’s the Answer?
In the future, I plan to be solidly on my financial feet and moving in a good direction. I hope that, as a rule, the question will never come up and if I choose to say “We can’t afford that right now” (meaning, it’s not in our spending/saving plan), people will accept it at face value the way they do now.
As I see it, even if you have the money, the question of whether you can afford it is more of a question of whether it’s in your plan for your money. If you’ve got fun money set aside and haven’t already spent/planned it, then you can afford it. But even if your money’s “only” going into a savings account, it doesn’t mean the money can just be spent on a vacation, new gadget, dining out every night, etc.
You can’t afford it because the money’s already going to your financial goals, just like it is when you’re getting out of debt. If you need to, you can phrase it to include the goal “We can’t afford it because we’re saving for a house,” or “because we need to save for the kids’ college” or “because we’re behind in saving for retirement.” Sure, some people will argue with that, but most will leave it be. When I was a teen, I used “I’m saving for a violin” and “for a trip to Europe” as reasons not to do some things.
I don’t want advocate being so cheap that you cost others money or being that person in the bar who never buys a round but is happy to accept rounds from others. If you’re going to spend that little, then cultivate friends who do the same, rather than mooching off others.
Learn to give things that don’t cost money or have friends over and cook them a good meal for much less than it’d cost for just you in a restaurant. And do spend your money on others, especially when it’s not short-changing your goals. There’s nothing wrong with giving an expensive wedding present to a couple you care about. The beauty of money is that you can use it to make your life and others’ lives better. We started giving Christmas gifts again because we were in a better position and it made us happy to give.
What do you think? Why is it easier to say “I can’t afford it” than “I’m not going to spend my money on it”? Have you run into pressure because your finances are in order, or are you in my boat right now?