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?
Print Friendly
{ 5 trackbacks }
{ 25 comments }
We are in the same boat as you are right now. However, because of my degree and employer (and the fact that I just started a business on the side), people assume we are doing well. So, they don’t handle when we say “I can’t afford it” as well as they should.
However, I also find that saying “I’m not going to spend my money on that”, can open up the doors to discuss financial discipline and budgeting – sometimes it can lead to a new client!
.-= Khaleef @ KNS Financial´s last blog ..A Closer Look at Tithing Before the Law of Moses – Abraham’s Example – Does Abraham’s Tithe to Melchizedek Provide an Example for us Today? =-.
I’m on the side of the spectrum where I graduated from college without student loans, have a solid job, own a house, travel a lot and generally do well for being 23. However, a lot of people assume that my parents paid for my tuition, bought my house, and generally still slip me piles of cash to afford my hobbies.
The reality is that I worked several jobs through college, lived frugally, skipped spring break, and earned a couple of critical scholarships which allowed me to save up a 20% down payment to afford my house. In addition, I save over 40% of my gross salary to afford my splurges.
Yet, I receive condescending remarks from people when they find out I bought a house at 21. “Oh, your parents are generous.” Well, yes, they are. They helped me with DIY projects and are willing to lend me their power tools for the weekend. I have a neighbor who will hardly even look at me because of all the “entitlements” I have received.
It drives me crazy sometimes.
Thanks for the shout out! It’s a really interesting topic and I don’t think there’s a good answer. Until openly talking about money isn’t a taboo (which isn’t happening any time soon!), I think this is a delicate balance that we’ll all have to deal with.
.-= me in millions´s last blog ..April Spending =-.
I actually feel a little embarrassed when people ask me how the recession has been treating my freelance business, because it’s actually improved a lot over the last couple of years. We’re always willing to help people, but we haven’t been asked outright for money. When people ask how we’re doing financially, I try to tell them that we’re doing just fine. I try not to go into detail. As you say, it can be somewhat uncomfortable — especially in these economic times.
.-= Miranda´s last blog ..What is the Real Definition of Inflation? [INFOGRAPHIC] =-.
Very good post!
“Why it’s Less Embarrassing to Share Failures Than Successes”
My brother once told me that it’s better for other people to brag on your success than you doing it yourself. That is the best advice I received from him. I always felt that it’s a little tacky and arrogant to brag on yourself. You look better when other people brag on YOU.
Being successful can also make you feel lonely b/c no one else can relate to your accomplishments
@Melissa
I feel the same way I am older than you but I’m in the same boat. I bought my house at 31 and everyone could not believe it. I also went out on vacations. Just b/c they cannot do it doesn’t mean I should lower my successes.
People do things so backwards when it comes to money. Consuming, being broke and living paycheck to paycheck is so normal that it makes saving and building wealth looked at as being cheap.
.-= Moneymonk´s last blog ..Personal Finance is so “personal” no need to copy someone else success =-.
This week we bought a piano. I have been learning piano for a few months, and have had to trek to the inlaws EVERY DAY to practice. I haven’t missed a day and really feel good about the progress I have made. Learning piano has been on my big to-do list for ten years and it’s finally checked off. So I decided to buy one and have been saving/shopping for it.
We spent $1000 on a piano but we feel bad about it because come to find out, my sister in law is filing for bankruptcy, and my brother came to me asking for financial help (he asked for money but I wouldn’t give it to him because I knew he was unable to manage it which caused his problem, so I helped him learn to manage his money and advised him on what to do about his situation. It turned out good in the end. ).
We never spend on anything..our family teases us about it sometimes, saying we have to let loose and live, but we save so we can buy things that make our lives better like the piano.
We have been saving for the past couple years and are doing really well now but it feels awkward telling them how well we are doing because I know they don’t manage their money at all, they never take our advice and feel its better to spend now because they could die tomorrow.
sorry for my incoherent dribble..this topic is always on my mind and i have a lot of conflicting feelings about it. They are hard to articulate I guess.
.-= Jesse´s last blog ..Guest Post: Don’t Devalue Yourself =-.
Oh…it’s definitely easier to say “I can’t afford it” than to say “I won’t pay it.” The latter makes you look a cheapskate. On the other hand, the former is poor-mouthing, and after friends have heard it a few times, they mentally translate “can’t afford” to “won’t pay.”
I’m certainly guilty of poor-mouthing. “I can’t afford it” was my mantra for a while, a hangover from post-divorce Bag Lady Syndrome, until I began to realize it annoyed people. Now I try to keep my mouth shut and just hope no one notices I’m not reaching for my wallet.
In the what-about-successful people department, my ex- was a corporate lawyer with a prestigious Southwestern firm. Needless to say, he earned a good income. He would not even tell our son how much he earned! I wasn’t sure myself–had a kind of ballpark figure of about 10 grand a month, but didn’t really know. He would allow me to have exactly nothing to do with the family finances, and when I tried, he just brushed me off.
That’s extreme, of course. But I do know a lot of very successful people — some of them millionaires — who live modestly, eschew McMansions, and do not discuss their finances.
.-= Funny about Money´s last blog ..Police Presence and Property Values =-.
@Melissa
Sounds like I’m reading my diary 🙂 I’m 23 now. I got married at 19, have two kids now, bought my house at 20, have a pretty solid job and a very recent degree but it’s not like any of it was just handed to me.
The thing is, I’m not paid a ton. I don’t have any inheritance or anything like that. I just use what I have, and never stop. I don’t let up and every minute of every day is productive be it when I’m working, or when I’m at home. I do a ton of side work even when I was in school. I save every penny and put it towards the future.
It takes a lot of work to be prepared, successful, comfortable and those that aren’t willing to put in the extra effort shouldn’t make us feel bad about our success ..but it happens every day.
.-= Jesse´s last blog ..Guest Post: Don’t Devalue Yourself =-.
I think some have touched on it already, but I think it’s easier to talk about things when you’re doing poorly because it’s almost a sense of “we’re all in this together, we’re trying to do better” – it’s humility and showing people that you struggle with problems as well. When you talk about doing well, I think that’s fine – if done in the right way – however, if it comes across as bragging or as being prideful, I think people will take it the wrong way. So for me it comes down to the spirit in which information is shared. Is it shared with a sense of humility? Is it bragging?
.-= Money Smarts´s last blog ..Co-Signing For A Loan: Never A Good Idea Unless You Like Paying For Other People’s Stuff =-.
@Money Smarts
I agree, and it’s hard to know how others will take what you say as well. You can say something so simple as, “We finally saved up enough to buy this or that” and someone could take it as you bragging.
I think that’s why so many people just avoid that altogether because it is a fine line.
.-= Jesse´s last blog ..Guest Post: Don’t Devalue Yourself =-.
We’re by no means rich, but our financial house is in order (no outstanding loans/CC bills, except for a car loan at 0% and a 5% mortgage). But as you mentioned, while we’re not paying off debt anymore, that money needs to go to savings — and I’m not about to blow it on ‘things’ just because it’s there. Talking about finances is just taboo in our society, probably so it doesn’t cause hard feelings. Not ideal, but not a terrible thing, either.
.-= Rainy-Day Saver´s last blog ..Capital One’s ‘Phantom’ Interest Rate Increase =-.
I’ve given up on “we can’t afford that,” as my husband has risen pretty far in his profession (Associate Dean). We actually started (10 years ago) out very similar to you guys, 100k+ in student loan debt + a car loan. Today we are debt free but the house and I’m home with the kids.
Now I say, “that is not in the budget this month, we’ve had some other expenses come up.” Seems to work great even when people know you have a large salary and are wise with your money.
When we were both working people thought we should spend like crazy given our high combined income, but we knew one of us would stay home with the kids.
Our big issue is that my in laws seem to think that by not spending thousands at Christmas and on vacations with them (instead we are plumping up our late start at retirement given advanced degrees and the amount of debt we started out with), we are not doing a good job with our kids and are somehow looking down on them. After all, they had far less money when they were the same age. Sigh. Part of the reason we’re saving so hard is that we KNOW we’ll be taking care of them!
It’s a sensitive topic. We’ve always been the most ‘grownup’ out of our circle – T didn’t go to university but into work, and we live away from home – have done for years. All of our friends still live with their parents and are basically all still studying. Yet we seem to struggle more than most of them *sigh*. It used to be awkward to explain why: back then it was due to debt and poor money management. Now it’s due to a lack of income with me the main earner.
.-= eemusings´s last blog ..Who can say no to a good bargain? =-.
People are more willing to accept a bad situation if they know they aren’t the only ones in a similar place. While no one wants to admit it, many people get jealous or upset when they see or hear about the successes of others because it can serve as a reminder of how they haven’t been successful. In my opinion, it’s not about the end sum, but the progress you are making and the steps you are taking to get there.
.-= Ryan´s last blog ..How to Sell Your Car on Craigslist =-.
Great post. I think lots of people hit it on the head, that when you’re not doing so great, and can safely assume the same of many other people, there’s a collective feeling there that you all are struggling together. It doesn’t sound like “woe is me” or anything like that, because a lot of perfectly normal people are tightening the purse strings a bit due to fear/uncertainty.
However, when you’re doing OK or better financially, it’s almost always going to come off as bragging, or trying to let them know that they are inferior.
I don’t think that this is how most people who say that intend for it to be taken, however. I think it could be more of a “oh, we were in your shoes but now we aren’t, and you can get out too” kind of way.
Could be me just glossing over the specifics of the situation though.
I often struggle with what to say or not say and usually opt not to say anything so I wouldn’t offend anyone or appear to be bragging. I rarely feel like we’re “ahead” of anyone else, just making different spending choices, but to anyone who doesn’t know us well it might appear that we’re quite wealthy and being cheap when we don’t spend on the things many others do. We both earn good incomes, live in a lovely home, take the kids on a month long holiday every other year and are planning to retire in our mid fifties. Sounds lovely, and it is. Anyone who knows us well also knows the other half of the equation that makes all of that possible. We buy used cars with cash, we built our home ourselves for far less than it should have cost, we haven’t had cable in 20yrs, we shop at thrift stores, we rarely eat out, we meal plan/shop sales/clip coupons, we don’t have trendy wardrobes or the lastest electronic gadgets and do virtually all our own repairs and car and house maintenance. We live day to day on about 55% of our take home pay and the rest goes to retirement savings, extra mortgage payments and travel.
To the uninformed observer, we might look really cheap at times when we pass on expensive outings, brand new vehicles, and choose not to have a monster TV with 300 channels. Yes, we can afford all those things. IF we really wanted them. The difference is they just aren’t important to us. Very few people can afford everything all at once and we’re no different. We’ve decided retiring a little early and travelling with our kids in the meantime are our priorities and everything else is cut to the minimum in order to do it. When you have your priorities clearly in your mind you don’t feel like you’re being cheap, just following the spending plan you’ve devised to get you to your goals. I’ve often wondered if those who accuse you of being cheap or try to talk you into spending are just looking for you to validate how they’ve spent their money. After our last trip I heard from a coworker, “wow, that must have cost a fortune. I wish we could do that”. This was coming from someone with two new vehicles, a monster wardrobe, all the latest electronics, five lunches out every week, and a monthly appointment at the spa/salon. Sometimes it’s all you can do not to bite your tongue off. I think I ultimately said something like “I do a lot of research to find travel deals, and we also cut back our spending on a lot of everyday things that aren’t as important to us”.
When we’re with family and close friends there are no issues about money. We all make different choices and there is no finger pointing over each others choices. They know where we choose to cut back and think the travel experiences we’re creating with our kids are great. Some of them buy new cars but have no interest in travelling. Others have all the latest electronics but entertain at home rather than spending restaurants. Another is working fulltime plus 2 PT jobs to pay off her student loans. As a newly minted lawyer her starting salary is impressive and she has great lifetime earning potential but has chosen to continue living like a poor student until the debt is paid.
If anyone figures out the perfect answer to accusations of cheapness, let us all know! I don’t want to offend anyone but sometimes you do get fed up justifying your choices.
“Not this time, thanks.” This gets me out of the too-spendy situation without getting into money money money. For my follow-up, I smile sweetly and a little sadly, and keep quoting Judith Martin, “I’m sorry; but it’s just not possible.”
Yes, it may not be possible because I don’t HAVE the cash to fly to Aruba; or not possible because my passport has expired; or not possible because I don’t WANT to go to Aruba.
If the asker persists beyond the third “not possible” I suggest an available alternative that addresses the basic need (usually it’s about connection–going out to dinner isn’t about the fancy French restaurant–but about breaking bread together). So I’ll suggest dinner at my house together–thaw a roast (bought on sale), make my infamous cauliflower soup, and get fresh greens at the farmer’s market. Or a picnic in the park–I’ll raid my wine cellar (BevMo and their nickle sales!) and get some cold cuts, fresh french bread, and splurge a little on good cheese (Fresh & Easy, Trader Joe’s).
No need to justify what you do and how you choose, and everyone’s needs get met.
Not talking about money or what constitutes “doing well” also leads to some weird misconceptions, though. I am reminded of a conversation I had with a friend, who felt that if he graduated with a master’s degree (for which he was getting at least a partial scholarship) and only earned $50,000 a year afterwards, he would be in the poorhouse. Possibly true if you manage your money terribly, but we were able to ease his mind by sharing our yearly expenditure (less than half of $50,000 even with having to buy our own health insurance, and I would say we live very comfortably).
Actually except for on the internet, I don’t think people are comfortable talking about money. I got excited when I started learning personal finance to talk to friends about budgets and such (whose income range anywhere from 20K? to who knows 6 figures) but quickly found out no one wants to talk about it and it is not a polite topic of conversation. I guess that’s why it is called personal finance. Personally in my family both my husband and I often wear clothes, shoes until they wear out so I think everyone assumes we have no money so we don’t get in this situation.
No one in our circle talks about money… except to complain. We’ve found that it’s best to listen and nod your head alot.
Like others, we “could” afford tv, cell phones, and eating out each night. But we’re choosing to live a more modest lifestyle in the hopes that we won’t work until we drop. This modest lifestyle has been interpreted as us being broke. Frankly, that’s alright with me – we’ve opened a lot of new doors for pot-lucks and inexpensive gatherings with friends. It’s been more fun now that are friends are also cutting back, and we’re “all in the same boat”…
I think one significant element to the reason as to why people hide their financial successes is because we live in a rather litigious and taxable society. If paranoia of the tax man doesn’t drive us mad, a good lawyer or two can. When you’re wealthy, it becomes unsurprising if many people end up wanting to take your money.
if I strike up a deal of wealth one way or another, chances are I won’t be as secretive as most. I’ll end up protecting my assets either through business structures or trusts, but try not to let any hubris get the best of me. After all, there’s no point in life where you ‘arrive.’ It keeps going, no matter your status quo.
Money has certainly become the last taboo.
Im diggin the post. This is the reason why I aim to keep my and the rest of my staffs finances open to the public. If we are doin well , why hide it. If we are going through a rough patch, why hide it.
http://thisiswhyuBROKE.wordpress.com
Financial advice + Ridicule + Quality HipHop
.-= ThisIsWhyUBroke.com!´s last blog ..It’s Time to Stop Paying Your Debts. Yes. You Absolutely Read That Right. =-.
Interesting post. Like Funny About Money, I still FEEL poor even though my divorce-related debt is gone and I have a (for now) regular part-time writing gig. When I needed to replace a 25-year-old winter coat, my first thought was “I can’t afford it.” I wound up getting a “new” Eddie Bauer down coat at a thrift shop for $14.99 plus tax. As seems to be the case for other commenters, I *could* have gotten a brand-new one for 10 times the money. I just didn’t *want* to do that, because I’d rather send that cash toward other goals.
(If it’s kosher to post URLs, I wrote about this subject for MSN Money, “Is it OK to start spending again?” http://articles.moneycentral.msn.com/SavingandDebt/LearnToBudget/is-it-ok-to-start-spending-again.aspx)
As for failures vs. successes, I think some people are more afraid of looking like a braggart than a cheapskate. I’ve certainly been accused of cheapskatery (is that a word? it is now) because I still live pretty much the same way as I did when I was a late-in-life university student. But living below my means is allowing me to do things I want; right now, for example, I’m spending 10 weeks in Alaska, house-sitting and seeing friends and spoiling my great-nephews (frugally, of course). Because I’m a writer I can take my work with me, so as long as I keep living carefully I can go wherever I want. I’d rather shop at Value Village and eat lots of pinto beans and be able to travel than to have a big-screen TV and a new car and have to worry about how I’ll pay for them.
But that’s my CHOICE. Everyone else has a choice, too. I just wish that some people didn’t think their choices were mandates for the rest of us.
I love this post MM. And I’ll admit that in the past, I’ve found it easier to say that I’m hard up than I’m doing well.
Nowadays I try to keep my finances to myself. I lost a lot of cash in the business that sank. Some folk assumed that I was protected because it was a limited company but I made a few mistakes and didn’t protect myself well. Also I sold a lot of personal items to try to bail the company out.
So I had to start again, pretty much from scratch. Then one day a neighbour asked me what I was going to buy to reward myself for quitting smoking. I explained that I was too hard up to make extravagent purchases right then and she made a really rude comment about “how the mighty have fallen”.
I was really offended because I’d never shown off about what money I was making. I guess I spent a lot on travel and eating out and stuff, so people made assumptions. But after that comment I decided to lead as frugal a life as possible and not give anyone the faintest idea as to how well I was doing.
hi all people with money iam a very young boy turning 18 this year and i have read all your coments and its good but you should also hear from a poor side of view. iam studing at university as first year and i fail to pay my studies and now iam out until i pay my fees, please if anyone is able i beg of you help me please you wouldnt regret this all i need is a little. if any ones is touched to help me here is my e-mail: [email protected] please help.
Comments on this entry are closed.