Jul 24, 2024
Comparison is the thief of joy — and personal finance celebrity Dave Ramsey believes this has been supercharged by social media in recent years.
On an episode of The Ramsey Show, Hillary, a 33-year-old from Salt Lake City, Utah, called in to share the inadequacy she feels when she sees peers online flaunting their supposed wealth.
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Not only does she feel like she’s “losing at life,” she also doesn’t understand how other millennials are able to afford their seemingly lavish lifestyles.
“The problem [is] that… your generation was one of the first ones to really, really struggle with it,” Ramsey told her, referring to the “power of social media.”
Here’s why he's convinced social networks distorted reality for many Americans.
Keeping up with the highlight reel
Hillary, who makes $60,000 (before taxes) as a health educator, said she lives a “humble” life with no debt other than a modest $140,000 mortgage.
She’s in a relatively strong financial position; however, seeing her friends and colleagues share expensive purchases and extravagant holidays on social media has made her feel left out.
“I feel like I’m losing at life,” she admitted to Ramsey. In response, Ramsey assured her that the temptation to compare your financial situation with others isn’t a new phenomenon.
“We used to say ‘don’t keep up with the Joneses,’' he added. “But [in those days] it wasn’t as hard to keep up with the Joneses because they lived next door and you saw them driving their [nice] car — but you also saw them have big fights and you knew their kids were messed up.”
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Therefore, when you saw them with the fancy car, it wasn’t that big of a deal, Ramsey said, “because you kind of knew some of the dirt too.” Compare that to Instagram, which Ramsey called a “highlight reel,” and it’s easy to see how younger adults get caught up in the illusion.
This has skewed the financial perspective of many people. In a survey conducted by Qualtrics for Intuit Credit Karma, 29% of American adults said they felt a sense of “money dysmorphia” — a term coined by financial advisers to describe a feeling of monetary inadequacy despite the fact that your personal finances are better than you might perceive.
Many Americans experienced this gap between perception and reality, but younger Americans were more prone to it, according to a LendingTree survey.
In fact, 62% of Gen Z said they felt some pressure to keep up with the perceived financial successes of their family and friends. Meanwhile, more than half (51%) of American adults claimed they’ve spent at least some of their money simply to impress others.
Spending sprees motivated by pride and envy often lead to more debt, according to Ramsey Show co-host Dr. John Delony. “That Escalade is actually a really amazing car,” he told Hillary while discussing her feelings about her colleague's recent purchase of a luxury vehicle. “They’re very nice — and [a] 99% chance that’s not real money that bought that.”
Ramsey echoed this sentiment with a personal example. “I was driving a Jaguar when I went broke,” he admitted.
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Unfortunately, the risks associated with excessive social media usage stretch beyond financial issues, according to Delony.
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The loneliness epidemic
With his extensive experience in mental health counseling, Delony was quick to deduce that Hillary’s experience on social media was having an impact on her emotional well-being.
“How [many] of these videos you're seeing… are reinforcing a sense of loneliness?” he asked. “Probably a lot,” Hillary responded.
Research published in the Journal of Happiness Studies found that users turned to social media when they were feeling lonely; however, passively scrolling through images of other people having fun ultimately made them feel worse due to social comparisons.
“Social comparison often happens when you feel like you’re not experiencing the lives others are portraying in their posts,” said Michael Torres, PsyD, a California-based clinical psychologist at the Kaiser Permanente Mental Health and Wellness Center. “When you compare yourself to others, it leads to self-judgment, low self-esteem, and a negative sense of self.”
Instead of comparing herself to others, Hillary should be proud of her accomplishments and financial stability.
In fact, Delony and Ramsey believe there’s an easy solution for her situation: resist the urge to mindlessly scroll on social media and focus on cultivating friends and community in the real world — without making comparisons.
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Vishesh Raisinghani is a financial journalist covering personal finance, investing and the global economy. He's also the founder of Sharpe Ascension Inc., a content marketing agency focused on investment firms. His work has appeared in Moneywise, Yahoo Finance!, Motley Fool, Seeking Alpha, Mergers & Acquisitions Magazine and Piggybank.
