We probably don’t mean to, but I’m still surprised at how often I hear people measuring their “happiness” or “success” compared to their neighbor/friend/co-worker. And part of that measurement seems to include money, possessions, even experiences.
Sometimes without meaning to, we start making decisions based on other lives, other expectations, instead of what we really want. Taking this approach overlooks the personal aspect of personal finance. It’s a concept that my friend Tim Maurer came up with: “Personal finance is more personal than it is finance.”
So if it’s really personal, and if it’s our situation and our dreams that matter the most, then what are doing comparing ourselves to anyone else? There’s also the hard reality that we need to take responsibility for our finances. We may partner with someone else to help us with the complicated stuff, but we’re ultimately responsible for that final decision.
There’s no guarantee that what matters most to you will matter as much to anyone else. That’s why it’s so important to carefully review financial advice to make sure it fits you.
If you want to retire at 50, then your neighbor’s advice to buy a second home as an investment, may not be best for you. If you want to help your kids pay for college, then it may not be the best idea to spend thousands of dollars sending them to sports camps instead of saving money in a 529 plan.
Now there may be individual situations where a second home and sports camps make perfect sense. However, don’t assume that it will work for you, too, without considering your personal situation.