Personal Finance: Why you need to lower your expectations about money

I’m tired of talking about money. I know how that sounds considering I talk about money for a living. Yet so many of the conversations I’m involved in these days seem to be about how expensive everything is now (which is true) or how bad the economy is (which is false). I feel it. Can you believe how expensive that restaurant was? I’m shocked at how expensive weddings are. Tipping culture is out of control.

It’s not that these problems aren’t painful, it’s just that they’re tiring. Some people have simple solutions, but they are not fun. You can cook at home. A lavish wedding is not mandatory. Tipping is optional. If you don’t mind giving the barista a buck or two, there are cheaper alternatives to your morning coffee.

Part of the problem is that we seem to have blurred the distinction between wants and needs. A gas tank is a necessity for raising children, having a place to live, and getting to work. The latest iPhones, not so much. Some people, myself included, have lost the thread on this one. If you were able to vacation in Europe this year, it would be great. Also, it was a privilege, not a right. It’s also a choice, and it can make it harder to reach your financial goals later on.

The American economy remains a prosperous economy. Of course, wealth is not equally distributed, and many people are truly suffering. But even though consumers say they’re angry about the economy, they’re not changing their spending habits overall. For many people in this country, life is pretty good. Yet they often don’t feel that way. No matter how much we have accomplished, we always want more.

Lately, I’ve been looking at landscapes and thinking about expectations. Think about what is fair to expect in life and financially, and what is not. I sometimes wonder if part of the answer is that we need to scale back our expectations. Things may not be as perfect as everyone wants, but it’s okay, it’s okay too. Just because something feels bad doesn’t mean it’s fundamentally unfair. (Sometimes the most unfair thing is that it feels like: Really As long as you’re on the right side of the deal, great. )

I say all this knowing that I am in a bubble. I’m a millennial living in New York City, and I’m surrounded by primarily middle-class and upper-middle-class people, many of whom don’t think of themselves that way. I also say this as an upwardly mobile person from a solid working class background. If I could tell my child version of myself how things would turn out, I would live in a big city, be able to afford an apartment in that city, and have the opportunity to travel regularly. It’s a plane–she won’t believe it. I know this is not true of my generation or everyone before and after me. Still, sometimes I feel like it’s still not enough.

That being said, why do we end up like this? Why do so many of us feel like whatever we have is not enough?

The truth is, much of it is not our fault. We live in a consumer economy where more is more. We are constantly exposed to more and more options, which results in us chasing the latest version of the “best” of everything – a fascinating but impossible quest.

“When you have a lot of options, your expectations increase as a result,” says Dorwin P. Cartwright, professor emeritus of social theory and social behavior at Swarthmore College and author of several books on psychology and economics. Barry Schwartz says. “when [businesses] When you start making so many different things, it’s inevitable that you’ll develop an expectation that the perfect thing is out there. If that’s your criteria, whatever you choose will end up disappointing. ”

There is no part of society that isn’t screaming at us to spend, spend, spend. And frankly, we think it’s un-American to live any other way. Because of this, we confuse non-essentials with necessities. We don’t just want something, we feel like we have to have it.

Modern technology puts all of this into overdrive. “Following the Joneses” means pondering the expanding world of the Joneses. Because we don’t just compare ourselves to our neighbors, we compare ourselves to the TikTok moms and YouTube hustlers who seem to have it all figured out. With so much information now available, possibilities are now present in our daily lives in ways that were less evident a generation or two ago. He starts to think that if XYZ is possible for someone, why is it not possible for me?

Credit cards and smartphones have made it easier than ever to spend money without having to do the math. “A lot of people don’t really know how to budget, and that’s because of the credit card society,” says David Mick, a professor of commerce at the University of Virginia who focuses on diverse consumer behaviors. , Marketing, Mindfulness. “People can now buy a lot of things right away without thinking twice.”

It all feeds into a hedonic treadmill where we’re always chasing the next dopamine hit, but no matter what happens, we eventually return to our baseline happiness level. The pursuit of continuous joy and fulfillment is tempting, but unwise. Eventually, that big new thing doesn’t have the same excitement. Even if you can buy a $40 bottle of wine to drink with dinner, it’s often really better to stick to a $15 bottle and save the expensive wine for special occasions. . Schwartz said that truly good and special experiences in life should be rare, so they don’t become commonplace and can still bring satisfaction. (He joked that, to his knowledge, “no one on earth has taken this advice.”)

Some of the ugliest truths about economics are ones we like to keep hidden from ourselves. The future may not be so rosy. You may never get the perfect job or earn a “decent” salary. A college degree certainly helps in the labor market, but even a Harvard MBA doesn’t guarantee a ticket to the ideal life. The lifestyle you aspire to may not be compatible with the cost of living in the city you want to live in. The down payment on your dream home may be out of reach. The reason for this is not only financial reasons, but also a lack of savings. When I was in my 20s. Maybe your student loans prevent you from doing that. Maybe you were a little frivolous. Even if you get what you think you want, you may feel like it’s not enough. You can’t have it all, unless you’re Elon Musk or something.

“Money is a zero-sum game, so there’s always a tradeoff. If you’re spending money on X, you’re not spending money on Y,” says Vanderbilt University marketing professor of consumer psychology and behavioral sciences. Kelly Goldsmith, a researcher in “Unless we grow the pie,” she added, but that’s not guaranteed.

I don’t want to belittle anyone’s hardships, regardless of their income level. Part of the reason so many of us feel so much pressure on the economy is because everything is so unequal. In fact, the 99 percent are left behind for the remaining 1 percent in the permanent fantasyland of reality. It’s easy to be tempted to say no more and just use whatever you have.

“Depriving yourself is always difficult, but it’s especially difficult when the economy appears to have moved in a direction unfavorable to the current situation for reasons that have nothing to do with you,” Goldsmith said. Told.

Still, it’s useful to take a step back. Mick said that sometimes a simple life is better, despite societal pressures to the contrary. “There are a lot of rights in the world, especially in American culture,” he said.

You can’t afford to be totally devoid of some kind of reward in your life. But if you don’t have all the essentials because you spent money on extras, you should think about it. It’s perfectly fine and wonderful to want to see Taylor Swift or Beyoncé live. What a joy! If you’re not in the 1%, know that it may cost you money, perhaps at the expense of something you’ll need in the future. Luckily, Taylor and Bey are also releasing movies that are much cheaper to watch and hopefully more enjoyable.

We live in a world that constantly tries to deceive and deceive us, and we are always surrounded by deceptions big and small. It can feel impossible to navigate. Every month, join Emily Stewart as we look at all the little ways our economic system controls and manipulates average people.welcome to big squeeze.

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Have ideas for future columns or thoughts about this column? Email emily.stewart@vox.com.