Key Takeaways
- Feelings of inadequacy can lead to lifestyle creep, overspending, or decision-making based on incomplete information about others’ finances.
- We’re wired to compare ourselves to others, but when used effectively, it can motivate (instead of paralyze) our financial progress.
- Highlight reels on social media rarely show the debt, trade-offs, or sacrifices that happen behind the scenes, leading to distorted perceptions of someone’s financial reality.
- Comparing savings habits, debt management, or investment consistency is far healthier than comparing possessions or lifestyles.
Whether you’re swapping stories at a neighborhood barbecue or scrolling through social media, there’s a natural tendency to compare yourself to others—even if you don’t realize you’re doing it. When someone’s posting photos from an exotic honeymoon while you’re at the kitchen table planning out your monthly budget, feelings of disgruntlement and confusion can start to bubble to the surface.
“They’re the same age as me, how are they affording this?”
Or, jumping straight to the point, “Am I doing it all wrong?”
We naturally compare ourselves to others in similar socioeconomic circumstances, especially when it comes to certain wealth statuses—a high salary, homeownership, cars, vacations, and general lifestyle decisions.
It may be impossible to stop comparing ourselves to others altogether. Rather, consider how you might be able to reframe the narrative. A comparison doesn’t have to be a negative, stressful, or self-depracating act. You may instead want to use it as an opportunity to gain important insights and motivate yourself to reach new financial milestones.
Why We Compare Our Finances
Humans are wired to compare—so much so that we have a name for it: Social comparison theory. As people, we evaluate ourselves by measuring our progress, success, and even our own happiness against others. In moderation, comparing ourselves to others is a useful instinct. It helps to orient us within our communities and provides a sense of what’s “normal.”
The growing adoption of social media usage across all age groups, however, has expanded our points of comparison far beyond our immediate peer groups and communities. Now, humans can connect with millions of other humans around the world in seconds—creating a virtually limitless comparison pool.
“Social media has fundamentally changed the landscape of social comparison by making it constant, curated, and largely one-directional,” explained Ashley Quamme, LMFT, FBS, CFT, a financial behavior specialist and founder of Beyond the Plan. “We’re now exposed to highlight reels of financial success (the new home, the dream vacation, the career milestone) without the context of the trade-offs, sacrifices, or full financial picture behind those moments. This creates what I call ‘comparison without context,’ where we measure our behind-the-scenes reality against others’ carefully edited performances.”
In previous generations, most financial comparisons were limited to small circles of people you might interact with on a regular basis: neighbors, coworkers, and family friends. As Carolyn McClanahan, M.D. CFP, founder of Life Planning Partners, Inc., noted: “Instead of seeing how your neighbors live, you’re seeing how millions of other people live. This greatly increases the feeling that a person should have more like everyone else.”
Important
When your social feeds showcase only the best moments, it can exacerbate feelings of being behind—even if you’re far from it.
“People only present their good side,” added McClanahan. “It shows all the amazing trips and expensive purchases, but doesn’t show the credit card bill or lack of savings.”
Beyond the external pressures, social comparison shifts something more subtle inside us. As Quamme put it, “Rather than asking, ‘Am I making progress toward my values and goals?’ we unconsciously ask, ‘How do I measure up to others?’”
Over time, that shift from an internal to an external reference point can distort your sense of progress and satisfaction—even when you’re doing objectively well.
The Dangers of Unhealthy Comparison
When comparison turns constant or competitive (as is often the case with social media), it has the potential to impact your sense of financial well-being and spending habits. This can look different for everyone, but it might start with feeling more emboldened to splurge on things like an upgraded car, a pricier vacation, or a new wardrobe.
Warning
Over time, those behaviors can spiral into what’s called lifestyle creep. This is the tendency to spend more as you earn more, or simply to keep up with others.
“Behaviorally, comparison can lead to what you might call ‘financial shape-shifting,’” said Quamme. “We adapt our spending and goals to match others rather than our authentic priorities. This shows up as lifestyle creep, keeping up with peer spending patterns, or pursuing financial goals that look impressive but don’t align with our values.”
The emotional fallout can be just as damaging. Constantly feeling “behind” can lead to feelings of shame, anxiety, or a persistent sense of inadequacy—even among people who are financially stable. “Emotionally, constant comparison can fuel a sense of ‘not enough,’ which erodes our belief in our ability to manage money effectively,” added Quamme.
Social media only magnifies these feelings. As Zach Teutsch, managing partner at Values Added Financial, explained: “Social media is quite damaging to us all. One of the ways it hurts us is that we compare the real version of ourselves to the carefully cultivated, filtered version of others. Of course, we don’t usually measure up.”
When your reference group is based on others’ highlight reels, the comparison is nearly impossible to win.
Note
There’s also a cognitive bias at play, as people tend to notice those who seem wealthier or more successful, as opposed to those quietly working toward stability.
“People tend to ‘compare up’ more than they ‘compare down,’ and it leaves us to feel inadequate when we do,” said Teutsch. “One workaround is to think back to your elementary school, middle school, or high school, or another group that is more representative than people at your current workplace or alumni of your college.”
Beyond feeling emotionally vulnerable or uncomfortable, unchecked comparison can actually lead to poor decision-making. “Strategically, it can cause us to make decisions based on incomplete information,” said Quamme. “We might see a friend buy a home and feel pressure to do the same, not knowing they received family help with the down payment or that they’re house-poor as a result.”
Healthy Ways To Compare Your Finances
The whole concept of comparing yourself to others isn’t inherently a bad thing. What really matters, for your own emotional and financial well-being, is how you choose to interpret and act on it. Used thoughtfully, comparing your finances can help you gain perspective, identify healthy habits, and even find motivation to improve.
Teutsch explained: “As humans, we are a social species, using the cues from those around us to understand what behavior is appropriate—and of course, this extends to our financial lives. Rather than trying to avoid comparison, perhaps it’s better to think through how to have a healthy relationship with it.”
Here are three simple strategies for comparing your finances to others in a more effective way.
1. Gather More Relevant Data
Reframe your observations of others as a way to gather insight, rather than exacerbate the insecurities you may already have. Instead of measuring your worth by someone else’s income or lifestyle, look to objective benchmarks that offer real context for your age, income, and life stage.
For example, it may be helpful to review national averages for net worth or retirement savings among your peer group. Doing so can help paint a more realistic picture of where you stand. Though with so many unique factors impacting your financial picture, consider this statistical data as guideposts—not the end-all-be-all measure of success.
2. Focus on Your Progress
It’s also important to track progress over perfection. Your financial picture will always evolve, so what matters most is whether you’re better off than you were a year ago. Are you saving more consistently? Paying down debt? Feeling more confident about managing money? Those trends can tell a much more meaningful narrative than what you might garner by comparing your current financial standings to others.
3. Identify Positive Behaviors
Comparing your spending habits, savings rates, or debt reduction strategies can be far more constructive than comparing cars, homes, or vacations.
Note
Quamme said the healthiest benchmarks are “progress-based and values-based,” as these emphasize growth and alignment with what matters to you personally.
Benchmarks That Actually Matter
Ultimately, comparing your financial journey to someone else’s can distract you from your own goals and progress. As Tanner Merritt, CFP, CFT at Life Planning Partners, put it: “Instead of asking yourself if you’re ahead or behind, ask ‘Am I moving closer to what matters to me?’ This turns comparison into motivation rather than discouragement.”
Healthy financial benchmarks can help you focus on sustainability and security within your financial picture. Here are a few example benchmarks to consider:
Net worth by age: Tracking your net worth (your total assets minus liabilities) gives you a broad view of progress. Comparing your current number to where you were five years ago is far more meaningful than comparing it to someone else’s.
Retirement savings: Industry guidelines can help you gauge whether you’re generally on the right track. For example, T. Rowe Price suggests that by age 35, you should have about 1.5x your income saved for retirement. By age 55, that benchmark jumps to around 8x your income.
Important
Remember, these are just general averages to consider. What really matters most is being consistent with your contributions over time.
Debt-to-income ratio: This metric helps ensure your debt remains manageable relative to your income. A lower ratio means more of your money can go towards your goals, regardless of how your numbers stack up against peers.
Emergency fund: Having three to six months of living expenses set aside is one of the most empowering financial safeguards you can create. It provides a safety net that protects your other financial assets (like long-term savings and investments) against unexpected costs, while helping you avoid the need to incur additional debt.
Reframing the Conversation With Yourself
Rather than asking “Am I keeping up?” a better question may be “Does this align with what I truly want?”
Defining your priorities transforms money from a measure of worth into a tool for fulfillment. Having clarity about what matters most can help reduce your urge to compare in the first place, said McClanahan.
Important
When you’re able to celebrate your own milestones, you create an internal motivation that’s far more sustainable than external validation.
Quamme also encourages reframing comparison through curiosity rather than judgment. “Positive peer comparison works when it expands possibility,” she explained. “Seeing peers successfully navigate financial challenges, like a friend who negotiated a raise or a colleague who started investing, can show us what’s possible and provide practical strategies. The key is moving from competitive comparison (‘Am I ahead or behind?’) to collaborative learning (‘What can I learn from others’ experiences that might apply to my situation?’).”
With social media acting almost as a public scoreboard, unproductive comparison is becoming an increasingly concerning side effect. But when we reframe the comparison narrative, it can serve our wealth journey in a more productive way. Using peer comparison as motivation rather than measurement enables you to stay grounded in your own values while still drawing inspiration from others’ successes. In doing so, you’ll find a far healthier, more empowering way to measure financial progress.
The Bottom Line
Comparing your finances to others is part of being human, but healthy comparison focuses less on keeping up with others and more on staying grounded in your own financial journey. It’s important to recognize where you are, celebrate how far you’ve come, and stay curious about what’s possible.
