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The ‘three ‘Cs’ – comparing, competing and copying can lead to a financial downfall

23 May 2022 Old Mutual

It’s most often called ‘keeping up with the Dlamini’s’. But, it is really about seeing what friends, relatives and neighbours have, comparing your possessions to theirs and then deciding that you deserve the same, secretly competing and copying expensive lifestyles we cannot afford. It is, unfortunately, also why many people find themselves in financial trouble, says Old Mutual.

We live in a competitive society and will often compare ourselves to others who we believe shouldn’t earn the same as us. We live in similar neighborhoods, but they always have better houses, cars, furniture, lifestyles and their children go to better schools and we put ourselves under unnecessary pressure yet the reality is we can’t have it all. Those feelings of being unequal in the status stakes are made worse by social media, peer influencers, advertising, and even store windows. “They tempt us to throw financial caution to the wind and ‘live large’ to be like the people we admire and envy,” says John Manyike, Head of Financial Education at Old Mutual.

“When envy and that competitive spirit lead to copying and spending money that we don’t have so that we can also look as prosperous as others in our circle, the truth hits home. We may have the status symbols we crave, but they come with financial stress and worry. Comparing, competing and copying have flopped and have damaged rather than improved our lives.”

“It’s a harsh lesson to learn and is caused by the fact that we don’t know much about those we admire. They may appear prosperous and happy, but are they?”

“The 2021 Old Mutual Savings and Investment Monitor survey reveals what may be hidden behind the neighbours’ luxury lifestyle. The survey found that 58% of survey contributors admitted being financially stressed. Worst of all, 34% stated that they could survive for less than a month if they lost their jobs. So, the chances are pretty strong that many of those with desirable lifestyles are really deep in debt- they just hide it well.”

“As far as social media are concerned, it helps to realise that people only show others what they want them to see and believe- not the real experiences and problems they face. This leads others to believe that their friends are making more money, don’t have as much debt, or aren’t facing the same financial hurdles. There is a lot of deception. ”

Instead of spending hours comparing your finances to those of others and resisting the urge to copy them, Manyike recommends that:

• You realise that comparison leads to more spending. (Research in the USA in 2019 found that 48% of millennials had got into debt trying to keep up with friends – a trend that is probably just as valid for South Africa).
• You ask yourself whether competing and copying someone will help you achieve long-term financial security or give temporary satisfaction with long-term debt.
• You Stick to your lane and appreciate that you have your own journey and unique destiny.
• You spend money on what you need rather than what you want. Wants often become more important than they are and become needs when you compare yourself to others.
• Instead of thinking about someone else’s financial situation, you use the time to set your own financial goals and plan how to achieve them. This should involve:
• Setting short, medium and long-term financial goals and getting the professional advice needed to achieve them. Meeting regularly with a personal financial planner who can help you achieve lifetime financial goals will make you confident about money matters and less likely to want to copy others.
• Creating a budget that is focused on setting aside money every month for savings and investments.
• Reducing and paying off debt and looking at each payment made as another achievement on the road to future financial wellness.

“Stopping the comparison, competition and copying habit will empower you and set you free. Educate yourself about money and build a positive future. Every minute spent on envying others is time that could have been used to make better personal financial decisions and become the best you can be.”

“Creating a stable financial future is about prioritising personal financial planning, acting now and letting others follow the financial path they choose,” says Manyike.

Quick Polls

QUESTION

We have watched with interest as each of the country’s large life insurers report their 2021 life claims statistics, with soaring claims and claims values. That got us thinking: how do the big life insurers compare against one another, from an IFA perspective?

ANSWER

An insurer is an insurer is an insurer
All are excellent: would not deal with them otherwise
There is one insurance brand that stands out for me
Tied agent: but my brand is the best out there
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