One of the strangest things about money is that the amount itself doesn’t really matter. There’s no magic income number guaranteed to satisfy everyone. People on low incomes can feel financially secure, whilst people on six figures but addicted to spending will always feel cash-strapped. We tend to assume that money problems are caused by a lack of money, but it’s simply not the case.
The uncomfortable truth is that most of us just don’t know what “enough” looks like.
We know what “more” looks like. We know what “better” looks like. We know what other people have. But we rarely stop to define the point at which we’d actually be satisfied. Without that definition, you’re set to earn more every year - and still feel permanently behind.
Word of the Week: “Enough”
“Enough” is one of the most important words in the English language, and one of the least examined.
Think about how much time people spend pursuing success, money, recognition or possessions. Now think about how rarely they stop and ask themselves a simple question: how much is enough?
For many people, enough is always somewhere in the future. They tell themselves they’ll relax when they reach a certain salary, buy a certain house or hit a certain milestone. Then they get there, move the goalposts, and start the chase all over again.
The problem isn’t ambition. The problem is that without a definition of enough, every achievement feels temporary. No matter how much progress you make, the finish line remains just out of reach.
The Long Truth question is this: if you don’t know what enough looks like, how will you ever know when you’ve arrived?
Cliché of the Week: “Money can’t buy happiness.”
Really? If certainly would be nice to test that sometime!
Money can clearly buy things that make life easier. Comfort, convenience, freedom and security for a start. Who in their right mind would choose financial stress over financial stability?
But if money is certain to get you satisfaction, why do miserable rich people exist?
Satisfaction depends on comparison. If your sense of success comes from having more than the people around you, you’ll always be vulnerable to somebody with a bigger house, a newer car or a more impressive lifestyle. There will always be somebody ahead.
If the money feels enough, happiness will be possible in that part of your life. But what about the million of other ways you can be unhappy? Money doesn’t touch those.
Question of the Week: Who would I be trying to impress if nobody could see my life?
Imagine nobody knew what car you drove. Nobody knew where you went on holiday. Nobody saw your clothes, your house, your social media posts or your job title.
How many of your financial decisions would stay exactly the same?
Most of us like to think we’re completely independent thinkers, but human beings are social creatures. We take our cues from the people around us. We compare. We imitate. We compete. We signal.
There’s nothing unusual about that. The interesting question is whether we’re aware of it.
Many purchases are not really about the thing being purchased. They’re about belonging, status, identity or approval. The money leaves your bank account, but the thing you’re actually buying is often emotional rather than practical.
Spending more than you need to in order to impress others is a mug’s game. Yet so many people fall into that trap.
The Long Truth Method
Short Truth
“I’m spending money to keep up with my friends.”
Structural Truth
The first thing to notice is the phrase itself.
What exactly does “keeping up” mean? Keeping up financially? Socially?Professionally? Lifestyle-wise?
More importantly, who decided that keeping up was necessary in the first place?
The phrase contains a hidden assumption: that life is a race and your friends are the competition. Before solving the problem, it’s worth questioning whether that assumption is true.
Personal Truth
It’s easy to blame external pressure, but the harder question is what role we are playing ourselves.
What are we getting from the spending?
Perhaps it creates a sense of belonging. Or maybe it prevents feelings of embarrassment. Does it help us feel successful or accepted? Perhaps it protects us from feeling left behind.
The spending may look like a money problem on the surface, but the reward is often emotional rather than financial.
Long Truth
Most people do not spend money simply to acquire things.
They spend to acquire feelings.
The feeling of being included. Or being successful. Or being admired. Or simply not being the odd one out.
The problem is that these feelings are temporary. A purchase can create a momentary sense of status or belonging, but it rarely lasts. Soon there is another meal out, another holiday, another upgrade, another opportunity to compare yourself with someone else.
What looks like a spending problem is often a comparison problem.
Long Solution
Instead of asking how to keep up with your friends, ask a different question: what kind of life am I actually trying to build?
The answer may have very little to do with what your friends are doing.
Define what enough means for you. Define what success means for you. Define what financial security means for you.
Once those definitions become clear, many spending decisions become easier. You stop asking whether a purchase helps you keep up, and start asking whether it helps you move towards the life you’ve chosen.
The two questions often lead to very different answers.
Final Thought
One of the most expensive assumptions people make is that everybody else is paying close attention to their lives.
Most people aren’t.
They’re too busy worrying about their own finances, their own careers and their own insecurities.
That means a surprising amount of spending is performed for an audience that isn’t really watching.
The Long Truth isn’t that you’ll never have enough money.
It’s that you’ll never feel like you have enough money until you’ve decided what enough actually means.
Money buys short term fix happiness so it’s apt that the long truth suggests otherwise.