Money should be working for us – we shouldn’t be working for money. And sometimes we have to honestly evaluate if we’re driving our money decisions, or if our money decisions are driving us. – Jeremy Walter
One of the reasons why money decisions can drive us (crazy) is status anxiety. Status anxiety is defined as “the constant tension or fear of being perceived as “unsuccessful” by the society in materialistic terms.” That gnawing feeling that we are somehow falling behind. Our paycheck isn’t big enough. Our car isn’t cool enough, etc. The Accumulator over at Monevator notes:
You can’t achieve financial independence without facing down status anxiety. I can rationalise lifestyle inflation away by claiming convenience, comfort, and YOLO – but how much of our spending is actually explained by the need to assert our position in the tribe?
He has some good tips that can help you put into perspective what matters to you. If you don’t have some internal standard you will always be at the mercy of outside forces. Yet, let’s not kid ourselves that this is somehow easy. Carl Richards noted:
We have to realize that the financial actions of other people should play no role in the narrative running through our heads. Even more specifically, the financial actions of other people should play no role in our financial actions. We just have to let that stuff go.
That is why putting down markers that define success for you is helpful. It provides you concrete ways to measure the gap between where you are and where you want to be. Then again, it’s not only in financial terms that we suffer from status anxiety. When we look at our careers the same instinct kicks in as well. Jonathan Clements writing at Humble Dollar examines this very tendency:
We keep striving for one more big promotion or one last major achievement, so we can make our mark on the world, go out on a high note and thereafter rest on our laurels. But it almost never works out that way: We slip into retirement and what we achieved is reworked, abandoned, ruined or simply forgotten.
This is a downbeat take on what we can achieve in life, but realistic. Only a few people, inside our inner circle, truly care about us. Focusing on what we can do for (and with) them matters. Owning your own time matters. Chasing unrealistic career goals or spending to keep up with people who don’t even know you, is a recipe for suffering.
Status anxiety thrives in a vacuum. Knowing when enough is enough, isn’t easy. Putting down markers that represent success for you will help fill that void and keep you from making mistakes based solely on your perception of others, that likely aren’t real in the first place.