It’s well known that most people determine self-worth and personal value, at least in part, by comparing themselves to those in their social circle. In psychology, this is known as social comparison theory, and with the ever-increasing use of social media like Facebook, Instagram, and Twitter, social comparison is having a greater effect on us and on how we spend our money.
When we hear the word addiction, whether it’s in a conversation or in a story on the news, we think of drugs, alcohol, gambling, or some other vice that “other” people in our world battle. We rarely think of addiction as something we personally deal with. I believe every person engages in some type of addictive behavior, often several, and the financial impact these can have are significant.
Recently a primetime special, “Back in the Game” aired on CNBC. Hosted by Alex Rodriquez, the former baseball player, the show focused on retired pro-athlete Joe Smith, who although earning over 6o million dollars over his playing career has little to show for it. To most people, it seems unimaginable to end up this way, but a large majority of those who think so would end up in the same place if given the same opportunity.
My mentor on personal finance would often say, ‘Show me your checkbook and I’ll tell you what you truly care about.’ For those of you who don’t know what a checkbook is let me rephrase, ‘Show me your online account statements and I’ll tell you what you truly care about.’ So, what does your spending reveal about you?