The environment significantly influences our decision-making, particularly concerning financial choices. This is why the phrase "keeping up with the Joneses" is so popular; people often feel compelled to engage in behaviors that are common among those around them. For example, if you live in a wealthy neighborhood where everyone is buying new cars, you may feel pressured to purchase one as well to align with the actions of those in your environment. This phenomenon was more pronounced before the rise of social media, as local societal influences had a greater impact during that time.
It is very easy for your neighbor to influence your purchasing decisions. However, these days, social media has amplified this effect. Now, not only can your neighbors affect you, but someone in the U.S can easily influence the decision-making of someone in Africa. This is due to our tendency to compare ourselves to others showcased on social media, which can have a significant impact on our finances. The pressure we face today is greater than ever before. In the past, it was mainly your neighbors who influenced you—a concept captured in the saying "keeping up with the Joneses." Now, that pressure has reached a whole new level.
We spend money we don't have on things we don't need
The pressure to buy unnecessary items can lead to significant financial problems. For many, especially those living in underdeveloped countries, falling into debt can be particularly challenging. In more developed societies where credit cards are common, it's easy to accumulate debt because it may feel like money is readily available. This normalization of debt has reached a point where many people consider it a standard aspect of financial life. In contrast, during the 1990s, individuals were taught to avoid debt at all costs. Today, societal pressures encourage people to take on debt, making it more likely that they will succumb to these influences in our current generation.
More money might not save you
Many people believe that having more money will solve their problems, and some financial advisors suggest that we should create additional cash flow to purchase the things we want without worrying. However, the truth is that more money may not guarantee financial security. A good example of this is celebrities who declare bankruptcy after earning substantial incomes throughout their lives. Despite their wealth, some of these individuals struggle to recover financially and end up broke.
The problem is lack of discipline affects how we spend our money and the things we consume
The pressure that social media places on us is increasing every day, making it difficult to control the amount of content we consume. If you can reduce your consumption and invest the money you save wisely, you're likely to accumulate wealth by the end of your life. The key is to find a way to discipline ourselves regarding what we consume and how we invest, as poor investments can turn a good intention into a negative outcome.
What is your relationship with money
The question you should always ask yourself is: what is your relationship with money? Are your decisions influenced by what you see online or by how you want others to perceive you? If you often make choices based on how you want to be viewed, you may end up consuming many things you don't actually need, which can lead to financial trouble. Living in this era can be challenging, but it's essential to cultivate a healthy relationship with money by practicing self-discipline—consuming less and investing more.
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