Up popped a gchat screen and my friend asking if I had a few moments to answer a money question. Always happy to dish about finances, I obliged. For the sake of her privacy, I won’t get into the particulars, but she had a financial strategy in place and wanted my two cents about whether or not I thought it made sense.
“Are you comfortable giving me your specific numbers?” I typed.
“No, not really.” She chatted back.
Never deterred from a financial conversation, I continued to give her my opinion on the question by working with a hypothetical budget and giving her numbers I felt satisfied the situation. Aka me saying, “You need to have at least $15,000 saved before you consider doing this. If you don’t, then don’t do it.”
About a week later, while chatting with a different friend, the conversation inevitably turned to money (that seems to happen to me a lot). He divulged his savings information and I took pause.
“I tend not to tell people my net worth because I don’t want to deal with their responses,” I told him. “It’s annoying when people feel they can pass judgment on what I can or can’t afford because they have a snap shot of my financial picture.”
The truth is, I usually avoid telling friends my net worth because I never want to hear the expression, “Come on, you can afford it” come out of someone’s mouth.
His curiosity was piqued and, being one of my closest friends, he gently pressed for a little more information.
Finally, I indulged him and provided a reference point. (I hope to one day be able to say: my net worth is Scrooge McDuck diving into piles of gold kind of money.)
These two events have left me wondering at what point, if ever, should we be sharing our financial picture with friends?
While I’m all for ridding our culture of the taboo surrounding money, I still hesitate to share details with friends.
We humans crave a good benchmark. You know the kind that says X percentage of people in Y age group have Z amount of money saved for retirement. You look at that metric and think, “suck it other 25 – 29 year olds! I’m better than 95% of you.” Or perhaps you think, “well, I guess I’ll work myself into the grave.”
Sharing your financial picture with friends in your age bracket, with about the same education levels and/or similar socio-economic backgrounds can feel like you’re all “whipping it out to measure up” – and you know exactly what I mean. This is because money, and our decisions related to money, is often used as a touchstone for our self worth and our intelligence. Not saying that’s right, just saying that’s how it is.
Except, I don’t want it to feel that way with my friends.
Personal finance is intensely personal. How we choose to spend money or save money or invest money or completely ignore money is our decision. I’ve had a lot of advantages bestowed upon me in life for simply being born into my family, with the skin color I have and given opportunities for quality education. Some of these advantages, like graduating college without debt, automatically put me financially ahead. While some of my friends started post-colligate life with -$30,000 or -$60,000 or -$150,000, I left with +$10,000 and kept building from there.
So yeah, when a friend tells me he saved $4,000 or another says she finally started investing or a reader emails to say he just paid down all credit card debt – I’m thrilled for them. I’m not mentally calculating how their accomplishments stack up next to mine, because who knows what could happen? Maybe my heavily invested net worth tanks this year, or I lose my job, or a medical issue arises and I suddenly find myself massively in debt.
To be honest, I don’t have an answer to my own question.
There is value in demystifying finance by being really open in conversations. The more we’re willing to go on record about failures and victories with money, then the easier it will be for everyone to have a high rate of financial literacy. But for the same reason my friend hesitated to share her real numbers with me, I often opt out of getting financially naked with all my friends.
Image from Gratisogrpahy