Money can make us feel wretched if we let it. It can do things it’s not supposed to. It can tie our stomach in knots as we tally up debts or ruminate on losses. It can punch us in the gut when we least need it.
Yes, an excessive focus on our finances can do more harm than good. But it’s not just focusing on our own finances that does harm; it’s focusing on others.
The Internalisation of Envy
There’s an old tale about a frog and a firefly by José Ingenieros. A frog sees a firefly dazzling on top of some reeds and works itself into an uncontrollable state. Eventually, seeing no other alternative, he jumps on top of the firefly and covers it with his cold belly. The innocent firefly then asks the frog, “why do you cover me?”. The frog responds simply: “why do you shine?”
Envy can make us do stupid things and take stupid decisions. But most of the time we can’t act out like the frog. We can’t jump on top of a neighbour because they’ve just bought a shiny new sports car. We can’t gag a friend to stop them talking about their latest promotion.
Instead, our envy triggers an internalised response, which brings about a unique and potent set of emotions. Results of a brain-imaging study published in Science in 2009 even suggest our neurological response to envy can flare pain nodes in the brain’s dorsal anterior cingulate cortex. Cutting the neurological jargon, that means envy might quite literally be agonising.
Of course, money is high on the trigger list of these pain points. When we get caught in the clutches of financial envy, those pain nodes are particularly prone to flaring up.
But we do ourselves no favours once it comes knocking. We reinforce financial envy by telling ourselves brilliant, gripping stories – stories which over millennia, we’ve become adept at telling. More often than not, we do so in the absence of hard facts.
Envy without information is an ingenious mental device we’ve fostered to make ourselves unnecessarily miserable. We’re capable of taking even the smallest external observation and creating a compelling story.
When it comes to money, this storytelling can perhaps be better termed lifestyle and experiential envy. It means, in short, that we can find ourselves assigning wealth to lifestyles and experiences we observe. If we see a colleague has upgraded their car or booked a luxurious holiday retreat, for example, we might create ideas about their wealth, unsubstantiated by facts.
Perhaps those on top of their personal finances are thinking they’d rather take better experiences at less cost, but it’s easy to see how this form of financial envy can quickly spiral.
Observations on lifestyle and experiences can provoke questions and thoughts like: ‘Aren’t they lucky to have the spare cash to go on that holiday?’ or ‘They must be earning more than me if they can afford that…’
The truth, of course, is that these stories are almost always nonsense. They rarely serve a purpose beyond lighting up those pain nodes. But such is the compelling internal narrative we write, we tell them to ourselves time and time again.
The Warped Logic of Financial Envy
That’s envy of the unknown, but what of financial envy of the known?
We reserve fact-based financial envy for those we judge to be comparable and figures we judge to be attainable. In other words, instead of directing our financial envy towards Bill Gates, we direct it towards our next-door neighbour, colleague or friend. Most of the time, our envy sits firmly within our peer group.
‘Beggars do not envy millionaires, though of course they will envy other beggars who are more successful.’Bertrand Russell
There isn’t much logic to this. Why is financial envy more potent if we know somebody or if we deem their position more attainable? What difference would the £5,000 more your colleague is earning per year really make? Why is our envy relative?
Psychologists call this positional bias, and it’s demonstrably powerful. One study from researchers at the University of Texas found that participants preferred a larger relative income to an absolutely larger, but relatively smaller income.
Such is the psychological power of our comparisons, we can land in illogical territory in absolute terms. Evolutionary psychologists say this is all a question of whom we believe we are in direct resource competition with. It’s a long held ancestral instinct, they argue, to compete for food, water, shelter and mates with our nearest competition.
But in the case of financial envy, this skewing of perspective simply isn’t evolutionarily fit for purpose. In fact, it’s one of the reasons for economists coining the term relative poverty: where we seem to be satisfied with our incomes only if we’re better off than those with whom we compare ourselves. We need an upgrade.
The Comparison that Really Matters
We compare, and we want more. Financial envy is the so-called hedonic treadmill in action.
Of course, it’s not necessarily a bad thing to drive for more. That assessment depends in part on your financial situation. But nothing positive will come from telling yourself stories or envying your peers’ wealth. The only real comparison that matters is with yesterday’s you.
When we talk about money, tracking your wealth is a superb way to train your mind to resist the comparisons. It can fine tune your focus, blurring the peripheral noise. It also provides structure to compare to yesterday’s you.
But by far the single best antidote for financial envy is a plan of your own. I’ve felt that first hand. Over the last year, as I’ve cemented my plans for financial independence, I’ve experienced a complete evaporation of financial envy. In truth, the knowledge that I have a plan has transformed my attitude to money. I have my own path. I needn’t get sucked into comparisons or internal storytelling.
Being on the Receiving End
But I don’t live in a cave – or plan to live in a cave for that matter. Inevitably, that means like everyone else I find myself exposed to financial envy from time to time. Though I live and earn modestly, sometimes I’m confronted by the green-eyed monster in others.
So how should we deal with it?
Most people won’t expressly tell you they’re unhappy you’re doing well for yourself, though it may be blindingly obvious. Human beings get envious – it’s natural. Effective responses to envy recognise we’re human beings and don’t patronise.
I’ve found a good approach is to shift the focus to the positive things they’re doing. Redirect their attention where it needs to be. How do they compare to yesterday’s them? That’s more of a tongue teaser than I’d anticipated, but it’s the important question we should all ask ourselves. Sometimes people just need a little coaxing to get there.
In Defence of Observation
Perhaps only love can wield the swords of envy and jealousy with more force than money. Our financial envy can break us. Our stories and our comparisons can eat us from the inside.
But there is a marked difference between envy and observation. We mustn’t become so fearful of looking up to the horizon that we walk straight into a lamppost. We mustn’t become so self-focused that we miss external opportunities to improve our wellbeing or even our financial status.
The real question is what we do with our observations. How we digest our external information matters. When we take observations as learnings, the information we gather can propel us to new heights. When we take observations as hollow comparisons, they can chew us up and spit us out.
The next time you feel the green-eyed monster taking hold, ask yourself this: What can I learn from this person’s success? Is how I’m feeling logical? How do I compare to yesterday’s me? And what of that plan of my own?
If your answer to the last question is that you don’t have one, make one. You might just find it tames the monster for good.