You’ve likely heard the quote from American humorist Robert Quillen:
“We use money we haven’t earned to buy things we don’t need to impress people we don’t like.”
Whether or not you’d like to admit it, the guy’s got the point.
To some degree, we’re all guilty of this.
Maybe you can afford to spend on what you’re spending on, but at the root of your decision-making may still be the extreme desire to impress those around you.
So here’s the harsh truth:
No one thinks about you as much as you think about yourself, and no one thinks your material possessions are as cool as you think.
I know this to be true, but that doesn’t mean I don’t occasionally buy clothing, home decor, or other material things, at least partially, to impress friends and family.
As I’ve learned more about personal finance and money psychology, I’ve worked to shift my spending to prioritize things that:
- Make my life better
- Make my loved ones’ lives better
- Make strangers’ lives’ better
Below, I’ll run through two key effects that will help you do the same.
The Spotlight Effect
Consider this scenario:
You’re walking into a party and realize you have a pimple. You can’t help but feel that everyone is staring at you. Not into your eyes or noticing your cool outfit, but directly into the small, red zit on your forehead.
You ask a friend: “Is it that bad? Is it noticeable?”
They tell you: “Not really,” but you’re not sure you believe them. You think to yourself, “They’re just being nice.”
You’ve likely severely overestimated how much others notice you, your appearance, and your behavior.
The Spotlight Effect is a phenomenon uncovered by social psychologists that says just that:
People don’t care or think about us nearly as much as we think they do.
Maybe you’re reading this and feeling a bit bummed, but it’s actually liberating when you think about it.
What if you spent more time, energy, and money doing what you truly wanted to do rather than what you thought others wanted you to do?
What activities, travel locations, hobbies, or material possessions would become unlocked if your main criteria shifted from what “others” want to want you and your loved ones want?
The Person in the Car
Morgan Housel, the author of Psychology of Money, and one of my absolute favorite writers and thinkers, used to work as a valet.
Housel often parked luxury cars like Ferraris, Bentleys, and Lamborghinis at the upscale Los Angeles hotel where we worked.
One day, he noticed something that shocked him. He never looked at the people driving these cars and said, “Wow, that guy’s cool.”
Instead, he would think, “If I drove that car, people would think I’m cool.”
The lesson here is clear: People aren’t impressed by your things.
They may envy that you have them or want them for themselves, but they probably don’t think you’re that cool for having them.
Once you realize that spending to have things that impress people is a losing game, you get to spend on things that you love instead.
Beyond the mentality switch, it’s also a valuable personal finance tactic.
Housel points out that “spending money to show people how much money you have is the fastest way to have less money.”
Maybe the truth isn’t so harsh
Maybe this sort of stuff upsets you. But I hope that it liberates you instead.
Break away from the largely inaccurate idea you have of how much people think about you. Then, design and pursue a life uniquely tailored to your specific preferences.
I don’t know about you, but that sounds a hell of a lot better to me.