The Rachel Cruze Show - The Real Reason Everyone Seems Wealthier Than You

Episode Date: December 6, 2024

💵 Start your free budget today. Download the EveryDollar app!    Have you ever compared your old Corolla to a friend’s new Mercedez and felt behind financially? In this episode, find out five common reasons why others may appear  wealthier (even if they aren’t).   Next Steps:  🎥 Watch my video How Do You Compare Financially to the Average American?  📕 Read my book Love Your Life, Not Theirs—now 30% off for 50 Days of Christmas Deals! Connect With Our Sponsors:  🏥 Learn more about Christian Healthcare Ministries.  🔒 Get 20% off when you join DeleteMe.   Listen to More From Ramsey Network:  🍸 Smart Money Happy Hour  🎙️ The Ramsey Show    💸 The Ramsey Show Highlights  🧠 The Dr. John Delony Show  💰 George Kamel  💼 The Ken Coleman Show  📈 EntreLeadership    Ramsey Solutions Privacy Policy  Learn more about your ad choices. Visit megaphone.fm/adchoices

Hey, you guys, do you ever look around and just feel like, God, everybody around me feels wealthier than I am? Well, if that's you, today I'm going to share some common reasons why we might feel this way. Plus, I'll share proven ways to combat this feeling and keep your focus. But before we get started, be sure to subscribe so you'll never miss an episode. All right, if you know me, you know that I talk about comparison culture a lot. And I think it's on my mind often, because you're not. because I see it challenging us in new ways all the time, right? When we were young, it may have been like American Eagle or Hollister t-shirts that you see. But now it's like a $50,000 car that you see your neighbor driving. So the price seems to have gone up when it comes to our comparison, and it's constantly interrupting us through social media and advertising. And again, it's not making any of this easier. So let's have a little level set for a second.

According to the U.S. Bureau of Labor Statistics, the average salary in the U.S. during Q4 of last year was just below $60,000. So if you're close to the national average, that means two things are true. Number one, you are normal. And number two, most people are in the exact same boat as you. Which brings me to reason number one, comparison culture is making us feel behind is because most people are using debt to get ahead. And it can feel like everyone around you has like a new trendy thing all the time or golly, they're doing all this stuff like vacations or they're going out to great dinners or it feels like they're traveling a lot.

And that can feel so, so normal. But what do you have to realize is statistically speaking, we are seeing debt of all kinds are on the rise. So that's credit cards, car loans, personal loans, helocks. We are seeing people borrow money more than ever before. Now, yes, we are in a tough economy right now with high inflation. And so some people are using it to cover basic necessities for sure. But also our lifestyle and the standard of living that we have in America today is pretty dang high.

And so for the average American to be able to cash flow and support what we see as quote unquote normal is really difficult. So if you're seeing people going above and beyond, they possibly, possibly could be using debt for that. The second reason you might feel like you're making less than everyone else is maybe you are. You know, sometimes it's a false sense of comparison because genuinely you might be making less than the person you're comparing your life to. And this isn't necessarily a bad thing, but if it's a problem in your budget, then you have a couple of options. Number one, you may have to increase your income, right?

If there's a certain level you want to be living, but you're not making that income, then your income needs to increase. And so whether that's side hustles, working overtime, or, you're not. even getting a raise at your current job, whatever it looks like increasing your income is going to be important. But then also lowering your spending. And so if you want some margin, because you're not making as much as the person next to you, when it comes to your expenses, this is going to be really crucial. You're going to have to go through and really, really look at where you're spending your money and where you can actually be more purposeful and say, hey, I'm actually going to spend X

amount at the grocery store. I'm not going to go out to eat as much as I was. I'm going to cut subscriptions that I'm not using. You know, I'm going to do these things to be able to create margin on the expenses side. And kind of like what we said earlier, but I think there's something important to be said about adjusting your expectations. So if you are average and you're making $60,000 and you're comparing your lifestyle to someone that's making 120, they're making double what you're making. So your lifestyles are going to look different. So to get that margin, lowering your expenses is going to be really crucial. The third reason you might feel behind is because of unseen factors. So what do I mean by this? Well, maybe you're paying for child care,

but the person you're comparing your life to, grandma watches the kids, right? And so they're saving three, four thousand dollars a month on child care because they have free child care. Maybe their spouse is working and yours isn't, so they have a dual income coming in. Maybe they've paid off their student loans and they don't have that leaving their income and you still are paying your student loans. You know, it could even be family money, right? I mean, like, who knows? But these unseen reasons you have to understand is a reality.

So I think it's really important, again, because you have to know when you're comparing your life to someone else's, you have no idea from a 360 picture what's going on. Again, maybe they're making way more than you think that they're making or maybe they're borrowing way more than you think they are. But whatever it is, there are unseen things happening, and so take that into account. All right, reason number four,

feel behind financially is because net worth is invisible. So some people may be prioritizing daily luxuries, right? So whether it's, you know, shopping or vacations or going out to eat, like whatever it looks like that you're seeing is, oh my gosh, they must have so much, they may be putting all of their income to that and none towards savings or investing, where you might be working to get out of debt so your income's going there instead of a nice purse. Maybe you are investing money into retirement, so yours is going there and not a vacation at the moment. So whatever it looks like, when you are really being wise with your money and you're planning long-term goals and you're actually fulfilling those, that means your money is being pushed

out to the future and it's not present. But for a lot of people, they aren't investing in retirement. A lot of people are not trying to pay out debts. They're not saving up an emergency fund. They're just spending what they have. And so their present money, is going to look like they have more, when in fact, net worth-wise, you could have more. Isn't that crazy? It may not look like it, but whether you're paying extra on your house

and you have more equity, again, maybe you have investments, you don't have any debt, like you're doing these things to put yourself in a great financial position. From a net worth perspective, you may have a lot more net worth, and there's actually, could be negative,

but it doesn't look that way. So your net worth is invisible. Remember that. And the fifth reason you could feel behind is that you don't have clear goals guiding you. And what I mean by this is when you have something that you're shooting for and you're like, okay, this is my next step or I'm going to try to do this and this and this. And you kind of have this guide with your money beyond just everyday expenses,

but you know, hey, long term, this is what I'm going to do. You're really focused on your money there. And the exciting thing is hopefully it's going to bring you joy to know that you're putting your money in places that you want to put it. But if you don't have goals guiding you and that you're not, motivated in a certain way, it's going to be even easier to fall into this comparison trap. Because if you're kind of just living and going and you don't really have direction with your money, feels like any picture or any conversation your friend has with you could really take you and spiral you

all the way thinking, oh my gosh, like look at what everyone else is doing. But when you're like, no, we're going to save up for that new car and pay cash for it, or we're going to, you know, try to go down this trip for anniversary next year or whatever, fill in the blank. And you have a goal that you're saving towards and you're focused on that, that's going to really still give you direction versus just hearing or seeing people do stuff and thinking, oh my gosh, look at what all they're doing because you're not making progress with your money. So money goals are so crucial not only from a tactical standpoint, but also from a heart and motivation standpoint.

And always remember that comparison is the thief of joy. It is a liar as well. Because when you compare your internal money struggles to someone else's external status symbols. It is never a fair assessment. Okay, so give yourself a lot of grace and always remember what I see may not always be the full picture. Now, I wrote about comparison because it is something that I've always kind of struggled with. I'm always looking around, whether it's mom comparison, career comparison, life comparison. I mean, you fill in the blank, Rachel has been through it. That learning that contentment is so key, not just in your financial journey, but for you as a

person overall, is really important. And so I wrote a whole book. on this called Love Your Life, Not Theirs, and for right now, it's 30% off for our 50 days of Christmas deals. So I'll put a link below, make sure to check that out. And sometimes it can be helpful to gauge how you're pacing with the average American. So if you need a quick checkpoint, check out my episode on how do you compare financially to the average American coming next. And share this with a friend who may need some encouragement. All right, you guys, remember to take control of your money and create a life you love. have.