“Money is a dangerous subject.  Polite conversation avoids it.  You may talk about economics, but not raw money.”  – Max Plowman (1883 – 1941)

People are generally quite gregarious.  We interact all the time and continually seek out the company and approval of others.  We talk about a variety of topics that would have been taboo several decades ago – sex, religion, family matters.

But the one topic that seems to still be off limits is the subject of money – how much you earn, your debt level, the value of your portfolio and other assets.

Related: Why Do We Save?

We’re taught that it’s impolite to talk about how much something cost, or how much money we earn.  It takes guts to initiate any kind of salary sharing conversation in your workplace.

Even during my financial planning sessions with clients, you’d be surprised at how often some crucial piece of information was not offered up even when asked.

Is it the fear of being judged?  We feel it might reveal too much about ourselves if we are too forthcoming.  We don’t want to seem inferior to others.  We don’t want to look ignorant or uninformed.

At the same time we still want to compete with one another and demonstrate our relative superior status.  Money is a standardized metric of wealth, even among complete strangers.  We size people up based on their possessions.  We scoff at people who blow a sizeable windfall.

Finding the average

Rather than analyzing everything meticulously ourselves, we instinctively leverage off the experiences of others to find quick answers and make quick decisions.

We like to see what is average and were we stand.

  • What is the average annual household income? ($48,250)
  • What does the average family spend on food a year? ($7,739)
  • What average percentage of a household budget is spent on clothing? (5%)

We check to see what others are doing and like to compare even though statistics are often for a specific region or entire country and can be quite different to your personal situation.

Related: Why Age-Based Savings Benchmarks Are Dumb, But We Look Anyway

When I lived in Calgary I thought our home was typically average.  When the annual property tax hike was announced, though, I was always in the higher than average bracket.  Conversely, if I was expecting a rebate I was lower than average.  Go figure!

Getting answers from online forums

A lot of people anonymously pose questions on forums and financial sites (e.g. www.asklizweston.com) to get direction.  There is often some good information given for general questions, but consider the source and make sure it’s correct.

Here are some (real) typical questions that were recently asked:

  • How do I get out of debt?
  • How should I invest my bonus?
  • I have 7 credit cards.  One was charged a late fee.  I really need advice.
  • A friend of mine told me he makes a good living off of penny stocks.  Is this a good way for another income?  What are some I should purchase?
  • My portfolio will need some rebalancing and I was wondering where is best to put things.

Why do we think perfect strangers can answer our financial problems when they know nothing about us?

Related: 4 Online Personal Finance Communities Worth Joining

Anonymous advice may not be appropriate for you, and why would you feel safe taking that advice?

Conclusion

While it’s fine to compare yourself to others who may be similar to you, remember that your financial situation is uniquely your own and must be considered as a total package whenever you are seeking advice.

Whether you are open about all your financial matters or like to keep things private is up to you.


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