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What We Learned by Being Open with Our Friends

This article was written by in Family and Life. 24 comments.

I’ve never been squeamish talking about finances with friends and acquaintances (partly, I suspect, because of my lack of an internal dialog filter), but I have learned over time that not everybody else is as comfortable as I am, so I try not to use too many specifics when having financial discussions.

However, I think personal finance is one area where your friends can provide a lot of insight and assistance, in essence, be particularly friendly. An interesting thing happened on a Web forum where I hang out. The active population is in roughly the same age range, but we have varying demographic backgrounds. A thread came up about discussing your income and after a few issue-skirting posts to the thread, someone actually came out and described their financial situation in a nutshell, numbers intact. Then the floodgates opened and everybody else added their own.

This is by no means scientific, but I gleaned a few data points from the discussion:

  • It’s possible to earn more than me and still be unhappy with your income
  • Alternately, it’s possible to earn significantly less, and still be in better financial shape than I am
  • Ambition and perception can lead to a higher salary, regardless of what I might think a person’s job is “worth”
  • Compared to the vast majority of residents of Earth, we are filthy stinking rich
  • A lot of us have no retirement plan, since we spent most of our 20s simply keeping ourselves housed and fed
  • People with college degrees get paid more, even if the degree isn’t applicable to the job in question
  • To earn what I am earning, I should probably be working a lot harder
  • Salary isn’t everything

Have you had similar conversations with friends of yours? What did you learn?

Published or updated May 27, 2008.

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About the author

Smithee formerly lived primarily on credit cards and the good will of his friends. He is a newbie to personal finance but quickly learning from his past mistakes. You can follow him on Twitter, where his user name is @SmitheeConsumer. View all articles by .

{ 9 comments… read them below or add one }

avatar 1 Anonymous

I learned that:

– Who you know matters more than what you know. But you can strive to know more people.
– Most people are frightened.
– Most people are ignorant about a lot of things (including me and you!).

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avatar 2 Anonymous

i’ve learned not to think i am getting way behind my friends monetarily, because often what appears to be the case is not…basically, keep your own house in order and don’t worry about others.

i’ve learned that many sayings I don’t really like are very true:

Life isn’t fair.

It’s better to be lucky than good.

“i just have to look good i don’t have to be clear” – line from Don Henley’s “All she wants to do is dance”….

Now listen here. It’s not what you are, ya see, it’s how ya dress
‘Cuz that’s one thing I learned from these guys, I must confess
Now me look, I got this job not just bein’ myself, huh!
I went out I bought some brand new shoes
Now I walk like someone else, hey!

-line from Van Halen’s “inside”

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avatar 3 Anonymous

I’ve learned that friends with way more money than us can still spend like he– and still not be happy. We’re probably the poorest of our friends – many of whom are seeing salaries over $200k/year. We’re not exactly poor, but we can’t afford to spend money like a drunken sailor, either. Our friends are buying houses, second houses, boats, trucks to pull boats, etc. The funny thing is how much they complain about paying taxes. Personally my husband and I bank our money cause we don’t want the maintenance required of a lot of toys. I never complain about paying taxes, eventhough, I’m hitting some higher brackets. I guess when you see your investments rising as opposed to property which isn’t as salient then you have no problem paying those taxes.

And, yes, many of these people who earn more than us are unhappy with their wages. But we aren’t – probably cause we don’t know how to spend it all – stupid us – LOL!

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avatar 4 Anonymous

I just wanted to say how cool it is that Flexo posts their net worth on this site. You see him going from 13,000 in 2003 to 150,000 in 2008. Thats over $100,000 saved up in 5 years. It sets a good example and lets me know what I am capable of doing.

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avatar 5 Anonymous

i loved your data points.

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avatar 6 Anonymous

Can you share the name and a link to the web forum in question?

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avatar 7 Smithee

I’d better not, just to be safe.

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avatar 8 Anonymous

Expenditures do rise with income. I’ve learned that. But I’ve also learned that a simplified life is less stressful. Simplification means owning less things. Owning less things means buying less and/or selling/recycling/tossing out old stuff.

Forcing yourself to save before you spend is the key. That’s what’s great about 401K’s. You get used to living with what you can touch and the 401K is off-limits. Saving a lot in retirement is possible with discipline. I’m almost 37 and have about $210 K in my 401K. When I was 27, I had $16,000. I am single, so it’s been easier to save than for somebody with a family, but I just finished paying $22,000 in student loans from undergrad and I put about $16,000 towards my MBA.

I would consider divulging my full financial info with others who did the same, but the problem there is that it can create resentment and actually demotivate you. However, (if allowed), there is power in employees of the same company sharing their salaries so that they can make sure their company isn’t ripping them off. As for people in their 20’s not saving, it is because prior generations have made it difficult to get decent jobs and affordable housing and to pay off our student loans.

I plan on going on my own in a few years, not working for others. I just want to save up some more first. Nothing is more motivating than working for yourself and being in control of the situation. You have nobody to blame but yourself if you fail, (although bad luck doesn’t help).

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avatar 9 Anonymous

Your post is a hilarious example of what we go through all the time. People seem incredibly more apt to offer advice on our sex life than to talk finances with us. It seems to me that what used to be heard in hushed tones (ie, adult jokes) is now replaced in hushed tones with finances. What’s the big deal? Nearly every person in America is in the top 10% of wage earners in the world. It’s time we got over ourselves.

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