A Clever Way to See How Your Finances Compare to Your Friends’
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We’re all a bit curious about our peers.
After all, we spend too much time creeping around on social media. You see Beth from high school is married with two kids now. Another quick search reveals Joey just purchased a home.
And you’re over here wondering how you’re going to pay for this month’s of rent and feed your cat.
You so desperately want to know: How are they doing that?
When it comes to financial matters, most of us don’t want to share specifics. Imagine asking Beth how much money she’s making. Or asking Joey how much his mortgage is. Awkward.
But comparing your finances to your peers’ can actually prove helpful. In fact, it could help you save a ton of money.
How Comparing Yourself to Others Can be Healthy — Financially
Imagine you grab coffee with an old friend. You both order a cappuccino at the counter. The only catch? The price isn’t displayed on a menu, so you don’t know how much she paid. You paid $10. Is that fair? You have no way to know.
See where we’re going here? Not being able to compare your finances with others could mean you’re overspending — you just have no idea.
“The world is awash with [financial] data,” Majd Maksad, the CEO of Status Money, says. “You just can’t see it; it’s locked away from its useful purpose of actually helping you.”
That’s why he founded Status Money. It grants users access to this information, and it presents these numbers in a way that’s easy to understand — even for those of us with numerophobia.
Maksad broke down a few ways this can help you:
- Interest rates: If you have student loans, credit cards or any other debt, Status will let you know whether you’re getting competitive interest rates.Maksad cited an example of a Status user who’d been chugging along with student loan payments. When he linked his account to Status, it let him know he was paying too much in interest. He immediately refinanced and has saved a few thousand dollars in a year.
- Spending: Status allows you to compare your spending based on different categories, including restaurants, travel and shopping.If you’re spending more than your peers, it might be time to reel back.These numbers can inform your budget, so you’re not left guessing. Additionally, you can track your problem categories to hold yourself accountable.
- Saving and investing: Maksad uses Status to plan for the future by creating a customizable peer group. (You can do this, too. It’s not just secret CEO stuff.)Say you want to compare yourself to a group that’s 10 years older than you. This will allow you to build a financial roadmap — especially when it comes to saving and investing.
How to Compare Your Finances Without Being Awkward
Money has always been a taboo topic. That’s why you cringed when we played out the diner scenario.
But Maksad aims to change that.
“I genuinely believe, even beyond the fact that my company is doing it, this is going to become the new standard,” he says.
When you sign up for Status, you’ll connect your financial accounts: checking, savings, credit cards, investments, whatever you’ve got.
Once these are connected, Status builds your peer group by analyzing your age, income, location, credit score, housing type and type of location — so you can compare yourself to those who are in similar situations.
You can see how you stack up to your peers in terms of spending, debt, assets, net worth and credit score. You can break down each category further, even seeing how your spending at restaurants compares to your peers.
Honestly, you can spend hours poking around and tapping into all this digestible data.
And, hey, if Status Money can help us save money without extremely awkward conversations, we’re into it.
Carson Kohler ([email protected]) is a staff writer at The Penny Hoarder. She’s always awkward.