The freedom of living in financial truth
When I began serving in stewardship ministry, I frequently met with individuals and couples to review their financial situation. I was constantly amazed at the disconnect between how people looked like they were doing financially and how they were actually doing. Very often, they were driving nice cars and wearing nice clothes. They looked just fine, but they weren’t fine. Most were deeply in debt.
In just about every case, I was the first person they had shared the details of their financial life with. Few of us share the true details of our finances with anyone other than our spouse (and in some cases, people don’t even do that!).
However, in one important sense, we all share financial information all the time. The choices we make — the home we live in, the car we drive, the vacations we take, and all the rest — gives people a sense of how we’re doing financially. And all of us constantly take in this type of information from others.
The problem is, that type of information is often at odds with a person’s true financial condition. You might think of it as fake financial news, and it swirls around us every day, impacting us in ways we don’t even recognize.
It’s a dangerous mistake to assume that people are doing as well as they appear to be doing. We don’t really know how they paid for that vacation, whether they can actually afford the car they’re driving, or how often they argue about money behind the closed doors of their beautiful home.
If we assume we’re making about as much as our friends or neighbors and that it’s normal for someone with that income to drive the sort of car they drive, it can tempt us to try to keep up, even if that means living beyond our means. Sociologist Juliet Schor wrote about this in her book, The Overworked American:
It may be as simple as the fact that exposure to their latest "lifestyle upgrade" plants the seed in our own mind that we must have it, too — whether it be a European vacation, this year’s fashion statement, or piano lessons for the children.
Today, social media has taken this to a whole new level. Most of us don’t intend to use Facebook or Instagram to brag, but we tend to share only the good things we’ve experienced. It isn’t that we’re lying, it’s just that we’re presenting an incomplete picture. Scrolling through the feeds of everyone’s best experiences can leave you feeling like you’re missing out.
Not surprisingly, frequent use of social media impacts people’s use of money. Millennials (people ages 25-34) are especially vulnerable. According to several studies, they spend more time on social media than older generations and are more likely to say they’ve spent money they hadn’t planned to spend because of something they saw on social media.
So, while there’s no evidence that more people are sharing the true details of their financial lives with anyone, it’s obvious that there has been a great increase in the sharing of people’s best experiences through social media, and it’s having a negative impact on people’s financial well-being. In a 2018 Fidelity study, two-thirds of Millennials acknowledged as much.
That’s why, especially today, it can be helpful to have someone in addition to our spouse to share the truth of our financial situation with — a sounding board for accountability, encouragement, new ideas, and to help ensure that our use of money reflects the reality of our financial situation.
Recently, I spent a few days with some good friends I’ve known for nearly 30 years. One of the guys is a successful commercial real estate developer, but I’ve never known exactly how successful he is until this trip. During our visit, he showed us his estate plan. He wasn’t boasting; he was being transparent, inviting feedback, and recommending that we consider using a tool he’s developed that provides a simple flow chart of what will happen to his and his wife’s assets upon their deaths.
Later, prompted in part by his openness, I shared some details about a recent financial decision my wife and I made and asked for feedback. It was so freeing and helpful to be able to talk openly about a topic most of us keep close to the vest.
Who would you consider sharing some of your financial details with? If no one comes to mind, or if you feel hesitant about the idea, that’s understandable. Just think about it, and keep in mind that disclosure tends to beget disclosure. Your willingness to share some details of your financial life may make a friend comfortable sharing some of theirs.
This isn’t just about improving your finances. It’s about living in more authentic community. And today, we could all use more of that.
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Matt Bell is managing editor at Sound Mind Investing, publisher of America's best-selling investment newsletter written from a biblical perspective. Through its newsletter, website, and the small-group study "Multiply," SMI helps people manage money effectively so they can truly live well and give generously.
