Even Adults Need Those “Look What I Did!” Moments
|September 28, 2012||Posted by Roshawn Watson under Personal Finance, psychology|
It is funny how as we grow older, we outgrow many things such as bibs, recess, training pants, and naptime. However, one constant appears to be our need for approval. Even as adults, psychologists note that we have an overwhelming desire to be affirmed and judged competent. What’s interesting are the major implications this desire have to our wallets. While it drives some of us to consume, it motivates others to produce. Today, we look at some different ways our need for approval can affect our wealth.
As we develop cognitively, our self-awareness increases, as does our dependency on the opinions of others. According to research by the late Cooley (1903) and Mead (1934), we begin to construct our concept of self by incorporating the perceived opinions of others into a “generalized other.” We decide whether to esteem ourselves highly or lowly by gazing into a social mirror. The ‘self’ that is reflected back is comprised of what we believe are the collective opinions of others, “the generalized other.” Now, this isn’t necessarily done consciously, so we often don’t realize how much of our concept of self is influenced by our social circles. However, numerous studies suggest that praise, approval, and support from peers, friends, and family members are powerful predictors of our global sense of self-worth. Notably, of all the types of support we can get, approval from others was the most highly correlated with self worth.
Related article: Why You NEED Blow Money
When you live in a luxury house, you are also buying a luxury lifestyle. Included in this lifestyle are the pressures to redecorate frequently, join the country club, and send your children to private schools. Your property taxes continue to skyrocket, along with the cost of utilities and insurance. Plus the prices of nearby services tend to be higher, from grocery stores to dry cleaners. Thomas Stanley
This desire for approval causes some of us to conspicuously consume (spend like money is going out of style) because of what we believe others will think about us for making such purchases. That’s why some of us will opt for the flashier cars or outfits. It is why we sometimes will buy certain homes (surprisingly, it is not purely for the better school districts). In fact, some rich kids and wannabes will even over-disclose details of their excesses to the extent of posting images of their receipts on public websites just to “prove” their fortunate financial status, which is known as “receipt porn”. The status labels are a way of announcing to the world “I’ve made it,” “I’m still there,” or at least “I’m alright”; they allow us to gain or maintain the approval of others, at least temporarily.
I remember watching an episode of the Montel Williams Show where a financial expert blasted a poor kid for having a pair of new and pricey kicks (shoes). His rationale was obvious: the money spent for those shoes could have been put to so much better use elsewhere. The financial expert was VERY indignant about the poor choice. “Why would you purchase this?” he said. Montel responded in a way that I will always remember. He mentioned all of the terrible things that boy had survived; his mere presence, after all of that, was a testimony of his resilience. Although the kid didn’t have much, those shoes provided him the external validation that allowed him to continue holding his head high. Thus, while it was clear that name brand shoes were not necessary, they served as his lifeline to sanity. Dear friend, it is NOT “personal finance” unless it is “personal.”
Related article: Broke People Afford Everything
Of course not all indulgences are bad for your wallet, as we discussed for the last 2 weeks. You don’t necessarily have to give up your lattes to achieve financial security, and your entire financial plan may be in jeopardy if you deprive yourself entirely. Thus, before one can truly determine whether financial pathology is driving purchases, it is important to appreciate the underlying motivations for spending, not just the dollar amounts.
It is not “personal finance” unless it is “personal.”
Of course, everyone is not oriented to conspicuously consume. For example, the majority of the millionaires are relatively frugal, even with respect to the typical American household. Does this mean that they are super human: they are not susceptible to the same desires as nonmillionaires? That’s not even close. Just because most millionaires choose NOT to acquire artifacts simply to denote financial superiority doesn’t mean that their desire for approval wanes. The desire just manifests in a different way.
Related article: When Lattes are Not Your Problem
I believe this desire is often channeled into building. It is not coincidental that most millionaires own businesses, nor is it an anomaly that the top 2 millionaire-producing occupations are professions requiring considerable time to even gain entry into (physicians [10.01%] and lawyers [8.85%]). Being able to build thriving businesses or careers is frequently a source of great esteem for millionaires, just as having designer duds and symbols of high status provide esteem to conspicuous consumers. Unfortunately, this is where the similarities end because whereas the desire for approval increases wealth significantly for the builders, it eviscerates the wealth of the conspicuous consumers.
The link between approval and production in builders is why some become taken aback when they feel they are not being allowed to “own” their victories: diminishing the self-effort and sacrifice involved in creating wealth, businesses, and personal brands is akin to assaulting a critical part of their esteem.
Before one can truly decide whether financial pathology is driving purchases, it is important to appreciate the underlying motivations for spending, not just the dollar amounts.
Just because you no longer hang with your school social circle, doesn’t mean that you are not unknowingly being influenced by a desire for acceptance. Whether the desire manifests in terms of professional competence, heroic efforts on the domestic front (super mommies and daddies), building extraordinary businesses, or altering your attire to present yourself similarly to your peers, it is unlikely that all your actions are indifferent to a social mirror. Rather than allowing this desire to diminish our wealth for fleeting glances of approval, channel it into something productive. The next time you say “Look at what I did,” let it be to announce something significant.
Lastly, if you like this article, please subscribe to my FREE email updates or RSS feed (reader), Retweet it, Like It on Facebook, Tipd it, Fark it, Stumble it, and tag it on Delicious. Also, click here to receive my eBook for FREE.
Image Credit: Pennuja