Written by Andreas Jones, Financial Coach
Andreas Jones is well-known when it comes to Personal Finance and Frugal Lifestyle. He is the founder of KindaFrugal.com, an online blog and learning platform, the author of the book Financial Dignity, published in 2025, and the owner of the Well and Wealthy newsletter.
It is easy to fall into the trap of feeling like you’re lagging behind financially. You scroll through social media, see friends buying homes, taking luxurious vacations, or starting successful businesses, and suddenly, you’re hit with a wave of anxiety. “Am I behind?” you wonder. “Should I be further along by now?”
Let me tell you something, you’re not alone in feeling this way. More importantly, you’re probably not as behind as you think you are. In this article, we’re going to dive deep into why you might feel financially behind and why that perception often doesn’t match reality. We’ll explore the psychological and societal factors at play, and I’ll share some insights that might just change your perspective on your financial journey.
The cycle of fear: A financial trap
Let’s start by talking about fear. Fear is a powerful emotion, and when it comes to finances, it can create a vicious cycle that impacts both our decision-making and our perception of our financial status. Here’s how the cycle typically works:
You feel anxious about your financial situation.
This anxiety leads you to make impulsive decisions or avoid making decisions altogether.
These actions (or lack thereof) often result in suboptimal financial outcomes.
The suboptimal outcomes reinforce your initial anxiety, making you feel even more behind.
The cycle repeats.
I’ve seen this cycle play out countless times, both in my own life and in the lives of others. For example, I once had a client who was so paralyzed by the fear of making the wrong investment that she kept all her savings in a low-interest savings account for years. By the time she came to me, she felt hopelessly behind her peers who had been investing in the stock market. The irony? Her fear of falling behind had actually caused her to miss out on potential growth.
Breaking this cycle requires awareness and a shift in mindset. Remember, fear is often based on perception rather than reality. By understanding this, you can start to make more rational, long-term-focused financial decisions.
Related article: 3 Steps to Mind the Gap and Unleash the Power of Your Money
Invidious comparison: The thief of financial joy
Now, let’s talk about a concept that’s at the heart of why many of us feel financially behind: invidious comparison.
Invidious comparison is the act of comparing oneself to others in a way that breeds resentment or discontent. It’s not just about comparing; it’s about comparing in a way that makes us feel inadequate or inferior.
In the context of finances, invidious comparison might look like:
Feeling down because your coworker just bought a house while you’re still renting.
Beating yourself up because your college roommate started a successful business while you’re in a 9-to-5 job.
Feeling like a failure because your sibling is debt-free while you’re still paying off student loans.
The problem with invidious comparison is that it’s often based on incomplete information. We see the highlight reel of others’ lives and financial situations, but we don’t see the full picture. This leads us to make unfair comparisons that don’t serve us.
Conspicuous consumption: The illusion of wealth
Closely related to invidious comparison is the concept of conspicuous consumption. This term, coined by economist Thorstein Veblen, refers to the practice of buying expensive items to display wealth and income rather than to cover actual needs.
In today’s world, conspicuous consumption is everywhere. It’s the designer handbag, the luxury car, the extravagant vacation photos on Instagram. And it can seriously skew our perceptions of wealth and success.
Here’s the thing: what we see others consuming is often not an accurate reflection of their financial health. In fact, many people engage in conspicuous consumption at the expense of their actual financial well-being. They might be drowning in debt or living paycheck to paycheck, all while maintaining the appearance of wealth.
I once worked with a couple who seemed to have it all, designer clothes, a fancy car, regular exotic vacations. But behind the scenes, they were stressed and unhappy, struggling to make ends meet because of their lifestyle inflation. Their story is a powerful reminder that appearances can be deceiving when it comes to finances.
The truth about finances: People lie
Let’s be real for a moment: people lie about money. They exaggerate their income, downplay their debts, and present a financial facade that doesn’t match reality.
Why do people do this? There are several reasons:
Social pressure: There’s often a societal expectation to appear successful.
Shame: Many people feel ashamed of their financial struggles and try to hide them.
Competition: In some circles, there’s a keeping-up-with-the-Joneses mentality that encourages financial fibbing.
Insecurity: Some people lie about their finances to boost their own self-esteem.
Understanding that people aren’t always truthful about their finances can help you take the financial success stories you hear with a grain of salt. It’s not that everyone is lying, but it’s important to remember that you’re often not getting the full picture.
Related article: 5 Tips to Level Up Your Finances in the New Year
The Instagram effect: Filtered finances
Social media, particularly visually driven platforms like Instagram, has taken the concept of conspicuous consumption to a whole new level. I call this “The Instagram Effect.”
On these platforms, we’re bombarded with images of picture-perfect lives and seemingly effortless financial success. It’s easy to fall into the trap of thinking, “Everyone else has it figured out. Why am I struggling?”
But here’s what you need to remember: social media is a highlight reel, not reality. People share their best moments, their biggest wins, their most impressive purchases. They rarely share their financial struggles, their money mistakes, or the less glamorous aspects of their financial lives.
I’ve had countless conversations with clients who feel inadequate because of what they see on social media. One young professional I worked with was considering taking on significant debt to fund a lifestyle she couldn’t afford, all because she felt pressure to keep up with the images she saw on Instagram. It took some serious reflection and reality-checking for her to realize that chasing a curated image wasn’t worth compromising her financial health.
Small sample sizes and survivorship bias: The hidden distortions
When we look at the financial success stories around us, we’re often dealing with small sample sizes and survivorship bias. Let me break this down:
Small sample sizes: The group of people whose finances we’re aware of, our friends, family, and coworkers, represents only a tiny fraction of the population. It’s not a representative sample, and drawing conclusions from it can be misleading.
Survivorship bias: This is the logical error of focusing on people or things that “survived” a particular process while overlooking those that didn’t. In the context of finances, we often hear about the successes, the entrepreneur who made it big, the investor who picked the right stocks, but not about the many who tried and didn’t succeed.
Together, these factors can create a distorted view of what financial success looks like and how common it actually is. It’s important to remember that for every financial success story you hear, there are countless untold stories of struggle, setbacks, and perseverance.
Unlimited metrics of success: The comparison conundrum
In today’s world, there seem to be unlimited metrics of success, especially when it comes to finances, income, net worth, investment returns, homeownership, entrepreneurship success, early retirement, the list goes on and on.
With so many possible yardsticks, it’s easy to feel like you’re falling short. You might be doing well in one area but feel behind in another. This abundance of metrics can lead to confusion and a constant feeling of inadequacy.
The truth is, financial success is not one-size-fits-all. What looks like success for one person might not be the right path for another. Your financial journey is unique, and it’s important to define success on your own terms rather than trying to meet every possible metric.
The hedonic treadmill: Why more isn’t always better
Have you ever noticed that the excitement of a pay raise or a big purchase tends to wear off pretty quickly? That’s the hedonic treadmill at work.
The hedonic treadmill, also known as hedonic adaptation, is the tendency of humans to quickly return to a relatively stable level of happiness despite major positive or negative events or life changes. In the context of finances, this means that as our income or wealth increases, our expectations and desires rise in tandem, resulting in no permanent gain in happiness.
This phenomenon can contribute to feelings of being financially behind because we’re constantly chasing the next thing, the next level of income or wealth, thinking it will bring lasting satisfaction. But in reality, we adapt to our new circumstances and soon find ourselves wanting more.
Understanding the hedonic treadmill can help us break free from the constant pursuit of more and instead focus on finding contentment and value in our current financial situation.
3 key reminders for your financial journey
As we wrap up, I want to leave you with three essential reminders to help you maintain perspective on your financial journey:
Your journey is unique: There’s no one-size-fits-all path to financial success. Your journey is shaped by your individual circumstances, goals, and values. Embrace your unique path rather than trying to follow someone else’s.
Progress, not perfection: Financial wellness is about making consistent progress, not achieving perfection. Celebrate your small wins and learn from your setbacks. Remember, even small steps forward are still steps in the right direction.
Focus on what you can control: Many factors affecting our finances are outside our control, the economy, market fluctuations, unexpected events. Instead of worrying about these, focus your energy on what you can control: your spending habits, your savings rate, your financial education, and your long-term planning.
The power of gratitude
As we conclude, I want to emphasize the importance of gratitude in your financial journey. It’s easy to get caught up in what we don’t have or haven’t achieved yet, but taking time to appreciate what we do have can significantly shift our perspective.
Practicing gratitude doesn’t mean ignoring your financial goals or challenges. Rather, it’s about finding balance, acknowledging where you want to go while also appreciating how far you’ve come.
Remember, feeling financially behind is often more about perception than reality. By understanding the psychological and societal factors at play, you can start to see your financial journey more clearly and compassionately.
You’re not behind. You’re exactly where you need to be on your unique financial path. Keep learning, keep growing, and, most importantly, be kind to yourself along the way. Your financial journey is a marathon, not a sprint, and every step forward is progress to be proud of.
It might take time, but it’s the gift that keeps on giving. Take a look at my blog for more life-changing ideas! Cheers!
Read more from Andreas Jones
Andreas Jones, Financial Coach
Andreas Jones is well-known when it comes to Personal Finance and Frugal Lifestyle. After struggling with debt and financial shame, Andreas created strategies to dramatically improve his financial well-being. He has since dedicated his life to helping others achieve financial independence while enjoying life today. He is the founder of KindaFrugal.com, the premiere blog and digital learning academy with students in 195 countries. His mission: everyone experiences Financial Dignity.
