You’re sitting across from a longtime friend at the local diner. You catch up on life, then, because you’re curious, you ask about her income, her student loan debt and her savings.
How many of you just cringed?
Most of us don’t have friends — or even family members — who are willing to explicitly share these numbers. 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
You’re back in the diner with your friend. Before hounding her with those financial questions, you both order a cup of coffee 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?
“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 (firstname.lastname@example.org) is a staff writer at The Penny Hoarder. She’s always awkward.
This was originally published on The Penny Hoarder, which helps millions of readers worldwide earn and save money by sharing unique job opportunities, personal stories, freebies and more. The Inc. 5000 ranked The Penny Hoarder as the fastest-growing private media company in the U.S. in 2017.
Powered by WPeMatico