The reality is that even if you know someone personally, you don’t know every facet of their life. You don’t understand everything they have gone through.
One of the easiest things to do is to judge another person. People do it all the time, sometimes without even knowing it. Some say that an interviewee only has 30 seconds to give a good impression, otherwise they're toast. If you meet someone in the supermarket who seems angry, that person can easily be labeled as an angry and mean person. If you find someone on the Internet whose opinion differs from yours, you almost can’t help but question their intelligence.
As I’ve spent the last couple of years working with people on their finances and writing about them, I’ve realized that we also do the same with money.
The funny thing is that, for the most part, someone else’s financial decisions don’t affect us at all — the exception being when it is someone close to us like a family member or friend who we are dependent on or who becomes dependent on us. So why do we do it?
Goals, personalities and experiences
When I started an internship in financial planning, I learned very quickly that there are many people out there who don’t share the same views I do about money. Some of the people I met with didn’t seem to value it as much as I did, and others seemed to be so stingy that I just couldn’t understand how they could enjoy it. But what it came down to is that these people all had different goals, personalities and experiences.
Personally, I love to travel. So when planning my retirement, I want to make sure there is enough money available so I don’t have to scrimp and save to do that. Personally, I want to be able to afford a spontaneous lifestyle, but some people just don’t enjoy traveling. They tend to have a more homebody personality and therefore have different goals.
During my internship, it was hard sometimes to resist the urge to be like a mom trying to get her toddler to try a new food. “Just try it! I know you’ll love it, and you’ll be so grateful that I made you try it.”
Some people grew up in a situation where they weren’t taught about money. Some people grew up in a home where parents didn’t make good money decisions and their unfortunate children simply don’t know any better. Although it’s true that they are responsible for their own decisions when they become adults, they don’t know what they don’t know. It’s important, therefore, to refrain from being quick to judge when we meet people whose decisions differ from ours simply because they are, well, different.
Not knowing the whole story
During my experience in financial planning, I've also run into people who were neck-deep in credit card debt. Because of my experience, I’m a huge proponent of the responsible use of credit cards, but there have been times when I had to restrain myself from yelling, “What were you thinking?!” As we continued to talk, though, a lot of them had legitimate problems that were outside their control — unemployment, medical bills, disability, etc. By nature, they were actually quite frugal. It just didn’t look like it on the outside.
The reality is that even if you know someone personally, you don’t know every facet of their life. You don’t understand everything they have gone through. It’s often wise then to withhold judgment and remember that even though not all of the decisions we and other people make are rational, there is a reason.
When it’s good to judge somebody
There are times, however, when judgement is important, even vital, to your own finances, principally when their decisions start affecting you. For example, if you are trying to quit drinking alcohol, it’s generally not considered wise to hang out at bars or with friends who are going to encourage you to drink.
You also don’t want to co-sign on a loan for someone who you know is not a good credit risk, making it so you end up getting stuck with those payments. In situations where family and close friends are involved, it is important that you understand that your love for them is not diminished by your unwillingness to sacrifice your own financial security for their irresponsible behavior.
Why you shouldn’t judge most of the time
In most cases, when you judge other people based on their financial decisions, you’re just being a hypocrite. In fact, if someone else were to examine your spending, they might find areas where you either waste money or are ridiculously cheap. Of course, each of us would probably rationalize why our decisions are OK but someone else’s decisions aren’t. Some people think that spending money on traveling is extremely wasteful, but they spend $300 a month going out to eat. It’s important that you don’t assign your values to other people. We all have our preferences and we live in a society that allows us to choose how to live our lives.
This world needs a lot more positivity in it. When we judge someone because of their spending habits, we automatically add more negativity to that relationship, and it’s hard to erase. I’ve developed great relationships with people who originally irked me with some of their money habits, but it was hard for me to overcome that negative impression I had of them. With some people, that negative impression never went away. I could be missing out on a very positive and meaningful relationship.
It’s important to remember that personal finance is personal. Judging someone else’s habits can make us feel better about our own bad habits, but it’s really just decreasing the likelihood that we will take action in changing ourselves.