WHEN I WAS a child growing up in Ohio in the 1950s, my two best friends were Tommy and Terry. They were brothers who taught me a lot about life. When I was nine years old, they showed me how to smoke a cigarette. They also taught me what the middle finger was all about. Okay, some of this stuff wasn’t what you’d want your child to know. But they also helped me learn an important lesson about money.
One day, we were playing baseball in my parents’ backyard and we broke the next door neighbor’s basement window. Our parents decided we kids should forfeit our allowances to pay for a new window.
I was okay with that—until I found out that Tommy and Terry were getting 50 cents a week and I was only getting 25. I was livid. All of a sudden, my life was turned upside down. Since I just broke the neighbor’s window, I didn’t feel I could ask my parents for a bigger allowance. I probably also knew trying to get a 100% raise was a nonstarter.
As a child, I never fully understood why my friends received more money. I just wished I’d never found out about it. One result: I made a concerted effort over the years to avoid knowing my coworkers’ salaries.
Many years later, however, a gentleman named Bob was hired into my department. Bob was not shy about discussing his salary with his coworkers. When people found out how much he was making, many became dismayed and angry. It got so bad that our boss had to request that our yearly performance and salary reviews take place early—ahead of the company’s scheduled date. I found out that day at work that I wasn’t the only one who is better off not knowing what his or her coworker is making.
We tend to judge how well we’re doing by using human benchmarks: the success of our coworkers, friends and family. These are people who we feel we have something in common with. We’re disappointed when our salary or net worth doesn’t match or exceed theirs. The problem: If we think this way, we’ll always be dissatisfied with our financial life, because there will always be someone who’s doing better.
Instead, the true benchmark against which you should gauge your financial fitness is yourself. It’s how you feel about your finances that counts. If you’re living a comfortable life with no major financial issues and you’re satisfied with your salary, that should be enough—and you shouldn’t worry what your friends or coworkers have or earn.
After 40 years, I had an opportunity to talk to Tommy and Terry. Tommy went on to have a successful career. He’s now retired and spending a lot of time on the golf course. Terry, who served in Vietnam, is also enjoying retirement. We reminisced about the good and bad times we had together. But not once during our conversations did the allowance debacle enter my mind. What seemed such a big deal back then seems so insignificant today.
Dennis Friedman retired from Boeing Satellite Systems after a 30-year career in manufacturing. Born in Ohio, Dennis is a California transplant with a bachelor’s degree in history and an MBA. A self-described “humble investor,” he likes reading historical novels and about personal finance. His previous articles include Are We There Yet, Healthy and Wealthy and After You. Follow Dennis on Twitter @DMFrie.