You will be able to explain how social comparison shapes spending.
Hui Min and her fiance set a wedding budget last year. Then three friends got married within six months. One held her banquet at a hotel ballroom, one flew everyone to Bali, and one had a photographer whose pictures filled everyone's feeds for weeks. By the time Hui Min sat down with a venue coordinator, her own plan felt small. She came out of the meeting with a quote 40% above the budget they'd agreed on, and she couldn't point to the moment she'd decided to spend more.
Lesson 2.1 showed that people judge outcomes against a reference point. Other people are one of the most powerful reference points there is. Whether your flat, your car, your holiday or your wedding feels good enough depends heavily on what your friends, colleagues, siblings and classmates have.
This idea is old. Economists have written about spending to keep up with the people around you for more than a century, and the phrase "keeping up with the Joneses" comes from a comic strip that began in 1913. What has changed is the number of Joneses. A generation ago you compared yourself with your neighbours and your office. Now you can compare yourself with hundreds of people every day, many of them chosen by an algorithm because their posts get attention.
The comparison works against your own goals because it replaces them. Your budget was set against your income and your plans. The comparison sets a new target, and the new target is someone else's choice, made with their income, their debts and their priorities.
Comparison raises spending most in purchases that other people can see, and in Singapore a few stand out.
Weddings come first, because they're public, happen once and arrive in clusters among friends of the same age. Venue, banquet, photography, gowns and the honeymoon all get compared, and each one feels like a statement about the couple. Holidays are a steady second. When colleagues come back from Japan or Europe with photos, a weekend in Malaysia can start to feel like a failure. Cars are a third, made more visible by how expensive they are here. Homes are the biggest by far: the jump from an HDB flat to a condo, or from a resale flat to a new launch, is often discussed in terms of what friends have done.
The pattern is similar each time. A purchase you'd planned at one level gets raised a step, then another, by comparisons that never appeared in your budget.
The comparison is also unfair to you, because you only ever see one side of other people's money. A feed shows the ballroom, the Bali villa and the new car. It doesn't show the loan behind the car, the credit card balance after the honeymoon, the parents who paid for half the wedding, or the savings that went to zero.
So you are comparing your full financial picture, debts and all, with the highlights of everyone else's. You will lose that comparison most days, and the loss can push you to spend in a way that the people you're comparing with might be regretting themselves.
One habit takes some of the force out of this: name the person, or the group, you're comparing yourself with. Comparison works best when it stays vague, a general sense that "everyone" is having a bigger wedding or going on better holidays. Once you write down "my three secondary school friends who married this year", two things become clearer. Your circle is a small and particular sample, not everyone. And the question changes from "am I keeping up?" to "do I actually want what they chose?"
Hui Min tried it. She wrote down the three friends and what each had spent on. Then she asked herself which of those choices she'd want even if nobody would ever see the photos. The photographer, yes, because she and her fiance both cared about pictures. The ballroom, no. Bali, definitely not. They went back to the coordinator with a plan 10% over the original budget, all of it on photography, which they decided together.
Money Foundations, lesson 4.4, Spending with friends and family without the awkwardness, covers how to say no to a group dinner or a shared holiday without damaging the friendship. This lesson is about noticing the pull in the first place.
Think about who you actually compare your spending with. You're looking for three people or groups, and for one purchase each of them has nudged you towards.
Write the three people or groups you compare your spending with and one purchase each has influenced.
Junxiong-WFG Organisation is an authorised representative of AIA Financial Advisers Private Limited (Reg. No. 201715016G).