Ego Debt: The Price of Trying to Keep Up

It's Monday, FinanceHeirs!

Just because I work in finance and am financially secure today doesn’t mean I come from money.

I didn’t inherit wealth. I grew up lower middle class, and the security I have today didn’t happen overnight.

When you’ve worked in finance for over two decades and spend your time teaching people about money, it’s easy for others to assume you’ve always had it figured out.

But that’s not my story.

I’ve made sacrifices, made mistakes, and learned some hard lessons along the way. Those lessons taught me to be more intentional with what I earn and more disciplined about the choices I make.

I drove the same car for 13 years. When I got a bonus, I saved it. When I got a raise, I didn’t automatically increase my spending. And I kept looking for ways to earn more while keeping my expenses in check.

I know that’s not always easy, especially now, when the cost of everything keeps rising and paychecks aren’t keeping up. Sometimes, spending more isn’t about keeping up with anyone. It’s simply about trying to get by.

For me, financial security has always meant knowing I could handle life’s unexpected turns without everything falling apart. That determination has shaped my relationship with money.

A few years ago, while living in Ghana, I realized my determination to be financially secure was rooted in something deeper than I thought. I was the person everyone called when they needed financial help. And when I was the one in need, I had no one to call.

I couldn’t depend on anyone, because everyone was depending on me. And I have a feeling I’m not alone in this.

That realization got me thinking about how our feelings about money shape the choices we make, including the ones we make to impress other people. I’ve given that behavior a name: ego debt.

Ego debt is borrowing money, or stretching your budget, so people think you’re doing well.

You may know it as “keeping up with the Joneses.” But I’ve never met the Joneses. Let’s call it what it is - ego debt.

It’s the designer bag. The luxury car. The bigger house. The weekend trip you put on a credit card because everyone else posted theirs.

There’s nothing wrong with enjoying nice things. The problem starts when you’re spending money you can’t comfortably afford to prove something to people who aren’t responsible for your bills.

You can look wealthy and still be financially stretched. You can live comfortably without needing to look rich.

Having money set aside, investments growing, and the freedom to make choices instead of trying to convince people I’ve made it, that’s where peace of mind comes from.

Comfort is quiet. Ego debt is loud.

Keep in this in mind:

1. Give your next financial windfall a job. Before you spend your next bonus, tax refund, or commission check, decide how much goes toward savings or investing.

2. Pause lifestyle inflation. When your next raise comes, save or invest some of the increase instead of upgrading everything.

3. Question the purchase. Am I buying this because I genuinely want or need it, or because I want people to see me differently?

You don’t have to live small to build wealth. You just have to be intentional about what you’re building and why.

Until next Monday,

Monia

Cape Town, South Africa