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How Expensive Is Your Ego?

Written by William Cowie - 6 Comments

Social media has changed our lives in many ways, but here’s one nobody probably foresaw: criminals brazenly boasting about their deeds on Facebook. Some misdeeds are probably more humorous than deadly, like Michael Baker, who siphoned gas from a Jenkins, KY police cruiser, and then posted a video on the site with many eyes, complete with a bird salute to Kentucky’s finest. Then he boasted about spending time in jail for that.

He’s not alone. All you need to do is a Google search with something like “criminals caught after boasting” to see hundreds of cases. More seriously, pedophiles, rapists and even murderers have been arrested after boasting about their crimes on various social media. One guy even put his wanted poster on Facebook after moving, along with his new place of work and his hours. It was just a matter of time before the authorities took advantage of this and arrested him with minimal fuss.

The first time I stumbled across such a story, I just shook my head and smirked at the stupidity of these criminals. We know most criminals are not the brightest bulbs on the Christmas tree, but actually advertising your misdeeds when arrest could put you in jail for many years? How smart is that?

Then I flipped to my little racing game app. Suddenly, I noticed I’m not that different. Two of the games I play when I hit writer’s block have various levels of difficulty — as you win at a certain level, the speed of your competition goes up and you have a harder time winning next time. Call me cheap (or boastful) but I pride myself on not spending a nickel on these games which constantly entice you to buy upgrades so you can go faster (and beat the competition). Logic says I should always aim to come in second because that still gives me good “prize money” to use on upgrades. But I find myself constantly trying to win, when all that does is up the ante, making it more difficult to get that prize money because the competition gets better at every level. Nobody sees me, not even my wife, but I still drive to win even though it costs me.

That’s what unites me and those criminals with, shall we say, a common sense deficit: the price of our ego. They would rather go to jail than pass up the opportunity for people to envy or respect them. Well, I tell myself I’m not quite that bad, but my choices reflect the same tendency to pursue my ego, even if it gains me nothing, while costing me. We aren’t the only ones, those criminals and I. Just look around you, and don’t skip over the mirror so fast. It doesn’t take long to notice how many people do things that cost them in one way or another, all to look or feel better.

Logic often falters in the face of ego

An ex-colleague and his wife went through a patch of financial hardship a few years ago and the day came when they needed to replace her car. She could have gotten a good used Corolla for something like $8,000, but she demurred. Her job, she said, required her to get an SUV. There were times, she said, that she needed to cart cases of eats and drinks around for her employer, and a humble Corolla (like my wife’s) or reasonable facsimile would simply not do. She “needed” that $15,000 SUV. That hauling capacity was required maybe six times a year, and a truck or minivan could be rented for those occasions for less than $500 a year. Compare that to the $7,000 price difference. That logic simply cut no ice with her. It didn’t take long to figure out the “employer” thing was simply a smokescreen. She wanted that SUV, and nothing would stand in her way, logic least of all. The price on that little SUV was “such a terrific deal,” they simply couldn’t pass it up. (As an aside, have you ever met someone who didn’t think their car was “a terrific deal” when they bought it?) They’re still in a hardship situation… but she has that SUV.

Lest we be too hard on our ex-friend, there are many areas of our lives where shrewd marketers have succeeded in convincing us that we simply have to hand them more money so we can feel good about ourselves. Is Starbucks coffee really that much better than the brew offered next door? Maybe not, but no self-respecting worker wants to be be seen entering the office with a paper cup from a cheap coffee place in their hands. Same with purses, sunglasses, sneakers (anybody still wear those?) and phones. If you really have to be part of the iPhone revolution, why not buy a perfectly good iPhone 4 on eBay for $200, rather than (effectively) $700 for a new 5? The newer one is not more than three times better, no matter what criteria you use (coolness, of course, excepted).

Many of our parents and grandparents were perfectly happy in a Levittown house with about 900 square feet, one bathroom and no garage. Those things were so hot in the ’50s that their developer made the front page of Time magazine. When was the last time that happened? Today, things are different. Now it’s McMansions or their (only slightly) smaller cousins. Do we really need more space for our smaller families, or can it be that we simply would feel embarrassed to invite folks over to a Levittown house?

Employers know this too. How many excellent salespeople have accepted a promotion to sales manager, which actually pays less?

Ego is a choice

As we’re riding the tail end of this economic cycle, are you utilizing that little bit of extra income to boost the emergency fund or get caught up with the IRA, or are you finally getting that thing you’ve been wanting for the past few years but couldn’t quite afford until now? A friend who really “felt” the last recession recently bought a new Buick Enclave, the poor man’s Escalade (poor being a decidedly relative term here). He looks good in it, gotta tell ya. And it is a peach. U.S. News even ranks it the #1 affordable midsize SUV today. For $40,000 (terrific deal, of course). Could he have gotten a perfectly nice vehicle, similar, for half the price? Of course he could.

How about you? How expensive is your ego? What are you driving or wearing, compared to what your geeky left brain says you could have done if nobody ever saw you? How do you rationalize the (always terrific) deal?

Published on March 5th, 2014 - 6 Comments
Filed under: Consumer, Frugality, Saving & Investing

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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6 Responses to “How Expensive Is Your Ego?”

  1. 1
    Nick | Millionaires Giving Money Says:

    In the past I have let my Ego determine the amount I save and spend just to keep up with the Jones’s. Now I have put my sense before my Ego and things are going in the right direction.

  2. 2
    William @ Drop Dead Money Says:

    That’s awesome, Nick! :) Amazing how much better we do when we stop looking at others…

  3. 3
    freebird Says:

    I had to find out so I went back and did the math on my trading records. I’m one of those who swing trades individual stocks instead of buying and holding index funds. My 25-year track record works out to 9.5% per year vs 11% for index fund returns, so the cost is 1.5% per year. In the beginning this difference wasn’t a big deal and I thought I could improve to eventually beat the market. But now it’s become expensive enough and my lack of progress is clear enough that I’ll be filling out an application at Vanguard.

  4. 4
    Leonard @ The Wallet Doctor Says:

    Our egos can really grab ahold of us in unexpected ways. Its always nice to splurge and spend a bit on ourselves, but, it must be done in a reasonable way. Sometimes skipping the designer glasses for an off brand can save you a lot of money.

  5. 5
    Shawn @ Canadian Trading Guide Says:

    I am now 31 and realize that my ego is very expenseive and my mortal enemy. I found myself in my late twenties trying to keep up with the jones and doing a good job of it.

    Now, I realize a car and a postal code are just that, a car and a postal code. After going toe to toe with myself I am nearly out of debt (1,500)

    Shawn

  6. 6
    Rob Says:

    Heck I still live in a Levitt house. It’s almost 3000 square feet (we’ve added on cause of all the rug-rats) and in Maryland not NJ. But it’s a good old early 60’s Levitt house.

    I drive a car I like, ‘78 Trans Am, but I only paid $4k for it. And then my kids and I fixed it up. Fortunately I work from home and don’t need a commuter type car. But when I did commute I had an old Corolla that worked just fine.

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