The 3 Levels of Financial Smugness

It’s human nature to wanna feel better than other people in some way. It makes sense in terms of ensuring basic survival and reproduction on an animal level. If you want to fight that nature, there are plenty of sites out there that’ll help you become a “better person.” This is not one of those.

Smugness is a real, huge, giant beast we have to face when talking about money. It’s bigger than the elephant in the room. It’s a room made out of elephants with elephant-themed decor built by elephants in an alternate dimension where elephants rule the lands.

I love elephants, okay?

Financial smugness exists in three different forms though. Let’s call them levels because people often progress through them. And yet people in any level look down on those in the others.

Level 1: Owning / Doing Cool Shit; Saving Little

This is where we start. The goal here to feel more successful that your peers or your financial position should allow.

For example, if you’re working your first job but you have a nice house and a flashy car, and wear nice clothes and go out to nice dinners all the time and buy rounds of drinks and instagram your lavish beachfront vacation spots.

Your friends who are roughly the same age and work similar jobs are envious. They don’t live in as nice of a house or have as nice of a car, and their vacation consists of a bus trip to New Jersey.

You feel smug because you’re living the best life. Damn it feels good to be a gangster.

The problem is: you’re spending every cent you have to make this happen. You’re using credit cards and borrow from your home equity to pay the monthly payments. It’s not ideal, but you’ll get a raise one day and finally your lifestyle will match what you earn and you won’t have wasted years living a modest life that you didn’t need to.

But you’ll always spend too much. You’ll never catch up.

And avoiding this problem leads us to the second level of smugness.

Level 2: Owning / Doing Relatively Nothing; Saving A Lot

So you spend and spend and raises don’t help and the financial stress becomes too much. You discover blogs like this one. You read about financial wellness. You wait out the lease on your BMW 3-Series and get a used Volkswagen Golf, or maybe you take public transit for a while instead. You sell some stuff you don’t need and move into a smaller, less-flashy apartment. You start cooking more, and eat out less, and drink less.

You see friends less because you’ve associated yourself with friends who are really spendy and it’s too expensive now to see them all the time. Dropping $100 on drinks on a Wednesday is nothing for them. You can’t believe they do that! That’s so much money!

You’ve changed.

You feel like you’ve figured out your own little secret to a better way to live.

You feel smug because your financial stress is gone. Your self-confidence isn’t tied to buying things. And you know you can quit your job if you want because your lifestyle costs so little. Working at Starbucks would pay the bills no problem, and they have great health insurance.

You are frugal now. You have figured it out! You smile a little inside when someone talks about their financial problems or feeling broke while wearing their expensive new shirt.

The problem is: you pretend that you don’t miss the nice car and the nice vacations and the nice dinners. Sometimes that’s true. But sometimes you want to spend a little on a good time or a good thing but you’re still repaying debt and building an emergency fund and climbing out of the hole you dug.

Spending on anything is painful because you’re afraid of going back to your old ways.

Level 3: Owning / Doing A Moderate Amount Of Cool Shit; Having A Lot Saved

Years go by, you save a ton and negotiate your salary skyward. Your net worth goes past zero, and soon hits $100,000. Then $200,000. Then $500,000!

Damn, you have so much money. You forget what it’s like to not have that much in the bank, working for you, earning interest.

You can live off the investment income if you need, so your paycheque is bonus money. You can eat a nice dinner and not care about the cheque. You can get a BMW again, but you actually get a gently-used Subaru because it better suits your lifestyle now and you’re not going to spend the money on flash just because you can.

You are smug because your money can be used and it doesn’t matter. You have the money and the control to only use it when needed.

You got this shit figured out now! Why can’t everyone be like this?

But then you look in the mirror and think, “shit, what’s Level 4??”

So … Be Kind

I don’t have any conclusion of any sorts here, but I think it’s important for everyone in any level to remember to be kind to those in the others. There is no one level that’s better than any others. We’re all just trying to get through life and learning as we go and figuring it all out.

Personally, I tend to look down on the person I used to be. And that’s not healthy either, because I can associate that with other people going through what I did. So perhaps the first thing we all need to do is accept our own mistakes, even if that mistake is enjoying feeling a little smug.

What about you? Have you felt smugness in your financial journey?

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2 thoughts on “The 3 Levels of Financial Smugness”

  1. Loved the post. Something I hadn’t thought about for years. I hit level 3 smugness after my first early retirement. Didn’t really go through level 1 or 2 other than being the recipient of smugness from others as I dedicated myself to my FIRE journey. During my journey it was all just theory, a plan, and dedication to see it through. But on the last day of my encore career when early retirement #2 started I was feeling smug about it. Mostly to all those who said I was crazy to do what I planned to do. That only lasted a short time through the retirement transition and then everything just became normal. I no longer have smug feelings about my situation over anyone else’s choices.

    1. Thanks Tommy!

      I was always in and out of phases of L1 and L2. Like, my ego wanted to be there, but I could never dedicate myself fully to either side. Eventually I just got sad enough and saved enough to get to #3, but I still don’t spend anything, so I’m like at 2.5 or something.

      Either way, glad to hear that your retirement is going well and smug-free! 😀

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