‘Comparison is the thief of joy’, is a catchphrase we’ve all heard at some point in our lives. Countless self-help blogs and inspirational quotes posted on Facebook and Instagram routinely warn us of the mental health dangers of comparing our lot in life to others. It’s a downward spiral into misery, or so we’re led to believe.
Focus instead on ourselves we’re told. Mindfulness, an offshoot of this quest for self-enlightenment, and now a billion dollar industry, is one example of how more and more westerners are embracing the cult of the self in their quest for the comparison free, moral high ground.
But in our attempt to completely suppress what is undoubtedly a universal human trait – keeping up with the Joneses – are we failing to harness the positive power of comparison altogether?
To understand how comparison can be a force for good, it’s useful to understand the effect of its close cousin, rivalry, as a driver of performance above and beyond the norm.
Confirming a large amount of anecdotal evidence, scientific studies have now proven individuals perform better when a rival is present, as opposed to facing off against anonymous competition.
Examples include cyclists who post better times when competing against a known rival verses a noncompetitive pacesetter, or runners who can shave off nearly 5 seconds per kilometre simply by going up against a known nemesis in a race.
The psychological principles at work here don’t just benefit elite athletes. Companies are now using this knowledge to modify an individual’s consumption and saving habits as well.
Take energy companies, who are now active in designing social experiments with comparison and rivalry concepts in mind, aiming to get homeowners to reduce their energy consumption.
Opower in the US is one such company. Partnering with utility companies, the analytics powerhouse delivers personalised home energy reports to households comparing their energy consumption to neighbouring homeowners.
Turns out seeing how you stack up against your immediate peer group has you swiftly picking up your energy savings game if it is below par. To date the company has generated over $1B in energy savings for homeowners, saved 11B kWh and prevented 5M tonnes of CO2 emissions.
So if we can achieve these sorts of savings on our electricity and gas by comparing ourselves to others, surely we can do it with our money?
Possibly. Some research suggests knowing what your peers are saving could have the reverse effect – discouraging you from even saving at all. This is especially true in the instance where you perceive you cannot possibly catch up.
But the research is limited and sparse. It’s feasible a tool that could create some type of even playing field, using percentage of salary saved or saved to spent ratios could help balance out this effect.
Personally, I would find it incredibly insightful to know how my savings rate compared to my immediate peer group – I have no doubt this would tap into the rivalry premise and would motivate me to save harder. This could be quasi-anonymised for privacy purposes. I could know where I rank within the group, but I wouldn’t necessarily need to know the specific individuals who were above or below me.
After this it would be interesting to be benchmarked against look-alike groups – age, profession, income level, location etc. This second group would open up a richer data set to compare against, and could even serve as a way to crowd source savings ideas. Insights along the lines of, ‘Did you know the top 10% of savers in your cohort used X financial product to generate above average returns in the last 6 months of the year’ would help me to continuously optimise my savings behaviour over time, and steer me towards products that are crowd tested.
If there is one group of products in this world that are confusing beyond belief it would have to be financial products. Knowing they were working for your friends would be a significant decision making factor. The closest example I have seen to date of any type of crowd sourced savings concept in action is PFM Qapital’s community of IFTTT recipes for savings triggers.
There’s no doubt comparison to others, when taken to extremes, is unhealthy. But a little healthy rivalry with our immediate peers could be a boon for our bank accounts. It might not be the perfect solution for everyone, but at the very least could help nudge some of us in the right direction.
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Jessica Ellerm 