The Power of Comparing your Finances
How peer data can seriously improve how you manage money 👥👌
You might have heard about our recent launch of Pluto’s Peer Insights. 🙌
You’re probably wondering… how exactly can knowing the finances and money habits of similar peers help you out? Why does it matter that the average person in your demographic spends $150 a month on groceries?
Realistic Plans ✅
Peer data gives you a social baseline that helps you contextualize your habits and finances with those of similar peers. You’d know what “normal” is based on data from peers with similar demographics (even down to your college campus and relationship status with Pluto!), if you’re within norms, and how realistic your financial goals are. Which are stuff you can’t really figure out when you only benchmark against yourself.
For example, you might learn that you spend $250 a month on groceries. You feel like it’s too much, because you always end up with molding food in your fridge. 😳 And more importantly, you feel straight broke whenever you try to purchase concert tickets. But you’re not sure. Maybe you’re spending too much somewhere else?
That’s where peer data comes in. Suppose you find out that similar peers spend $180 a month on groceries and about the same amount as you on eating out. With that data, it’s pretty clear you spend too much on groceries. You could then challenge yourself to spend closer to the $180 your peers spend (coming soon on Pluto 🙈)… instead of arbitrarily picking an amount, which will likely be unrealistic (we tend to overestimate ourselves).
Social Validation & Competition 🏆
Peer data satisfies your desires as social creatures to seek out social validation. We tend to want to conform to those around us, to be like them… because we believe status quo to be “correct”.
If you find that you spend within norms, you might feel satisfied or relieved (you’re “right on par” with them!). If you spend way above norm, you might feel a tad bit guilty and be pressured to slow down your spending (you’re “worse” than them at controlling your spending!). If you spend less & save more than your peers, you might feel like you’re too stingy with your money.
Peer data also helps you act on your competitive instincts—the desire to be better than your peers (i.e. smarter spending).
Deep down, a lot of us want to be “better off”, to have a “higher status” than those around us. But acting on that is a lot harder than just thinking it. Peer data makes competing easier. There’s something about seeing your behavior next to someone else’s that triggers the competitive part of your brain.
Basically, if you’re not self-motivated enough to become a master of your money (probably most of us), you have these powerful social forces to help push you forward!
Lifestyle Reflection 🤔
Peer data helps you better understand what kind of a lifestyle you really want. It can really draw out that introspective side of you.
If you see that your peers eat out a lot more than you do, you might question the reasons behind your spending. Is it because you’re intentionally frugal? Or maybe you just don’t seek out enough social experiences?
If you see that you spend more on ride share than your peers, you might question your transportation choices. Could you be getting more exercise? Or perhaps you could start driving yourself more (or even carpooling).
By getting a sense of how your peers spend, earn and save, you can now figure out whether that lifestyle “norm” is one that makes sense for you and one you want to pursue.
Pluto’s Peer Insights Just Got Better 💪
You can set your Annual Income 💵 & Relationship Status 💘 as criteria for peer comparison! Yes, ‘Dating’ 💑 is an option… those fancy dinners add up.
Your Profile + Peer Profile
You can set ‘Your Profile’ as default! Play around with different ‘Peer Profile’ criteria, and easily reset to Your Profile when desired. It’s easier than ever to see how you spend compared to other demographics!
Remember, your profile is 100% anonymous and grouped with similar peers. The more peers you invite, the more accurate & useful the data gets. So please spread the word and get your friends on board! 🔥🔥🔥