As the world makes its way to improve financial awareness and financial literacy, the story about those at the top of their game revealing their income may pique your curiosity.
We can’t deny that it is somehow enjoyable and always interesting to learn other people’s finances so that we can understand where we stand—and if we can reflect better, we can improve our performance too.
But how if we change the scenario? Does knowing someone whose lifestyle seems so gleaming that turns out they make less than our income feel like winning a prize to you? Or does it simply make you feel grateful?
Whatever the real reason is, it is more acceptable to show off our new car and luxurious bags on social media than revealing our monetary details. Yet, in the other hand, websites that provide database of job salaries attract a sea of visitors and unsurprisingly build their own audiences.
Revealing your income to others is a double-edged sword. If the person you are talking to makes less than you do, you might end up feeling guilty as if you belittle their achievements and performance.
But if you are the one with the lesser income, the possibility to feel inferior is still there as well, unless we really want to know—some of them are even afraid to be secretly judged by the higher achievers.
While the scenario is not always entirely true in all circumstances and salary transparency can bring some benefits too, we are here to offer things to consider.
The Upside of Concealing Your Income
Imagine you have a night out with your friends without them knowing that you have the highest salary among your cliques. You may notice that you do not have that kind of social obligation to pay for all the drinks, and if by any chance you do not feel like going out you are free to tell them you run out of money before the end of the month.
You are also free to blend in with any friends from any circle and get into any lifestyle you want—well no one cares if your debt seems unstoppable too! Also, if your income is considered high among other people your age, people most likely won’t befriend you because of your money only—since they have no idea the exact figures you make.
The Downside of Income Transparency
“Look at how humble she is for only wearing Tory Burch while she can afford to purchase a Birkin!” be prepared to get this kind of response when everyone knows you earn a six-figure income.
Or else, a question like “How do you think she got a Birkin when she could just possibly buy a Coach handbag, assessing from how much she makes” may appear when you are not a high-earner.
It will come so natural that people will associate your income with what you have and keep measuring what things you can purchase from your money. The comparison and judgement are inevitable, with or without other information or data that is required to do so.
Moreover, people will set their expectation for you, “He makes money more than we do, so let him pay for our drinks tonight!”
Most people will not care that high income does not always mean wealthy, and they will most likely neglect the fact that maybe you also have dependents as well. Not only that, if you are a high earner, making friends can be trickier as you cannot really separate who are the sincere ones to you.
Finding the Right Formula
Sharing your salary is not a sin at all, even millennials today are more confident to share theirs than their older counterparts, especially if it is based on a good purpose such as to ensure that we are fairly paid by the companies we work for.
The other benefits of revealing your income are, you can learn how to budget your money based on other people’s cases and to know the average job salaries in the current market. While it is not always bad, it is always tricky because the responses you would get after sharing your salary depends on whom you discuss with and the dynamics you have with them.
If you really have to, the safest way to announce your income is by giving approximate figures. From there you would also like to discuss how much of your income you should save averagely, your investment strategies, and how you manage your emergency fund.
In sum, if you really have to reveal your income, make sure the whole discussion is not only about bragging, choose a way to lead the conversation to a fruitful discussion.
If you are a type of person who wants to keep it low for some reasons, you better change the topic from the first time. However, if the circumstances force you, do the right formula: give them the approximate figures.