The Facebook Challenge

For some reason, it’s taboo in our society to talk about how much money you have. I do understand the desire for privacy and safety, but I don’t fully understand the reluctance to discuss finances. While I wouldn’t want to tell people “I’ve got $100,000 in small bills hidden under my mattress and, by the way, I’m going out of town next week,” I don’t see the harm in saying “I’ve got $100,000 saved in my brokerage account for retirement.”

This taboo against talking about money just causes problems. If you can’t discuss finances with others, how do you learn? You can't. How do you know what you are doing wrong and what you are doing right? You don’t. So our society continues on with most people living paycheck to paycheck, barely making ends meet, just one small disaster away from financial collapse.

Forty six percent of Americans can not handle a $400 emergency expense. Almost half of all Americans! That’s a recipe for disaster. You WILL face an emergency expense at some point. Life happens. You have to be prepared for it.

Americans don’t like talking about money, but they sure love to curate their life. (That's a fancy way of saying they love showing off.) Facebook is filled with pictures of the new car your friend bought, or the new house your sister bought. Your friend from eighth grade just posted a picture of the $200 sneakers he bought his seven year old son. Who's that standing in front of the Great Pyramid Of Giza? Oh, it’s your old roommate from college who was always late with his half of the rent!

Add to this the relentless messaging from advertisers that tell you that you must spend money in order to be happy and you can see why people are living paycheck to paycheck. The forces urging you to keep up with the Joneses are everywhere.

No one on Facebook posts a picture of the $5,700 credit card bill they got in the mail yesterday. No one posts photos of the depressingly small balance in their 401(k) or their kid’s college saving account. Social media lets us present ourselves to our friends as we wish to be seen – successful, happy, and well-off. We share photos of the $300 meal we had for our special night out but we don’t post a photo of the actual bill. We share the fun times. We don’t share the times life sucks.

All those carefully selected images give us a skewed view of how life really is and that results in a yuge amount of peer pressure to try to live that fantasy life. We can’t help but think that if we aren’t living in a similar fashion, we must be doing something wrong.

Stop it.

Let’s harness that peer pressure for something good. Let’s take away the stigma of talking about money or being in debt. Let’s discuss our finances amongst our friends and learn from each other. Let’s all help each other improve our financial lives.

I’m going to issue you all a challenge:

Post your net worth on Facebook.

Did you just wet your pants? Maybe a little? Sure you did. Here:

Too little, too late

This is a scary thought. Display your crappy financial situation for everyone to see? WTF! No way!

I admit, I had the same thoughts when I first contemplated posting my net worth on this blog. Ultimately, I decide to face my fears and go through with it anyway. For me, the issue wasn’t so much shame – after all, our net worth is pretty high and we’re definitely in better financial shape than the majority of Americans. My battle was against the stigma of talking about finances. If our net worth was really low, or even negative, in addition to fighting that stigma, I would have also had to face the additional fear of being embarrassed. Those two fears are probably too much for some people to overcome.

Let’s change that. We’ve all screwed up. We’ve all done stupid things and have gotten in over our heads. Tell your friends about it. Post your net worth.

We need some rules, though, so here's some suggestions:

Be smart in what you share. Don’t share personally identifiable information. Don’t post your social security number or your credit card number. Remember Facebook may share your address and phone number with friends if you’ve allowed it to, so don’t list “$10,000 cash under the sofa cushions in the living room” on your net worth statement unless you want your house broken into.

No judging. Posting financial details is scary. You're exposing a vulnerability and that requires a huge leap of faith that those you are sharing with won't abuse it. We’re here to help fix problems, not critique lifestyles.

Be helpful, not hurtful. Everyone’s situation is different. Everyone has different priorities. There’s more than one way to do things. You'd do well to keep in mind Star Trek’s philosophy of IDIC: Infinite diversity in infinite combinations.

Look forward, not back. What’s done is done. Let’s concentrate on how to improve things, not how messed up things were in the past.

Offer constructive advice or encouragement. Build up, don’t tear down. Specific steps to take going forward are more useful than theoretical ideas.

No jealousy or panhandling allowed. Don’t ask people in a better financial situation than you for loans or handouts. It puts the person you are asking in an awkward position and increases the odds of hurt feelings if you don't get the reply you want. You are the captain of your destiny. Accept that responsibility. When you finally reach your goal, you’ll appreciate the accomplishment that much more for achieving it all on your own. Ask for advice, not money.

Show respect. For each other and for each other’s choices.

Use Facebook’s privacy settings. If you don’t want to entire world to know your net worth just yet, change the settings on your post so that only your friends can see it. Or friends and friends of friends. Whatever.

How do you get started?

If you don’t know how to calculate your net worth, it’s not hard. Add up the value of all your stuff – house, car, bank accounts, 401(k), etc. For simplicity, don’t include small stuff like your stereo. If it’s worth less than $500, ignore it. These are your assets.

Add up all of your outstanding bills – mortgage, credit card balances, student loans, etc. Include everything you owe money on. These are your liabilities.

Your net worth equals your assets minus your liabilities. Figuring out all these numbers might take a little bit of work, but then, anything worthwhile usually takes a little bit of work. (Mint.com is a great site that does this calculation automatically for you after a one time step of setting up everything. I use it and recommend it.)

You want your net worth to be a positive number. You also want it to be as big as possible. In fact, that is your goal – to increase this number every month.

Post your number to Facebook. You can post just a number or you can post your breakdown of assets versus liabilities. Whatever you want. But post something.

This does two things:

1. By posting this on a regular basis, you become accountable for it. You’ve now got people watching your progress, so you’re more likely to succeed. This is the concept behind Weight Watchers. This is peer pressure for the common good.
2. You can see others aren’t so different from you. Everyone fucks up. Everyone can make it better. Life is not always vacations and $200 sneakers. Life is sometimes delaying gratification so you can retire a bit earlier and not have to work until you are 75 years old.

I’ve thrown down the gauntlet. Let’s stop the silence and shame of financial illiteracy. Are you with me?






P.S. I can’t say this idea was all mine. I first read about it from Kurt at MyMoneyCounselor and I’m sure others before him have suggested the same.