Most of us have heard about “keeping up with the Joneses.” It’s the idea that you need to have the same stuff as your neighbors, or at least look as though you are just as prosperous. In a lot of ways, it’s about status – you don’t want to appear as though you are poorer than your neighbors.
It’s better, though, if you don’t worry about keeping up with the Joneses. You, and your wallet, will both much happier if you stop worrying about what your neighbors have.
The Joneses are Probably in Debt
One of the best reasons not to keep up with the Joneses is the fact that they are probably in debt. Indeed, a recent survey from RateSupermarket.ca discovered that 38.8 per cent of Canadians have more than $5,000 on their credit cards. Add in other types of debt, and the average Canadian household has more than $100,000 in debt. In late 2011, per capita household debt in Canada actually surpassed the debt in the United States.
That makes things fairly obvious: Debt is becoming the norm. If you are trying to keep up with your neighbors, chances are you are actually trying to keep up with their levels of debt. And if you are trying to live debt free, that’s the short road to financial defeat.
Do the Joneses Even Have What You Want?
Another consideration is whether or not the Joneses even have the same things that you want. A lot of people in our neighborhood have much larger TVs than we have. We have a relatively small TV in comparison. But having a big TV isn’t important to us. So, since we don’t care about having a big TV, why would we buy one just to fit in with the other people in our neighborhood?
Before you rush out and buy something that one of your neighbors has, stop and think about why you think you ought to make the purchase. Are you trying to impress someone? Or do you think it will truly contribute to your quality of life? Review your values, and make purchases based on what’s important to you, rather than make spending decisions based on what you think you “should” have because the neighbors have it.
Can You Afford It?
Even if you think that you are buying something because it will enhance your quality of life, you still need to make sure you can afford it. Just because the neighbor just bought a new lawnmower doesn’t mean that you need to buy one today. If you can’t afford it, you should save up the money for it.
Thinking that you should have something because the neighbor has it can quickly lead to overspending and debt. You will be much better off if you recognize that you should save up for something, rather than buy it immediately using credit. It can be tempting to make a purchase based on what others are buying, but you really do need to take a step back. Realize that you won’t be happy making decisions based on what others want, and you certainly won’t be happy if you go into debt buying things to impress other people.