Thought piece Thursday #5 - Keeping up with the Jones'

Have you ever seen your neighbour or friend with a cool new gadget or car and thought I want that? It's a natural instinct to want and desire what those around you have and they say:

You are the average of the 5 people you spend the most time with

You've probably heard the term keeping up with the Jones'. For those of you who may not know what this means, it's buying goods or services to keep pace with the "rich and the famous" or even that pesky next door neighbour who upgrades to the latest IPhone the day that it comes out!

Does it really need to be this way?

In a short answer, no you do not need to keep up with the neighbours and have the latest gadgets. Of course you can and this is likely to lead you to living pay check to pay check, whether you earn $40,000 or $1 million per year.

Why do people do this then?

  1. We want to fit in. No-one wants to be left behind and our natural survival instincts tell us that if we leave the "safety" of the pack we're likely to die
  2. It's habit and subconscious behaviour. If buying goods to keep up with your friends is what you have always done, you'll keep on doing it
  3. It is the path of least resistance. We're bombarded with 100's or even 1000's of marketing messages from a variety of different companies. Eventually our resistance or will-power depletes and we give in to that new car, holiday or golf clubs
  4. We feel good when we buy. Think how you feel after you buy that new _________. You get that kick of dopamine, associated with the excitement of a new purchase
  5. It's a social thing. Most people enjoy heading out to the shops with friends, family or even by yourself on occasions. While you may not go out with the intention of making a purchase, it is very easy to pick up that one or two things when your out and in the moment
Do you attempt to keep up with the Jones' in the consumption race?

Do you attempt to keep up with the Jones' in the consumption race?

It doesn't have to be this way!

While yes it is tempting to have that new piece of equipment, there are ways to avoid the consumption race!

  • Clearly define your money goals - we've looked in greater detail about the importance of goals however it having money goals will then wake you up before you decide to buy that new car
  • Cut up your credit cards - This is an extreme measure, as the responsible use of credit cards may be a decent way to earn rewards points. What it will do though is force you to spend the money that you have and nothing more
  • Go on a cash only diet - Avoiding paperless (debit or credit card) transactions will show you where and how much money you are spending. Caution you may get a big shock when you do this
  • Get a new group of friends - If you are friends with people who expect you to own the latest phones, go out to the fanciest restaurants and the flashiest holidays, another radical option is hanging with a new bunch of people
  • Earn more money - Not an ideal option and will require a change or spending habits however are there ways that you can maximise your income

Who do you know that attempts to keep up with the Jones'?

What stops you from competing with others?

Which parts of your finances are you struggling with?

Remember to live your money glee! :)