We’ve all heard the phrase, “Keeping up with the Jones’”. If you don’t know what that means, it’s really quite simple. Basically it is a phrase used when one person compares what they have to what someone they associate with has. That sounded a little confusing. Let me give you an example:
Bob lives at 123 Main Street. From the outside, it looks like Bob is loaded. He’s got a brand new luxury car, a really nice boat in the garage, his house is beautiful, he takes 5 vacations a year and belongs to the local golf and country club. Bob throws the best parties on the block and always has friends over for dinner.
Fred lives next door at 125 Main Street. Every day, Fred looks out his window and sees Bob bringing in new furniture, or hopping in a taxi to head out on one of his annual vacations. Over time, Fred feels like he is missing out on a life that he should be living. Little by litte, Fred spends a bit more than he should. He decides to take his family on an extra vacation each year. His drive to work is just as long as Bob’s and he decides that he wants to make the trip more comfortable by buying a car like Bob’s. When everyone on the street gets together for a party, Fred spends a ton of money at the store buying all the best products in a subconscious bid to impress his neighbors. Before long, Bob finds himself stressing about money. The bills keep coming but he hasn’t gotten that raise at work and he’s at risk of missing some payments.
Good old Fred is doing his best to live the life he believes he should. If Bob can do it, well then Fred certainly should too. Here’s the problem. Bob really doesn’t have the money. Many of the calls to Bob’s house are from creditors asking why he hasn’t paid his bills. The sad reality is that Bob is living a life he can’t afford but no one around him knows that. Fred’s basis for what he should be entitled to is calculated on Bob’s harsh reality. Even if Bob could afford to live that lifestyle, Fred can’t.
I live in a neighborhood not all that different from Bob and Fred. It’s a nice suburban community where the lawns are kept up and the homeowners association makes it’s monthly rounds to make sure everyone is conforming to the rules. Some of our neighbors go on multiple vacations a year, like clock work. They drive really nice cars and have very nicely decorated houses. While some of these neighbors can afford this lifestyle, others clearly are pushing the envelope. Where do I fit in?
Over the years, I have talked to various neighbors about finances and about good and bad financial decisions. Through these discussions I’ve learned a little about these neighbor’s outlook on finances. There are two neighbors that I chat with that love to talk about finances and we’ve made it a bit of a game to see who can make the best decisions. Each time one of us buys a car we all know that if it was a poor decision, we will face the wrath of the others. When one neighbor mentions that they are going to a particular restaurant, it isn’t unusual at all to have one of us say, “I’ve got a buy one, get one free coupon. Do you want it?” We’ve become a bit of an island amongst the rest of our neighbors. I’ve found it to be very helpful in keeping perspective about our finances. I won’t lie. Every now and then, I see something that a neighbor has purchased and secretly think to myself, “I could buy one of those”. I think it’s human nature to do it. The trick is to associate with “like minded” individuals that unofficially become your support group for fending off the desire to be like the Jones’.
