So, you've found yourself splashing cash you don’t have (or probably shouldn’t be spending) on ‘stuff' just because your friends/family/neighbours are big spenders?
If you've ever felt like you have to buy nicer clothes, upgrade your phone, your car, or get a bigger house just to keep up with the Jones,’ then you’re an unwitting victim of conspicuous consumerism.
Well not only are you on a fool’s errand when you are spending big to impress others, but you’re also seriously risking your financial future – and for what?
YOU KNOW YOUR MATES aren’t going to pay your bills or support you through retirement, so you need to start looking out for yourself.
Let’s look at how to ditch the financial peer pressure and kick conspicuous consumerism to the kerb!
Why It’s FUTILE To Try And Keep Up With Big Spenders
What Is Conspicuous Consumption?
Well even if you’ve never heard the official term of conspicuous consumption, you’re probably very familiar with the way it works.
In a nutshell, conspicuous consumption is summarised in this famous quote by personal finance expert Dave Ramsey:
“We buy things we don’t need with money we don’t have to impress people we don’t like.”
And conspicuous consumerism is when we become big spenders on goods or services in an effort to display our wealth rather than fulfil our basic needs.
Think about the moneyed up folk you know – do you see them with designer clothes, lavish jewellery, luxury cars and over-the-top holidays (well as lavish as you can be in the COVID times!).
Is It Just For The Rich?
Ah no. Unfortunately for us it’s not just the rich who consume so extravagantly! Even the average person without a million dollars to spare is prone to this kind of behaviour.
Why does this happen? Why do ordinary people spend money they don’t have on unnecessary (and perhaps, fake) displays of wealth?
Because that’s just how our world is designed.
Advertising, marketing, and the media are all aimed at making us feel incomplete and “not enough.”
The companies trying to sell their stuff want us to feel like our lives will be better if we just buy (or do) this one thing.
And all too often, we (literally) buy into it.
Why Keeping Up With The Jones’ Is Keeping You Poor
Sadly, on top of the pressure from advertising, our culture has provided a whole heap of ways to help us be conspicuous consumers – even if we don’t have much money.
Of course, we can throw things on our credit cards and forget about them. We can use Afterpay services, or continually extend the mortgage to pay for our new toys.
But you already know how that will turn out, don't you? Falling victim to these habits is a sure-fire way to make sure we never achieve financial freedom! Here are just a few of the reasons that it is futile to try and keep up with the big spenders:
The Jones’ may not be “all that”
Have you ever experienced FOMO because your friends just bought a beach “bach” to spend one weekend at a month?
Or have you felt embarrassed because you’re still tootling around in your second-hand Mazda while your neighbours upgraded (again) to a fancy new RV?
Take a deep breath and remember that not everything is always as it seems!
You don’t know the ins and outs of their finances and you can’t assume the following:
- The extent of the debt they’re in
- Consumer debt taken on by the mortgage
- Their retirement savings (and how much they are saving)
- What their net worth is
- How much they earn
- What their savings rate is
- If their bills are paid
- Who THEY are trying to keep up with.
The Jones’ are Big Spenders NOT you!
Look, regardless of the reality of your neighbours’/friends’/colleagues’ financial situation, the fact is, they are not you!
What the Jones earn/spend/owe has no impact on your life, except if you try to imitate theirs.
So let’s say you’re trying to keep up with Jones A…
…who are racking up debt to keep up with Jones B…
…who have a negative net worth despite the beautiful house and cars because they keep putting their new toys on the mortgage (or just paying the minimum on the mortgage)….
It’s going to be way too late when you’re 70 and realise your friends are going to have to work until they're 90 – you can’t exactly change tack then!
It’s important to reassess your situation NOW.
Remember, all that glitters is not gold.
If this article is hitting home – excellent. You’ve caught yourself trying to keep up with big spenders, which means you can stop, take a step back, and cut it out!
How To Ditch The Peer Pressure And Focus On Your Financial Goals
Start by getting back to the basics:
What are YOUR goals?
When do YOU want to retire?
Once you have clear financial goals, you can set a budget and stick to it.
You’ll know exactly what you need to earn/save/invest every month to achieve these goals. AND, you will be less tempted to splash out because you have a solid plan in place for your future.
Often, big spenders buy new things in an effort to fill a void. If you find yourself shopping in this way, it can be helpful to become mindful of your emotional state and work on discovering more productive, healthy, and sustainable ways to feel good about yourself.
You have nothing to prove! Life is not a race. Those who get to the end with the fanciest car or biggest house don’t get a prize.
Trust me, the feeling of having saved up enough money to enjoy your retirement (or even retire early) will far outweigh the temporary buzz of parking a new car in your driveway.
If you are feeling the constant pressure to “fit in”, it can be helpful to seek out new friends. If you feel like you need to spend money to impress your peer group, chances are, they’re not really your friends.
True friends care about your personality and character more than your income or possessions.
Surround yourself with people who share your values and are on a similar journey to financial freedom. You can support, motivate and inspire one another on your road to financial freedom.
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