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Six Reasons Not to Keep Up With the Joneses

He wants his front seat to the Lakers game!

“Too many people spend money they haven’t earned, to buy things they don’t want, to impress people they don’t like.”
–Will Smith

When I was in my mid-20s, I bought a brand new BMW convertible. I lived in Germany, and I’d seen several other people buy one. The car salesman told me that the car was a custom order from someone in Munich who then decided, last minute, to back out of the purchase, which was why the car was several thousand dollars less expensive than other new BMW convertibles. I was sold.

There was one slight problem. I didn’t have the cash to pay for the car. So, the salesman directed me to the bank on post, told me how much to ask for in a loan, and in I went. Fortunately – so I thought on that day – the FICO gods smiled upon me and I got a loan. My car would arrive in a few days.

Unfortunately, the car did not arrive before my deployment paperwork, so I had enough time to pick up the car and park it in the driveway before I deployed to Bosnia. My roommate, ever the eleemosynary one, offered to drive it occasionally so that the fluids wouldn’t sit. His fortune.

When I returned from deployment, I drove that car everywhere. I confess that there are few feelings in this world as enjoyable as driving a convertible on the Autobahn with the top down. You can almost outrun rain. Almost. For all of the fun I had driving that car, though, there were several things which I didn’t accomplish because of the car. I didn’t find meaning in life. I didn’t make my career. I didn’t find the girl I loved. I certainly didn’t impress anyone who I wanted to impress for the reasons I wanted to impress them. I did, though, get a nasty little dent in the door when someone decided to door ding me and not sign their handiwork.

Keeping up with the Joneses lets you personally experience the free rider problem. Click to Tweet

Here are some things which I learned in my adventures in having a nice car:

  • Nobody who is worth keeping around in your life is going to become a part of your life because of your appearances. It’s all a façade anyway, and someone who is worth being close to isn’t drawn to you because of your façade. They’re drawn to you because of who you are, not who you are pretending to be.
  • Keeping up with the Joneses involves investing in depreciating assets. Nice car? Goes down in value. Nice clothes? Go down in value. Nice furniture? Goes down in value. Nice watch? Goes down in value. Get the point?
  • You spend more time trying to be someone else than you are being yourself. By emulating someone else’s standard, particularly without really defining who that someone else is, you’re not focusing on making yourself better. You’re also not being true to yourself. You are making decisions that you would not otherwise make because you’re trying to act like someone who you are not. The object in the mirror becomes distorted, and unlike the approaching cars in traffic, the object in the mirror is farther than it appears.
  • Keeping up with the Jones will cost more than you think. Buy the nice car, but then what happens when you get that door ding? If you drive a beater, then you don’t really care about the door ding, since it adds character. However, if you care about appearances, then you get the door ding fixed. If your Armani suit gets a fray, it’s getting fixed, but if you have an old pair of Dockers, you’ll probably either just live with the fray, or pay a lot less to replace them.
  • You get to personally experience the free rider problem. When you go out as a group, people want to ride in your car. If you have the awesome man cave, then you wind up hosting everyone for the big events. Have front row seats to the Lakers game? You have to have an entourage bigger than Jack Nicholson’s. I’m not insinuating that those around you are lecherous, but everyone, when given the opportunity, likes to experience and enjoy nice things, particularly if it doesn’t cost them anything to do it.
  • You’ll never actually keep up with the Joneses. Every time you think that you’re there, you find something or someone else who sets the bar a little higher. Satisfaction with what you have accomplish turns into envy. You jump on the hedonic treadmill, and you trade up, while trading a little bit more of the bank account in the process. The Joneses are the carrot in front of the donkey that keeps him trudging along every step of the journey, taking him further away from where he wants to actually go.

A few weeks after I returned from deployment, just as I was thinking I’d found my groove with my nice new car, another friend showed up with a brand new BMW Z3. Then someone else bought a Porsche Boxster. We were all Army lieutenants, so we were not made of money. Yet, here we all were justifying our purchases. It was like people who show up to work earlier and earlier just to be the first person in the office. One day, you’re coming in at 7 AM. Before you know it, you’re sleeping on a cot in the office. I sold the BMW and got a hoopty instead. I still miss the car and tell my wife that if we ever win the lottery, I’d get another one. Of course, that requires buying a lottery ticket. That’s another story. If I miss the experience so much, I could go to the car rental office and rent a convertible for a day. I never have. I guess keeping up with appearances just isn’t that important to me anymore.

By Jason Hull, CFP®

4 replies on “Six Reasons Not to Keep Up With the Joneses”

The Joneses are really not that cool anyway! 😉

Through some great practical financial training I have learned what lifestyle I am comfortable living at, and I don’t care that I can’t get whatever the Joneses are buying!

I too have learned the hard way. A paid for car is much more fun to drive than making payments that suck most of my income out of the checking account. Which also means I can enjoy doing other things.

I look forward to the day soon that I will be out of credit card debt. . . .This came from trying to operate a retail store with little capital and not many customers. I was too high end for the area I am in just as the economy tanked in 2008. Not a good combination at all!!! Moral of the story . . . If you don’t have the cash, then you should wait to open the store! Many lessons learned from the store so not a complete wash!

Joyce–

There were a lot of lessons in life that I didn’t learn the first time. I read a lot of books, but it wasn’t until I experienced them first hand that they sank in. I guess it’s the difference between book learning and “street smarts.” If only I’d listened to my parents, right?

Good luck on kicking butt on Visa and Mastercard. It was an expensive lesson, but at least you learned it and pulled out of the tailspin before it was too late. While the SBA loves to tell you how to start a business, they never tell the story about the people who don’t succeed in business and have to go bankrupt because they funded their businesses on the credit cards.

I can tell you that I built my business with a $400 initial investment. You don’t need a ton of cash to start a business.

Make sure that you have an accountabilibuddy to be help you as you work off that credit card debt.

Kick butt!

I have never really had a problem with trying to impress other people, but I do have a problem with understanding that I can not always afford what I want. This was a hard lesson I was forced to learn a few years after college when I realized I was not even making a dent in my credit card bills.
I still remember how good it felt to pay off my credit cards. A big monkey off my back to say the least. These days we always make sure not to spend money we don’t have, and if we do find ourselves using our credit cards for big purchases we try to always have a plan to pay them down quick.
Cash is king… by trying to use cash for everything we spend (other than furniture or airplane tickets) we have found it very easy to live within our means, and avoid the curse that is interest!

Man, I remember when we paid off our credit cards for good. I think that was a turning point when I could start to look forward to the future rather than having to make up for what I did in the past. It also serves as a great anchor for keeping my from letting Monkey Brain take over if there’s something that I want which is beyond our budget. I just have to think about how miserable living in debt was, and suddenly that desire goes away. I’m not saying to not enjoy yourself in life, but buying status symbols won’t get you there.

“Avoid the curse that is interest.” LOVE that quotation! I may plagiarize you… 🙂

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