How to Avoid Keeping Up With the Joneses

The newest version of the iPhone just came out, and it seems like all of your friends are getting it. The latest console has just been unveiled, and your buddies were some of the first to buy it. Does this sound familiar? 

These days, it seems like more and more people are participating in “conspicuous consumption.” Back in the ‘50s, this was referred to as “keeping up with the Joneses.” The Joneses were a well-to-do family that always had the latest appliances and vehicles, and they forced everyone on the block to catch up to their level. 

Unfortunately, this kind of mentality is toxic to both your emotional and financial well-being. Today we want to discuss how to avoid keeping up with the Joneses and how to focus on making the right choice for your money. 

Luxuries vs. Necessities

If you were to ask people today to make a list of necessities and luxuries, many of them would put items that were previously unheard of in generations past. Back in the old days, the internet was not a necessity, but today it is. Before, having a cell phone was seen as a luxury, but now everyone and their mother seems to have one. 

As time goes on and technology becomes more integrated into our lives, products that were once luxurious become commonplace. In some cases, these changes are part of progress. 

Trying to live in the modern world without internet can be incredibly challenging. However, as we adapt to having these things, the idea of luxuries turning into necessities becomes more and more commonplace. 

That being said, it’s imperative that you maintain an objective position on the difference between the two. Having access to reliable internet is necessary, but do you need the fastest connection with the highest upload and download speeds? It will make downloading the latest season of your favorite show that much easier, but how quickly do you really need to watch it? 

Smartphones are one area where many people blend the idea of necessity and luxury. For the most part, having a smartphone is necessary, especially as a means of staying in touch both professionally and socially. 

However, upgrading to the newest version every few months is not. If you find yourself waiting in line for the latest release, ask yourself what the new updates are going to add to the experience. If the difference is negligible, then you can probably stick with the version you have right now. 

Writing down a list of pros and cons can help you identify necessities and luxuries. Whenever you’re thinking of upgrading to a newer device or buying a product you haven’t had before, write down the primary reasons you want it (or need it), and write down the potential downsides. 

One excellent way of determining if something is a luxury is if it does only one thing. Single-purpose products are often unnecessary and can add clutter to your life. Even worse is if that thing has a hyper-specific purpose, such as holding your cookies so that you don’t get your hands wet when you dunk them. 

Overall, a good rule to follow is to wait about a week or two before finally purchasing something you want. All too often, we think that we need a new device or product not only to show off but to achieve some goal. 

For example, you’ll start going to the gym once you get the new smartwatch that tells you how well you’re doing. You’ll begin eating healthy once you buy that new juice maker. 

Instead, see how easy it is to live without the product for a little while. If you can manage without it, you’ve just saved some money (and potential buyer’s remorse). However, if you’re always annoyed that you don’t have it yet, now you have the perfect justification. 

The Psychology of Conspicuous Consumption

If you’re starting to feel a bit self-conscious about your spending habits, it should help to know that you’re not the only one. Businesses have adapted to make conspicuous consumption more widespread and acceptable, so it’s not just a lack of willpower on your part. 

Typically speaking, there are two factors at play when it comes to keeping up with the Joneses. First, when you see other people (especially friends or family) having something valuable, it makes you want to share in the glory. You see everyone else enjoying their products, and you want in. 

Second, advertising and marketing have become even more targeted and effective. Businesses have spent years perfecting their craft so that they know precisely how to get you to buy a product. 

Combine these elements, and you don’t have a chance. Your brain is hard-wired to fit into the group, and your emotions can be an influential factor when deciding what to buy. Simply put, it’s harder than ever to resist the temptation of conspicuous consumption. 

Fortunately, recognizing the issue can help you fight against it. We already talked about the benefit of waiting a couple of weeks before buying something, but there’s another way that you can use psychology to your advantage. 

Look through your bank statements and take stock of any impulse or “unnecessary” purchases. Don’t go too far back, as you’ll want to write down what you felt when you bought the item. What was your rationale behind the decision, and what did you hope to feel afterward?

Once you write these emotions down, add a new line for how you currently feel about the product (or service). Did it satisfy you the way you imagined, or are you regretting it? You can put a simple yes or no in this column - yes if it fulfilled your expectations, or no if it didn’t. 

Looking at your list, see how many yes's and no's you have. If the former outnumbers the latter, then you’re looking good. If it’s the reverse, now is the perfect time to change your habits. Start tracking your purchases from now on and take note whenever you experience “buyer’s remorse.” 

Also, keep in mind how often you use these items. For example, if you just purchased a new outfit and haven’t worn it once, or you bought some gadget that didn’t pan out the way you imagined. In some cases, you may be able to return items that you haven’t used (or used gently) but record your feelings about it no matter what. 

Over time, recognizing how often you regret a purchase and tracking it will help you prevent future indulgences. You’ll start to think more long-term about your spending, which will keep you on track. Also, this process will help you understand which kinds of things satisfy you the most and which don’t, so you can avoid the latter. 

Why Conspicuous Consumption is Toxic

If you were to look at the bank account of everyone who had the latest gadgets, most of them would show a lot less than you’d expect. Even worse, if you paid attention to their credit card debt, it would be a lot higher. 

The fact is that most people are drowning in debt, and a large part of that is conspicuous consumption. The mentality of “buy now, pay later” has been integrated into modern society, meaning that it’s hard to break free of it. You may be able to keep up with the Joneses, but that debt will follow you forever - the new phone probably won’t. 

The other downside of this mentality is that you feel worse about your purchases. Because you start assigning value to items that are newer and flashier, older pieces begin to look worse by comparison. Even if your gadgets, clothes, or other products are still useful, they don’t look as appealing as the newer, upgraded model. 

The psychology of fixing things that aren’t broken will worsen over time until it becomes a part of who you are. Instead of being satisfied with anything, you’ll always believe that the newest or latest option will make you happy. Tying any kind of satisfaction to the appearance of your stuff will never work out in the long run, and it will make you miserable. 

Overall, conspicuous consumption will leave you broke and full of regret. No matter how much you spend on new stuff, it will never be enough, and that kind of mentality is toxic and far-reaching. 

If you’re dissatisfied with your belongings, then the negativity can spread to other aspects of your life. The sooner you can break this habit, the better off you (and those closest to you) will be. 

How to Break the Cycle

We’ve already covered a couple of different ways that you can remove the temptation of conspicuous consumption, but it will probably take a bit more than recording your purchase history and waiting a week before buying anything new. 

Because this problem can manifest deep in your subconscious, you’ll need to take a more comprehensive approach to solve it. Here are a few tips to get started. 

Look at Your Progress

All too often, people are looking above and beyond the current situation. There is always a greener lawn and a brighter tomorrow, so it’s easy to lose sight of where you began. Now is the perfect time to take stock of how far you’ve come in the last few years (or decades). 

What’s imperative to understand is that you want to assess your situation whether things have been improving or getting worse. Have you accrued more debt in the last five years, or are you closer to paying it all off? Have you advanced in your career, or are you on a downward trajectory? 

Unfortunately, when things in life seem to be going bad, conspicuous consumption can look a lot more appealing. My job may not be going well, but at least I have a new big-screen TV. I may have gained some weight recently, but I also have a new car. We begin to believe that our purchases reflect personal worth instead of achievements. 

If individual progress doesn’t seem to be moving in a forward direction, now is the time for step two.

Set Goals

It’s so easy to fall into a rut that you probably don’t notice when it happens. However, if you’re not moving towards an objective or a goal, you tend to think that buying nice things is the next best option. 

Instead, begin setting goals that are unrelated to any purchases. If you want to switch careers, write down how you are going to make that happen. Break the process down into actionable steps and take them one at a time. 

When you’re focused on self-improvement, you aren’t worried about keeping up with the Joneses. Now you have something more productive on your plate, so who cares what other people have? 

As you move toward your goals, continue to track your progress. Mark down how many pounds you’ve lost, how many job applications you’ve submitted - whatever your goal is, make sure that you’re paying attention to all of the little steps you’re taking to get there. As long as you measure the progress, it’s a lot easier to continue that momentum. 

Bottom Line: Focus on Value, Not Flash

Is your smartphone still working? If so, why are you trying to get a new one? Does your computer do everything you need it to? Then why do you feel like it’s obsolete? 

Instead of focusing on what you could have, start paying more attention to what you do have. This way, you can avoid the temptation and save yourself from more debt in the future. A financial advisor can help assist you with setting these goals and keep your focus on the assets you currently have. 

Overall, if you can resist the temptation of luxury purchases, you will be so much better off in the long run. Once you recognize your priorities and get them in order, you will find much more satisfaction. Buying stuff is an empty feeling - search for something more profound, and you’ll be happier. After all, are the Joneses really happy? 

This is a post from Clint Haynes, a Certified Financial Planner® and Financial Advisor in Kansas City, Missouri. He is also the founder and owner of NextGen Wealth. You can learn more about Clint at the website NextGen Wealth.