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moneysense.ca, 28/05/08
Running after the Joneses
Sometime back, I wrote how the urge to keep up with our friends and neighbours drives our spending habits. In a humorous column in The Financial Post (available here), author Neil Steinberg writes:
Call it envy. Call it competitiveness. Call it a desire to meet community standards. But the need to keep up with the Joneses both spurs our personal working lives and drives our national economy, and most of us don’t realize it.
He also offers one prescription for overcoming our urge to what he calls “the human version of a peacock spreading its tail”:
We push beyond just playing our socio-biological role when we at least become aware of the process, and either join in or do not join in as a conscious decision. It can take courage–or obliviousness–to break the mold.
Note: Larry MacDonald referred to the same column in Forbes magazine in a recent post.
moneysense.ca, 28/05/08
Did you get the high def LCD TV after? Prices have dropped big time since you posted about wanting one.
FT: Yeah, we did pick up a LCD TV last fall at Costco
Too bad, the Sens didn’t make it too far into the playoffs this year.
Good points, but the opposite behaviour (being different for the sake of being different) is just as mindless. I’ve always been someone who didn’t run with the pack and was skilled at resisting peer pressure, but eventually realized that I was missing out on some good things because my knee-jerk reaction was to reject whatever was popular or “expected” of me. I think the secret is to ask yourself hard questions about what you want and why you want it, and to consider all of the costs (in terms of time, money, and opportunity costs) you’re getting into before you jump.
brad: You’re right. I’d like to aim to be thrifty (defined as “thrift at once earns and saves, with a view to wholesome and profitable expenditure at a fitting time” in a recent post by Jon Chevreau) and not parsimonious (“excessive and unreasonable saving for the sake of saving”) and definitely not miserly (“the denying oneself and others the ordinary comforts or even necessities of life, for the mere sake of hoarding money”). I guess it all comes down to a balance – yes, we definitely need to save money but also spend on things we derive pleasure out of.
I’m not sure if it’s a great example, but my spouse just went out and switched from Rogers to Telus and picked up a Blackberry rather than a perfectly working normal phone. I’m not really sure why, I think it was because it was pink and looks nice.
She claims it was only 50 bucks and they threw in a $50 gift card to the store she purchased the phone from. I try to point out that she signed a three year contract so the actual cost is:
$49.95 (Phone Cost)
$6.49 (HST on Phone)
$-50.00 (Gift Card)
$6.50 (HST on Purchase from gift card)
$2412 (67 bucks a month plan * 3 years)
$313.56 (HST on plan)
———–
2758.30 over 3 years
912.83 / year
Plus that’s with after income tax dollars, but I won’t get in to that . . . that’s an interesting way to get a $50 gift card.
Great little article. I’ve always prided myself in the fact that my husband and I have managed to, for the most part, avoid the “keeping up with the jones’” mentality (living in a small house in a less desirable area of town, driving a beater, etc.). Then I remembered how I emailed photos to our friends that live in bigger, nicer homes of our recent trip to Africa or Europe and I’m reminded that I’m really no different.
Where you live and who you associate with makes a really big difference in who your Jones’ are. Despite our physical location, most of our friends have similar careers and incomes so it’s hard not to compare yourself sometimes. But as CC says, it all comes down to balance. As long as you’re spending money on something you really want and can reasonably afford (and still manage to sock some away), you should feel good about your spending habits.
I think its all about choices. Make your choice, don’t let marketing/TV make it for you. Do you need that big HDTV? Maybe. I bought one a few years back when they were more expensive but I think I’ve gotten great use out of it.
Now, do I need that sports car? No, my girlfriend and I share a small economy car. The cost for a nicer car, or one car each, wasn’t worth it for us.
You people all make really good points. Many of us do try to keep up with the joneses, be it physically with all the toys, socially – look who I’m friends with, look at my kid’s accomplishments, or experientially – look at what I did or where I went. This kind of attitude, as long as it is kept in reasonable check, is overall good for society, driving us all to want a little bit more out of life. Many of us reasonable types look for value for money, and don’t just throw money away to buy boasting points.
If I am tempted to try to keep up with the Jones’s I have to remind myself how lucky I am. I have a fantastic husband and children and have a house in a great area. It has less clutter than many places as we have less stuff due to frugal behaviour and although it needs new carpets and decoration at least we do not have to worry about any damage the children might do to it. I can also be smug in the knowledge that I am working hard to get the mortgage paid off and I hope it will be paid off before I am 40.
I’m reading House Lust and one more reason cited for spending money is the “I deserve it” factor. The author says that it could be one reason many people spend a ton of money on bathroom upgrades that few others are ever going to set foot in.
I was talking with a former neighbour of mine who lives up the hill from the house I grew up in. He said after my parents sold the home, the new owners spent over $1 million renovating it, and they put in seven — count ‘em, seven — bathrooms. That’s one for every day of the week! And then, after they finished all that work, they divorced; the woman now lives there alone, with her seven bathrooms. That’s one set of Joneses I’d never want to keep up with!
I think it is sad that we seem to measure success by the amount of possessions that we have. I prefer to have less clutter around me and more money in the bank!
Nice comment. Keeping up with the Joneses results in a lot of useless clutter in our lives. A return to simple living is sorely needed. If you feel the urge to buy something just to impress someone else, remember the words of Henry David Thoreau: “A man is rich in proportion to the number of things which he can afford to let alone.” From his book Walden, where he describes his experiment in simple living.