Last Updated October 28, 2020
Are you tired of trying to keep up with the Joneses? I’m here to tell you, keeping up with the Joneses is detrimental to achieving financial freedom. Find why keeping up with the status quo will make you broke and how you can stop keeping up with the Joneses.
What Does The Phrase “Keeping Up With The Joneses” Mean?
The term “Keeping up with the Joneses” means always wanting to own expensive objects and do the same things as your neighbors and friends because you are worried you will not appear to be on the same social status as they are.
Why Keeping Up With The Joneses Is Bad?
If you try to keep up with the Joneses, you are hindering your goal of financial freedom.
I notice in this social media world we live in, a lot of people do things “for the Gram.” Meaning they post things because they want to give people a certain perception of themselves—but what they post isn’t genuine.
Most of these people that we see on social media living “wealthy” lifestyles—that are full of $500 bottles of champagne at the club and exotic vacations—are not real. The majority of them can’t afford the lifestyle they portray.
Then we see what our “friends” post on social media, and we feel bad about our own financial situation. We feel bad because we don’t have money for that lifestyle—or worse, we go out and buy luxury items we can’t afford to appear wealthy just like them.
Don’t be that fake person, or feel bad about your own financial situation based on what you see on social media. Stop keeping up with the Joneses.
Now, I’m not trying to belittle anyone, nor am I saying you can’t buy luxury items—because I have bought a $1,000 shoe in my day. But what I am saying, is you can only make a purchase like that if you can afford it.
Can You Afford Your Lifestyle?
It’s okay to live a luxurious lifestyle if you can afford it.
But what is your definition of being able to afford something? Is it being able to pay off the credit card in full when the bill comes?
That used to be my definition of being able to afford something. But, my definition of what I can “afford” has changed over the years.
The way I determine if I can afford a luxury item now is I look to see if my assets can purchase it—not my earned income.
Before I felt like I can buy a $5,000 Chanel bag because I had a lot of earned income—meaning I could buy the bag with the money I earned as a lawyer. I would justify this purchase because I had a good income.
I did not have any credit card debt, and I would pay for the bag in full when my credit card bill was due. But this way of thinking is exactly what prohibited me from being financially free earlier in life.
If you don’t mind working for many years and you have high job security, then this way of thinking might be okay. But for me, I wanted financial freedom.
“Financial Freedom My Only Hope”
You ever hear the lyrics from the Jay-Z song where he says “Financial freedom my only hope. F*ck living rich and dying broke.” If you don’t know who Jay-Z is, he’s a rapper that’s also a billionaire mogul.
The words he says in that song is so true! It makes no sense to appear rich, and end up dying broke. Wanting financial freedom played a major part in my decision to get rid of my BMW (my actual car is in the picture above).
I loved my car, and it was beautiful, but I was spending approximately $850 a month for a car I only drove on the weekends—and I didn’t have a car note! The cost of parking, maintenance, gas, insurance, and any other fees (like registration, inspection, and tickets) was a lot.
Since I live in New York City, my car was a luxury and not a necessity. This BMW was a liability that helped me appear rich. Therefore, I could only justify keeping the BMW if my assets were paying for it.
At the time, since I had to work to pay for my BMW, it had to go.
I took the money from the sale of my BMW and invested it in the stock market.
I personally use Robinhood.com to purchase individual stocks. This website is great because you can buy and sell stocks for free—there are no commissions or fees.
Most other brokerage firms charge at least a $4.95 fee per trade, and some have hidden fees.
Sign up today and you and I can get a free stock like Apple, Ford, or Sprint. With Robinhood you also don’t need a minimum account balance, so you can get started right away.
The only thing I’m willing to pay for with earned income is my necessities—not luxury items.
Fast forward to today, I built my wealth until I became financially free. Once I became financially free, I was able to get my BMW back because at that point I felt I could truly afford it.
- Related Article: Why You Need A Financial Wellness Coach
How To Stop Keeping Up With The Joneses?
Now that you understand why you should stop keeping up with the Joneses, let’s talk about how to eliminate your urge of wanting to splurge to keep up with the status quo.
Stop Trying To Impress Others
As humans, it’s only natural to compare ourselves to those around us. Subconsciously, we look at those around us for confirmation of our social and economic status.
The way we express our social and economic status is by showing off our houses, cars, clothes, jewelry, and material possessions. Just like a peacock fluffs his feathers and a lion flaunts his mane, humans flaunt their material possessions.
Subconsciously, it’s only natural that we want to display those signals ourselves. However, this natural urge is doing more harm than good. Buying things to keep up with the herd, or even worse, because of low-self esteem, hurts your financial future.
So to stop keeping up with the Joneses you have to fight that feeling of trying to impress others and not care so much about what others think about us.
At the end of the day, the bill will come due and everything will come crashing down. It may happen as bankruptcy, foreclosure, a mountain of credit card debt, or being poor and penniless in your golden years. When that happens, those people you were trying to impress won’t be there to help you.
Again, as humans, we love to fit in with the crowd because we fear that people won’t like us if we’re too different. But what makes you different is what makes you beautiful. Learn to be comfortable being yourself. If someone doesn’t like you for who you are, it’s their loss!
In other words, don’t buy a BMW because your neighbor has a BMW and you want to be like her—buy a BMW because YOU like BMWs (and of course because you can afford a BMW…lol).
It’s crucial to be yourself if you want to stop keeping up with the Joneses.
Do Things To ACTUALLY Be Rich (Not Appear Rich)
It goes without saying that we all like nice things and want to live a comfortable life. So to accomplish that you have to actually DO things that will make you rich (instead of working so hard to appear rich).
Here’s what you do if you want to stop keeping up with the Joneses and actually have money…
1. Make A Savings Plan
Start by making a savings plan. You absolutely NEED a budget.
There is no way you can build and maintain wealth if you’re not monitoring your spending.
If you’re just starting out, you can download this FREE Monthly Budget Worksheet.
However, if you want to get serious with your savings and need something a little more sophisticated, you can get my Monthly Budget Template. This is the template I actually used to save $300,000 and it is the same template I use to this date.
Another option is you can try my Personal Finance Binder. I’ve been using these worksheets in conjunction with my spreadsheets.
This option is great if you like to write things down and see them on paper (you can also write on a digital copy by using a note taking app). It’s over 55 pages worth of printables to help you manage your money.
You will love this Personal Finance Binder because it helps keep your money organized and you can see everything in one place. You can use the Personal Finance Binder as a replacement to the budget spreadsheets or together as I do.
I have a lot of friends that make well over six-figures and they still live paycheck-to-paycheck. And we all know of people who win the lottery or rich celebrities that go broke.
It does not matter how much money you earn if you’re not tracking your spending.
- Related Article: 10 Habits Of Successful People (That You Should Have Too)
2. Make Financial Goals
Having financial goals are important because people who make goals usually achieve them, and achieve them much faster than those who do not set any financial goals. The reason for that is because goals give you more focus, allows you to track your progress, and help you stay motivated to achieve your task.
When setting your goals, use the acronym SMART. SMART stands for: Specific, Measurable, Achievable, Relevant, and Timely.
You will be able to achieve your financial goals quicker by having your goals written down and planned for. Use my Financial Goal Planner to help you make your financial goals.
It will help you get your thoughts organized and take action.
If you’re just getting started, you can use this FREE Daily Goal Planner to help you do something every day to work towards your financial goals! You must take action if you wish to achieve your dream of financial freedom. Every day you need to do something that moves you towards your financial goal.
Start by asking yourself what do you want out of life? Where do you want to be next year, five years, ten years or thirty years from now? Make goals and prioritize them.
I would start by establishing one big long-term goal, and then break it down to smaller more specific goals or milestones. People who identify their goals and work towards them usually accomplish their goals, and accomplish them quicker.
- Related Article: How A Financial Goal Planner Will Save You More Money
3. Increase Your Income
If you want to actually be rich (and not just appear that way), you need to make a decent salary. Therefore, if you’re not paid well, you need to increase your income.
There are so many other ways you can make more money. For example, you can increase your income by:
- Making more money in your current job;
- Moving to a company that may offer more room for advancement;
- Finding a part-time job;
- Starting a side hustle or part-time business; or
- Establishing passive income.
If you want to read more about how to make more money, check out my article “5 Easy Ways To Increase Your Income Streams” where I go into more detail.
So, find a way you can increase your income today.
This is crucial to invest your money if you want to grow wealth. You cannot only save your money to create wealth, you HAVE to invest your money.
In fact, saving money alone is counterproductive to achieving financial freedom because of inflation. Inflation is the rate at which the general prices of goods and services rise, and as a result, the purchasing power of money falls.
In the United States, the historical average rate of inflation is approximately 3%.
If you are only saving your money, and not investing it, your money is actually eroding every year. This is because the cost of living is increasing faster than any rate of return offered to you by a bank.
There are so many ways you can invest your money. Some ways include investing in stocks, bonds, real estate, and/or a business. You want to invest in things that produce income and increase in value.
If you want to learn more about investing, you can read my detailed article “Best Ways To Start Investing For Beginners: Investing 101.”
Buy Assets That Go Up In Value
Don’t get me wrong, although I am frugal in a lot of areas in my life, I still do have an expensive taste for certain things.
I try to only purchase luxury items I think will make me money in the future.
So for example, if I want to buy a luxury bag, I would try to buy a timeless piece—like a Chanel classic flap bag—and nothing trendy because timeless pieces go up in value.
Taking the Chanel medium classic flap bag as an example. The style of these bags hasn’t changed much since 1955. These bags never go on sale, and the prices increase on average 15% each year.
So, let’s say you purchased a Chanel medium classic flap bag in 2010 it would have cost you $2,850. Today the bag is will cost you $6,500—that’s an increase of $3,650 and almost a 130% return on your money.
But let’s be realistic, most people buy a Chanel bag to wear it—so assume the bag is in good used condition, it would be worth approximately $5,000 today. As you can see, if I decided to sell the bag I would make money.
Be clear, I am not endorsing buying Chanel bags as a form of investing—far from it. My point is I have started to look at my purchases differently.
I try to surround myself with assets when possible. If my purchase is not an asset at the time, I think of how I can possibly turn my purchases into assets.
Finally, when I do plan to splurge on myself, I only do so with the money I make from my assets. I never spend the principal of my investments when splurging, only the interest.
Stop keeping up with the Joneses in order to appear rich. If you REALLY want to be rich, and not just appear rich, you have to do what rich people do. Rich people buy assets that make them money, and then use that money to buy their luxury items. Rich people don’t work for money; they make their money work for them.
- You Don’t Need A 6-Figure Income To Be Financially Free
- How I Saved $300,000 In 4 Years
- 9 Simple Baby Steps To Financial Freedom You Need To Take
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