You’ve probably heard of “keeping up with the Joneses” but the Jonses have evolved a lot over the years and today we have more access to the Jonses than ever. It wasn’t too long ago we only had the people in our work place, church, kid’s friends and community to compare ourselves to. But there have been 2 major developments in recent years driving our insecurities as parents.
For one, our parents (mostly baby boomers), have had explosive growth in income and standard of living. Homes, automobiles and everything else has gotten bigger, better and more expensive. Economic growth over the last few decades has been nothing short of amazing. Yes, there have been a few hiccups along the way, but for the most part stocks and real estate are up significantly. Have you heard the disclaimer, “past performance doesn’t guarantee future results?” That’s because I can almost guarantee we won’t see the same level of economic growth over the next few decades.
We forget that most of them didn’t go to college right out of high school, they got married younger, started careers earlier and it took them a lifetime to get where they are today. Yet we graduate from college, get a job, get married, have some kids and then expect that by 30 we should have created the same lifestyle that our parents currently live. We forget that when we were little kids being raised by those same parents, we didn’t have nearly the excess and resources they have today. Yet we expect ourselves to deliver that lifestyle as soon as we start a family. We either didn’t know or don’t remember the sacrifice and discipline our parents exercised throughout the years. After all, their parents lived through the Great Depression and likely instilled a healthy dose fear of in them. Their desire to protect us from the struggle they experienced ultimately kept us from learning the lessons they learned as well.
It’s A Much Smaller World
Next, we have the advent of Social Media and the constant stream of the images and videos of the Joneses and their picture-perfect lifestyle. They never seem to work or have any problems, yet they’re always on vacation. The beach this week, then the mountains, off to the big city and don’t forget about the mission trip to Africa. With BILLIONS of people online and thousands of connections, someone is always moving into a new home, buying a new car or some other gadget. Let’s face it, all these people are trying to project some picture-perfect life that doesn’t exist. In reality, they’re just trying to fill some insecurity.
Nobody ever talks about the mountain of debt they are drowning in or how they lie awake at night worrying about how they’re going to keep up this charade. What if every time you saw one of these post, you got a glimpse at the person’s net worth and balance sheet. You could see all their assets and liabilities. How much they save. How much they spend. Their debt to income ratio. Their projected net worth at retirement if they keep doing what they’re doing. I bet you would be shocked. The comments below the post would read something like, “Are you insane? Why would you buy a BMW when you should be buying a used Toyota?”
A Perfect Example
How do I know it’s true? Because I was that guy. When I was ignorant and didn’t understand how much those decisions really cost, I regularly bought new, very expensive cars. The dumbest of which was a BMW 760Li, which was nearly $100K. Now I have 3 cars for my family, all of which were bought used, at a substantial discount and have well over 100K miles on them. I seriously drive a 2004 Toyota 4runner with nearly 200K miles on it. It died on me last week and I was so worried that I was going to have to buy another car. Not because I can’t afford another car. I’ve got a healthy business, multiple six figure income and good credit. Of course, I could buy a car, but I don’t want to. There are far more important and productive things I could invest that money in. I was thrilled to find out that all it needed was a radiator and some TLC (lots of major maintenance stuff).
One of which was a battery. While I was having the battery installed and talking to the nice young man, I ask what kind of car he drove. He points to the car a few spaces over and I’m speechless. It’s a fairly new E-class Mercedes Benz. This guy works behind the counter at AutoZone! I’ve owned cars like that. I know what they cost to maintain. My 4runner cost me about $1,600 to fix, which I paid for with a debit card, not credit card and is good for another 30,000 miles. If anything happens to this poor guy’s car, he’ll be in more debt.
Level The Playing Field
Whether it is your parents or a complete stranger, when we compare ourselves to other people, it isn’t a fair comparison. We normally take their best qualities and assume their lives are perfect. But we know all of our faults and insecurities. So, we compare their best to our worst, which is always a recipe for jealousy or frustrations or worse yet, another bad financial decision. A decision that compounds your anxiety and financial stress. If you want financial peace and are ready to get your $h*t together, but just don’t know where to start?