“Keeping up with the Joneses” is a saying that has survived generations for a reason. It’s a natural human inclination to observe those around us and want something that they have. Our competitive instincts kick in and we want to know that we are as valuable as our societal counterparts. But keeping up with those Joneses can be an expensive and never-ending pursuit, so how do you fight this impulse to allow yourself to spend money on the things that will make you happiest instead of just competing with your friends and neighbors?
Not All is as It Seems
When it comes to finances, not all is as it seems. Since it’s such a private topic, your friends likely aren’t sharing with you how much is sitting in their retirement accounts, but chances are you’ve been to their house for dinner recently and noticed their new TV and furniture. While some people may be able to keep up with their spending and saving habits in a way that keeps them financially healthy, not everyone can manage that balance. Approach everything with scepticism… a large house and beautiful furniture is not an indication of financial health. In fact it could even be an indicator of future financial issues.
Figure Out What’s Really Important to You
If you’ve set your financial goals recently, you may already know the answer to this question. Maybe you’re working towards buying a home and saving for retirement. Maybe it’s important to you to be able to travel or to make your home a well-decorated oasis. Whatever it is that you want, make sure it’s what YOU really want and not what you think will impress others. Often long term goals, like saving for retirement, are hard to prioritize over tangible items because the benefit feels so far off and out of reach. Automating your savings and investments to be removed from your paycheck regularly is the best way to overcome this. Sure this means that you will be taking home less money for that fancy car, but ultimately that car will break down, but you will still be able to retire.
Your Happiness is Paramount
Everyday we’re bombarded with images of “things” via TV and social media. Whether it’s a wardrobe to be envied or a huge house with a massive custom kitchen, it’s hard to separate those images from how much they are truly worth. Knowing yourself and what will ultimately make you happiest is the best thing you can do to stop comparing what you have to those around you.
Let your budget drive what you can afford and your goals direct what you choose to do with your budget. When you determine your goals, think about what will make you happiest in the long term. Buyer’s remorse is all too common, while financial security is completely underestimated in its impact to your overall health and happiness. It can take a weight off of your relationships and give you the freedom to pursue other passions. Isn’t that more valuable than the “stuff” you could have bought with that money?
Written By: Lindsay Dell Cook
Lindsay Dell Cook is a CPA, writer, and founder of Budget Babble. She lives in Philadelphia with her uber supportive husband, and enjoys taking their adorable mutt for walks or reading a good book while buried under a pile of cats.