Bankrate offers a list of the 10 commandments of personal finance that I'll be sharing with all of you as well as providing my thoughts on their selections. The commandment for today:
III. Thou shalt not try to keep up with the Joneses
"Buy things for you and not because these items impress your neighbor or friends," Sebold says. "Don't give into your children who say, 'I have to have it because everyone is wearing it.' If you can't afford it, don't buy it."
To me, this is a key part to spending less than you earn. Many people get sucked into having to have what their neighbors, friends, co-workers, family, etc. have and thus start spending money they really don't have. Then the credit card debts pile up and shortly thereafter they are in a paycheck-to-paycheck cycle that never ends (and often gets worse.)
So, like we discussed in the last commandment, it's simply better to spend less than you earn (and forget about the Joneses -- they're in massive debt anyway.) ;-)
For related thoughts on this topic from Free Money Finance, see these posts:
The problem isn't so much that people try to keep up with the Joneses, but that they're also trying to keep up with the Smiths and Browns and Ericksons and Fletchers too. Each family has a certain amount of discretionary money to spend on frivolous things, but we usually spend it on different things. (Our family, for example, buys wine; my parents on the other hand have cable and expensive cell phones.)
When you look around you, it often seems like people have all this stuff. We see the collection of discretionary items as belonging to a single family, not spread out among different families. When we try to keep up with the "collective Joneses" is when we get into trouble.
Posted by: Outdoorgrrl | January 25, 2008 at 11:59 AM