the shame and the glory
“Don’t feel the need to keep up with the Joneses” is one of the rallying crys of the personal finance blogosphere. I’ve always felt that someone who’s new to managing their money comes to this philosophy with a great deal of excitement. You feel liberated the first time you buy a new cell phone/shoes/shirt and realize you don’t need the iPhone, or the Gucci loafers or the Boss shirt even though Fred in the next cubicle has all of those things. You wear your boring old Motorola phone or Rockports or Arrow shirt, feeling slightly abashed, until you realize it doesn’t matter that much. Nobody noticed.
But then it kicks up a notch. You start buying tubs of Maxwell House instead of Starbucks because, well, Starbucks is one of the villains of the personal finance world. You reduce all of your consumption; you buy the cheap bottle of Scotch instead of a top-shelf brand. You do it all because you don’t need to keep up with the Joneses, those fools. But you’re drinking Maxwell and Two-Dollar Rosie and gloating over your retirement account.
We own two cars (one was an inheritance, and one we paid cash for). We share them, but “mine” is a 9-year old Pontiac. It works, although we’ve had enough “small” problems with it recently to give us pause. The problems have never affected the engine, though, so there’s no reason to get rid of it. I’d like to get rid of it. I’d like a smaller car with better mileage, but when I’m honest with myself, I would really just like a new car. And I won’t, in large part because I don’t want to be “keeping up with the Joneses.” We live in a neighborhood in which most families appear to have a one-German-car quota (at least), and I’m not talking about Volkswagens. Our minivan and Pontiac are bringing up the rear in terms of car “status.”
You can be a vegetarian by eating nothing other than cheese pizzas and french fries. You’re missing the point of vegetarianism, of course. You can also avoid “keeping up with the Joneses” by denying everything, but you’re missing the point of saving money there, too. You don’t save money so you can save more. You save money so you can spend it on things you value instead of things you don’t. I know that as much as I might want a new car, it’s not going to make me happy. But if I could keep up with the Joneses by buying a new car, and it made sense for my life, I might. I work in an evironment where a lot of websites are blocked by my corporate client – a BlackBerry would make a lot of sense for my side businesses. Any way I look at it, a luxury car wouldn’t.
I can’t say that saving money is wrong, but the more I read the more I wonder about the unnatural way even the “right-thinkers” have to behave these days. We live in a society where the government expects us – basically – to fend for ourselves on health care and retirement but exacts horrific taxes from us to pay for decades of wars, failed social programs and failed tax cuts. Entrepreneurs are crippled by health care costs. Corporate workers live in terror of retirement, and our tax dollars go to propping up executive bonuses at AIG. I don’t mean to ease over to a populist rant, but at some point you have to wonder whether saving your money – particularly in the stock market – is just playing into their hands.
The “glory” is spending money on the things you love. The “shame” is avoiding spending money JUST to avoid spending money. Don’t save JUST for the sake of saving. Embracing dogma is short-sighted. Keep up with the Joneses when it makes your life better. You’ll know the difference. I’ve seen people who saved enough for a bright future brought low by health troubles, and I’ve seen people who farted through life do just fine because they managed to have the good luck or geneaology to avoid health troubles. You can only know the present. Too many people avoid keeping up with the Joneses simply to deny themselves today. I don’t buy the new car because I can use that money on something I love – my kids, my wife, a nice house – but not because I’m hoping that the saved money will save me in the future. It may not. Focus on benefit today, not a hoped-for benefit tomorrow.
photo by digital cat
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I like especially two points of this post.
1. 'Spend money on the things you love.' – Sometimes we may be too focused on the future and we forget to live right now.
2. '“Don’t feel the need to keep up with the Joneses” is one of the rallying crys of the personal finance blogosphere.' – This is a good rallying cry because our preferences are all personal. The Joneses might like something I don't really care for. That part makes sense to me. But the funny thing about this statement is that “keeping up with the Joneses” seems to be a motivator for many bloggers. Bloggers are keeping up with their own Joneses, the other bloggers, in the way they blog and try to make some extra income….
Dogma can kill you in anything. To believe something without thought is very dangerous. Now if keeping up with the Joneses is causing you to overspend and get deep in debt.. by all means break the hold and stop the insanity. But if buying a German car fits in your budget, your lifestyle and your desires… then buy one.
I agree that saving money to put in the stock market may not be the greatest idea. I was commenting on http://www.thedigeratilife.com about a post she made on the stock market and her expectations and it ended up being a fairly long post on my blog with some good free resources.
http://www.askthewealthsquad.com/blog/stock-mar... You and your readers may find it interesting.
I much prefer to build a small sideline business. I think it may be the only way to stay ahead of inflation but even then our government is making it a tougher challenge with new regs, taxes and requirements. I prefer it because there it depends on me and my plan .. not some CEO I don't know and a business I may not understand.
No, no, no. The key is to spend your money on what you need, not on what your neighbors have. I couldn't tell you what kind of cars my neighbors have, and I'm pretty sure most of them couldn't tell you about mine. You acquire what you need, and what makes you happy. It has nothing to do with those around you. If you can internalize that message, I guarantee you will be happy.
Nice insight! There's a point where asceticism…well, has no point. Unless you're saving for some reason, denying yourself can morph into a kind of pathology.
Now…my feeling is that instead of keeping up with the Joneses, you should BE the Joneses. The trick is to do something everyone else wishes they'd done: do it first, and do it conspicuously.
Some years ago (quite a few somes), I took it upon my lush young girlish self to haul a shovel and a wheelbarrow into the front yard and work like a freaking horse to upgrade and renovate the landscape. Pretty quick, the guy across the street starts to fix up his yard. And then another house gets spruced up.
Guy Across Street to Lush Young Woman's Husband: “After seeing what you did, I felt like I had to keep up and do something to our house, too.”
LOL! That neighborhood gentrified fast and is now one for the most irrationally overpriced in the city.
“You don’t save money so you can save more. You save money so you can spend it on things you value instead of things you don’t.”
What a great quote. It's amazing how we always seem to be short on cash. And yet, if people just stopped spending on things that they didn't really make them happy, they would be a whole lot closer to reaching their financial goals, if not making them.
We should approach everything we spend on with a simple little cost-benefit analysis like this.
Great post! I've never understood people who save for the sake of saving. I save for the sake of doing the things I love, whatever those things may be. Personal finance isn't really about giving up nice things. It's about giving up the things that don't matter for the things that do.
Great post! I've never understood people who save for the sake of saving. I save for the sake of doing the things I love, whatever those things may be. Personal finance isn't really about giving up nice things. It's about giving up the things that don't matter for the things that do.