Tuesday, January 23, 2007

Keeping up with the Joneses or not?

Okay, so I enjoy surfing the web and reading personal finance message boards. Some are interesting about investing and saving, while others are cries for help out of debt. A common theme for many people is the idea that enjoying any of life's luxuries is a crime.

A lot of these people are getting out of debt, were previously in debt, or have just finished getting out of debt. They make automatic assumptions about people who use CC or use any money "unwisely."

This is a serious pet peeve of mine, when someone said that "Oh, and there is the personal satisfaction that I'm realizing that even though my friends might have better clothes and manicured nails, spend literally $1000 on christmas and birthdays for thier kids, I have more financial security, and my daughter will benefit from that also. I love my friends but I'm realizing that I'm actually better off than they are."

I called the person on it and asked how do you know the other person's real financial situation? How do you know that the person buying better clothes, nice nails, and spending on gifts cannot afford a $1k Christmas? How do you know the person you think who is keeping up with the Jonese cannot afford to do so?

I guess what bugs me is people making these snap judgements about others. How do you know the person didn't inherit a lot of money? Or makes a lot of money working? How do you know they don't have any bills, no kids, very minimal expeneses? I think that people are quick to assume and judge because they are jealous. They resent that their income doesn't allow them to enjoy "luxuries" in life. But that's because of choices THEY made. They choose to eat out, they choose their careers, they choose their homes/cars.

I'm one of those people who enjoy getting their nails done. In fact I want to have it done today if I have time. Also in the past 18 months gone to China, Japan, Switzerland, Canada, and Hawaii. We also enjoy travelling. To people who don't know us, their snap judgement is "your in debt up to your eyeballs and can't afford it" Truth is yes we can, enough said.

Another common misperception is assuming those who use CC are in debt. If 25% of Americans don't have CC, and 30% pay it off in full, that means the majority of Americans are not in CC debt. However the 45% minority have more than enough to spread it around to be an average of $8k in debt.

But then the DR followers try to quote "but CC spend more." Not really, if you know exactly what your budget is, it doesn't matter how the money is spent. I can tell you what my balance is on any given day and when it's close to my limit I just stop spending. I've lived like that for 10+ years, I doubt it's going to change now.

People who are in CC debt don't have the self realization or control to know that a CC is cash on a card. If you charge it, you have to pay for it later. It shouldn't matter whether you pay in cash now or 30-60 days later. Imagine instead you had a check register and wrote out every single charge against your cash, it's the same principal. Except you can get 1-5% back and it's easier to track every single penny you spend.

My point is that so many people judge others and make these assumptions about whether or not people are keeping up with the Joneses. They never assume that people are able to actually be the Joneses sometimes...


Matt said...

Thank you. This post sums up exactly the attitude that keeps me off of most of the PF forums, and makes me detest the periods when the bloggers I do read go on vacation and have guest posters.

They don't know me. They don't know my situation. They don't know my finances. And yet they presume to condescend about my choices in life.

Making the right choices isn't a single correct answer that applies to everybody. Frugality is about cutting the expenses for things that DON'T MATTER, that you DON'T CARE ABOUT, in order to have money for the things you do.

The whole "work yourself to exhaustion and deny yourself to poverty so you can 'retire' one day and be rich" seems a very depressing way to live. And it's certainly not the only one that's fiscally responsible.

Living Almost Large said...

Thank you matt, that's my point. It's about enjoying the life you chose and not having to justify it to others.

Anonymous said...

I enjoyed the post and agree that this is a common assumption made. I know plenty of folks that can live as large as they want and do so responsibility. I think it is just sometimes comforting to think that others are keeping up appearances instead of acknowledging that others may have their financial houses a little more in order. I try to balance my assumptions on both ends of spectrums.

Living Almost Large said...

It really is, I too want to be jealous, but I try to not allow myself to be. I usually try to think positive and say well they must be raking in the dough! I want to be them one day.

Anonymous said...

Great post -- and a great reminder to me, especially. I'm guilty of the 'they're living beyond their means' judgments myself. I assume that other people think the same of our spending habits, but I never really see/hear it directly. We're big on travel and entertainment, too, but are frugal in less overt ways (except the modest car and abode are still pretty obvious frugalities). Funny, then, I'm realizing as I write this, how my judgmental ways usually surface when I see folks with big houses and expensive cars. Like you said, maybe they can afford it. Like I said, nice reminder.

Of course, I'm not sure I'll ever be able to lose my pre-disposition to judge on those two indulgences just because to me, these areas are such great opportunities for savings. I am discouraged when I see people I know upgrading to million dollar homes when their current houses would do. I guess I'm more in line with people who indulge more frequently on smaller items like clothes and nails and such. It's all personal preference to be sure and the definition of 'afford it' varies, really.

We could certainly afford a larger home and a fancier car, but not without jeopardizing other financial goals. I guess that's really at the root of the judgment is that it leaves you wondering/worrying if they are neglecting to establish financial goals. But likewise at the root is that it's none of my business.

Enjoyed the post... sure made me think today. Hope that my ramblings make some semblance of sense. First time reader here. Gonna add you to my RSS now.

Living Almost Large said...

Denise, thanks. It's a general problem is we always judge others. We have no idea whether people can really afford things or not.

I just wrote this post so that people would stop and think a little before making a comment online or in real life.

It would be too easy to say something inappropriate without thinking. That can easily lead us into trouble.

Maybe we can all be glass is half full people.