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Keeping Up with the Jones' is Bad for Your Wealth


 

"Compare yourself to who you were yesterday, not who someone else is today."


-Jordan Peterson

 

Consider this scenario: your neighbor comes home with a brand new vehicle last weekend. You wish you could feel good for your neighbor, but they just got a new vehicle three years ago. What's the matter with these people, you think. You wonder how they could be so stupid. Then, you start thinking, "Hey, why shouldn't I get a car? I deserve it more than they do!" 


Then your other neighbor gets a new riding lawnmower. And your across-the-street neighbor gets a new snowblower. And on and on the cycle goes. Tempting you to chase those proverbial Jones'.


keeping up with the joneses

Potential Issues


As fun as it may seem in the short run to keep buying things to keep up with your neighbors, friends, and family members, there are issues to be aware of. 


Studies have shown that people who tend to try to keep up with the Jones' are more likely to suffer from compulsive buying disorder, gambling disorder, financial dependence, and financial infidelity. That is, the people who keep up with the Jones' are more likely to engage in out-of-control spending, gamble too much and too often, rely on others for their financial well-being, and keep money secrets from their loved ones. 


That's no way to live. 


Dangerous Comparisons


All of this comparing is bad for us. Nobody really ever takes a step back and appreciates what they have. We don't care that we have more than this person; we only care that we don't have as much as that person. The problem with this philosophy is that we are always looking at the bad and ignoring the good. This is a bad way to live. It's a fast-track way to become dissatisfied and it's very difficult to truly be happy. 


It's like this... 

hedonic treadmill

A better way is to embrace an "attitude of gratitude." Be grateful for what you have and really appreciate it. If you live in the United States, even if you are in a low socioeconomic status, you are in the top 1% of the world. You probably don't worry where your next meal is going to come from. You have easy access to clean water. Taking on an attitude of gratitude will get you to focus on the positives in your life and over time you'll become more and more happy (see Rick Hanson's book "Hardwiring Happiness"). 


This is better...


gratitude

Not As Easy As It Sounds


Now, the world would be great if we had a conversation like this:


Derek: Hey, stop trying to keep up with the Jones'; it will make you dissatisfied with your life.
You: OK. That is a great idea; thank you for telling me. I wish you told me sooner!

Unfortunately, these behaviors are driven by our money scripts, or beliefs that we learned as children that created rules we follow as adults. More specifically, these particular behaviors are governed by one type of money scripts, called money status money scripts. Some examples are:

  • My self worth is tied to my net worth