2019-09-12T13:37:14.366+10:00 Spending money to keep up with the Joneses will deliver short change, especially if you’re looking to build financial security

The real cost of trying to keep up with the Joneses

The real cost of trying to keep up with the Joneses

The real cost of trying to keep up with the Joneses

Georgina Dent | April 28, 2019

Spending money to keep up with the Joneses will deliver short change, especially if you’re looking to build financial security

“We just can’t drop $60,000 every year on a holiday,” he said casually.

It was a throw-away line from a dad with kids that made me almost choke on my coffee.

We had been in the queue together at a local café, both waiting for takeaway coffees, when the subject of skiing holidays came up.

Another dad brought it up: he was heading off to the snow with his family in the coming days.

My cappuccino was in hand when the first dad confessed they were skipping their annual overseas trip to the snow due to the mammoth cost.

It was when he specified $60,000 as the price that I struggled to keep the hot caffeine contained inside my mouth.

The price tag itself surprised me but it was the casual manner with which that gigantic number was mentioned that shocked me more.

Taking a family of six to the US to go skiing is obviously not a cheap exercise.

However, who knew there were families who didn’t just contemplate spending $60,000 on that type of holiday but actually did it – and believed that not to be so anomalous as to even hesitate before mentioning it to an acquaintance before 8am?

Personally, I appreciated the candour. It confirmed precisely how unattainable such holidays are to the vast majority of households and it was novel to have an actual number in my head, rather than just a rough guess about what that type of vacation might cost.

Holidays have long been a barometer of sorts for wealth but social media has certainly amplified the visual proof of what the Joneses are doing on their holidays.

It rarely looks cheap.

Pretending this stream of images about other people’s lives doesn’t create social pressure is fantasy.

According to new research in a Financial Fitness whitepaper commissioned by Mortgage Choice and CoreData, 35% of Australians admit to feeling pressured to maintain a certain type of lifestyle.

"While 35% of respondents said they felt pressure to keep up appearances, this surged to almost 50% among respondents aged 30 years and younger,” Mortgage Choice chief executive Susan Mitchell said.

“In contrast, the research found that only 20% of Australians aged between 51 and 60 felt pressured to keep up appearances.”

“This is unsurprising in an age where image is everything, particularly for younger generations and avid users of social media, who are bombarded constantly by the enviable lifestyles of Instagram and YouTube influencers,” Mitchell said.

“Although it’s very tempting to keep up with trends, it can be a dangerous strategy to live for today and not have a strategic plan for your longer-term financial security.”

Some Australians even admitted to sacrificing their health in order to maintain a particular lifestyle.

“Of particular concern was the difference between women and men who are choosing not to make their health a priority,” Mitchell said.

“More than 42% of females say they forgo dental check-ups, versus 35% of males, and 32% of women are forgoing health insurance, versus 30% of men.”

This accords with the broader disparity between men and women that the Financial Fitness whitepaper revealed.

A little over 37% of females said they felt pressured to keep up appearances, compared to 32% of men. Coupled with the fact that, on average, women earn considerably less over the course of their working lives than men do, this is alarming.

“Women, in particular, seemingly have the financial odds stacked against them in many ways,” Mitchell said.

And it’s not without consequences: of those respondents who said they were feeling financially stressed, females said that stress was negatively impacting their overall wellbeing to a larger extent than males.

More than 18% of the respondents said they save nothing each pay cycle, while a little over 8% said they spend more than they earn each month.

Ultimately, spending money merely to keep up with the Joneses will deliver short change, especially if you’re looking to build or attain financial security.

And if your neighbours regularly ski overseas? Take my word for it, it’s probably best not to even try and keep up!

This article was originally published by The Sydney Morning Herald on 19 April 2019. It represents the views of the author only and does not necessarily reflect the views of AMP.

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