How keeping up with the Jones's hurts your personal finances
Everyone has been guilty of trying to "keep up with the Jones's"; what nobody tells you is that the Jones's are flat broke. It used to be that spending millions of dollars to go out or to make simple purchases only happened with celebrities and those who could actually afford it. Today however that is a different story. The lifestyle of the rich and famous has reached the lives of almost every average American person and is having an increasingly devastating effect. Here's how keeping up with the Jones's hurts your personal finances.
The measure of success
The need to be successful is evident among people everywhere. It seems that most people judge your success on how much money you make right; and also how much money you can spend. Because if you're making a lot of money you should be able to spend a lot right? The worst part about that statement is that the latter is and continues to be true, but the first part of the statement is not. In an attempt to "keep up with the Jones's" and look like you make a lot of money people are buying ridiculously expensive things.
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Credit
So how is it that our personal finances can get so out of whack; credit. Banks and credit agencies will pretty much offer you a credit card if you breathe. It doesn't matter if you have bad credit, no credit or good credit. They will find a way to weasel their cards into your wallet so you feel like you can spend spend spend. As you can already see, this can have a devastating effect on your personal finances. The more you spend on credit the more you have to pay back and soon you find yourself drowning in payments you can't afford. Every dollar you make is going towards paying off the credit card companies. And if you're like every other person who has found themselves tied up in debt, you're only making the minimum payments so you're not even paying anything off except the interest. What people need to realize is that success is not measured by how much money you make (or spend for that matter); it is measure by the quality of life you lead. Just because you make more money, doesn't mean you need to spend more. Try throwing some of that into a savings account for a rainy day. If you continue down this road you won't have any personal finances left to handle.
How can you get control of your personal finances?
1. Distinguish your needs from your wants. There is a big difference between buying something that you need and buying something you just want to have. It is a thin line these days because it seems that needs and wants have been somewhat confusing for some. Your needs are things that you cannot live without; food, water, toilet paper, shelter, clothes, etc. A want is pretty much everything else. It's really that simple. Go through your finances and cut out the things you're buying because you want them; not because you need them.
2. Set your priorities straight. While it may be humbling to see your neighbor drive up the driveway in his brand new Hummer, it should also provide you with peace of mind. Don't worry so much about everyone else. Take care of your family and yourself first; save some money for a rainy day; build wealth so you can live like you want later on in life. Your priorities should be about your own personal finances; not the guy you see spending loads of money on wasted things.
Keeping up with the Jones's can be exhausting, especially if you have nothing to keep up with. The Jones's may look happy and carefree, but in all reality are swimming in debt. Don't be the next family to follow in their footsteps. You need to educate yourself; learn how keeping up with the Jones's can hurt your personal finances and make a change today.
