Most of us have
an ingrained, unconscious drive to keep up with the Joneses (or, as we’re more
likely to think of it, the status quo). But instead of creating fulfilling
lives, we’re actually making ourselves anxious and unhappy.
By Donna Skeels Cygan
The
American Dream has evolved past the humble “white picket fence.” Way past. We all strive for the “nice”
home (as defined by HGTV and Pinterest) as opposed to the cozy one, keep a
perpetual car payment instead of driving an older model, and chauffeur kids to
an endless array of pricey activities rather than sending them outside. Call it
creeping consumerism, entitlement, or plain old peer pressure. The point is, we
see our hectic and expensive lifestyles as normal—and
it’s time we realized that keeping up with the proverbial Joneses is actually
extravagant and irresponsible.
The
Joneses you’re trying to keep up with aren’t the doctors and lawyers two
streets over. They’re the middle managers, teachers, and laundromat owners next
door, and—guess what?—they’re as anxious and unhappy as you are. That’s why I
want to reframe our perspective on what’s “normal” and adopt a simpler
lifestyle with less debt and stress.
Fulfilling lives are lives based on your core values, not the ones society
dictates. It’s amazing how many of us feel we have to live in the right neighborhood or drive a new car just
because our peers do.
Often,
happiness means making a deliberate choice to stop keeping up with the Joneses. You have to pay attention and get
mindful about where your money goes. It’s worth the effort. The consequences of
living beyond our means outweigh the short-term satisfaction we feel when we
pull out a credit card to make another upgrade. Lavish spending just does not
make us happy at all (at least not for long). Sane, smart money management does.
I
point to Denmark, which, according to data collected by the Gallup
Organization, was ranked as the happiest country in the world in recent years.
The results are summarized in the World
Happiness Report 2013, and the U.S. came in at 17. While many
factors contribute to Denmark’s
ranking, Danes’ attitude toward money is certainly one of them.
In
Denmark, modesty is a virtue, and showing off is looked down upon. Overall,
Danes don’t feel the need to pursue bigger homes, nicer cars, and more
fashionable clothes—and consequently, they carry less unnecessary debt. Danes
also place a high priority on living a socially balanced life, setting aside
time to spend with their families and friends.
In
my book The Joy of Financial Security,
I combine financial expertise with research from psychology, neuroscience, and
economics to shine a light on the complex relationship between money and
happiness. Here, I highlight nine financial and psychological benefits of
cutting ties with the Joneses:
You’ll set a
sane, sustainable example for your children. For many families, choosing to
stop emulating the Joneses will mean making significant, tangible changes in
everyday life: canceling your premium cable package, dining out less, or
setting a limit for back-to-school clothes spending, for example. And that’s a
good thing, because it provides you the opportunity to sit down with your
children and have an important financial conversation.
Walk
your children through the changes you’re making and point out how much money
you’ll be saving. Then, explain your reasoning: “We are saving for your college
education…we are saving for our retirement…we are living within our means.” Be
sure to point out that being in control of your finances positively impacts
your peace of mind.
You’ll be able
to set up an emergency fund. Emergency funds may not seem like a top
priority…until you absolutely, positively need one because you lost your job,
or because the septic tank flooded, or because your car broke down.
Often,
people end up putting unexpected expenses on their credit cards when they don’t
have an emergency fund to tap into. It can take years to climb out of the deep,
dark hole the debt creates. Don’t underestimate the peace of mind an emergency
fund can bring, whether you end up using it or not. If you don’t already have
enough saved to cover expenses for six months, make this your top priority.
You’ll be in a
position to fund your future. You know that you should be aggressively saving: for the traveling you want to do, to
help fund your kids’ college educations, and especially for your own
retirement. But when you’re figuring out how to allocate each month’s paycheck,
other (often unnecessary) expenses always take precedence, despite your best
intentions. This trend is more widespread than you might think: 36 percent of Americans, including over
25 percent aged 50 to 64, have yet to start saving for retirement.
Whatever
your age, it’s crucial to stop living on the financial edge and start increasing
your savings percentage. Don’t wait for that next raise, or until your car is
paid off. Ditch whatever excuses you’re using to stall. If you don’t make
sacrifices now, you will have to make
them later. It’s a sad fact that a lot of the Joneses will be strapped for cash
in their golden years, and by then, you’ll want to be well ahead of them, not
just keeping up.
After
building up your emergency fund, I recommend making your savings automatic,
whether you’re funneling money toward an employer-provided 401(k), a Roth IRA,
a taxable investment account, or something else. Even if you’re able to set
aside only $25 or $50 per month initially, it’s a step in the right direction.
You’ll soon see improvement, and knowing you’re taking control of your money
feels great. On my website, www.joyoffinancialsecurity.com, I offer
resources and tools to help you calculate and increase the percentage of your
income you are saving.
You can work
less and live more. Here’s
the great irony of keeping up with the Joneses: You’re spending, spending,
spending on a big house, a new car, and all the latest electronics because these
things are the status quo, and you feel that you deserve them. Then you have to
work even harder to sustain the lifestyle that you’re not really enjoying at
all because you’re stressed and exhausted. It’s a vicious cycle that many
people never break, because they never realize that the source of their unhappiness
is, in fact, all of the “stuff” they thought
would bring them joy.
I’m
not saying you’ll be able to quit your job when you rein in your spending, but
you might find you can slow your soul-crushing pace, or that you can cut back
on the overtime. Even a few extra hours each week can be applied to living a
healthier life (perhaps through exercise), to hobbies, and to nurturing
relationships with friends and family. And best of all, those activities won’t
be overshadowed by gnawing worries about money.
You’ll feel less anxious and more at
peace. Self-deprivation and frugality may not
sound like fun. But the truth is, controlling our money feels good. Conversely,
spending without limits feels bad. The initial rush you may get from treating
yourself to everything you don’t need wears off—and it does not bring more fun,
greater happiness, or better memories. In fact, perpetually low account
balances and credit card debt often lead to long-lasting anxiety and
unhappiness.
There are many things in life we can’t control. That’s why it’s so
important to pay attention to the things we can
control and to be aware of their impact on our happiness. You control where
you go, what you do, and how much you spend. You’ll find that when you control
the controllables, you’ll feel much more at peace—because you aren’t worrying
about how you’re going to pay for everything!
You can simplify
your life and zero in on what really matters.
Ever
notice how much time and energy a so-called “normal” life sucks up? You have to
clean, maintain, decorate (and redecorate) that spacious home. Electronic devices
and gadgets monopolize your (and your kids’) attention. Your schedule is
packed, and you’re constantly zooming from work to the dry cleaner’s to the
latest stop on the traveling soccer team’s tournament calendar. Not only are you
overstimulated, you’re exhausted! And most discouraging of all, half the
activities on your calendar don’t bring you any fulfillment.
Resolving
not to keep up with the Joneses forces you to clarify what your values are. Instead
of letting society dictate your priorities, you’re faced with the liberating
responsibility of reordering your life. Often, that involves simplifying—getting
rid of unnecessary and unwanted items, obligations, and self-imposed
responsibilities. This frees up literal and figurative space for you to make
new and wonderful changes, which will probably involve spending more time with
the people you love. Don’t forget: Psychology research shows that improving our
relationships with others is the number-one way to increase our happiness.
You’ll up your
gratitude quotient. When
you’re being swept through life by the current of consumerism, it’s easy to
fall into a “more, more, more” mindset: When
can I go on vacation again? When can I go shopping? When will I be eligible for
an upgrade on my phone? And when you’re not getting your “fix,” you feel a
sense of lack that distracts you from the present moment with its small
joys—like reading a book to your child or working in your herb garden.
Where
you place your attention determines your attitude, your behavior, and your
choices. Focusing on what you don’t have
increases stress, dissatisfaction, and financial irresponsibility. But when you
scale down your life, the many blessings you already have will become more
apparent to you. And when you’re grateful, you don’t need to fill some inner
void by acquiring more stuff.
Your priorities
can shift away from “things” to “experiences.” For most people
(and certainly for the Joneses), having a good time comes with a price tag.
From booking lavish vacations to eating at expensive restaurants to making sure
our homes are decked out with flat-screen TVs and sound systems, we don’t mind
pulling out our wallets in the name of enjoyment. (And often, we don’t worry
about the price tag until it’s too late.)
But
what if the finest things in life can’t be bought? Psychology shows that experiences
are always more impactful on our happiness than things. Take vacation, for example. Though they may not realize
it, most people would be happier pursuing quieter, more off-the-beaten-path,
yet still deeply fulfilling experiences—hiking, bike riding, or playing in the surf
with their kids—than crowding into some overpriced tourist trap. Do some soul
searching and ask yourself what really brings you joy before you get out the
credit cards.
You’ll be in a
position to give back. Living a life that’s meaningful to you instead of to
the Joneses will probably increase your margins of time, energy, and money,
making it possible for you to give back.
It
all ties together. When you’re living a life based on your own values and are
focused on relationships and experiences instead of “stuff,” you’ll find that
you want to leave a legacy that’s more substantial than a nice house and car.
And giving back (either with our time or our money) has been shown to increase
our happiness.
Despite our national tendency to overspend, I
am encouraged that the pendulum seems to be swinging back toward financial
responsibility. I point to a recent
study showing that millennials (also called Generation Y, born between 1980
and 2000) are funding Roth IRAs at a higher rate than older generations.
Apparently
they were paying attention during the 2008 financial crisis. They saw how their parents, friends, and
neighbors were severely impacted, and they are now more likely to save for the
future.
No
matter what generation you belong to, though, remember that a truly rich life
is based on strong relationships with friends and family, giving back to our
community, expressing ourselves creatively, leading healthy yet simple
lifestyles, and spending our money in a way that is in alignment with our
values.
About the
Author:
Donna Skeels Cygan, CFP®,
MBA, is the owner of the financial advisory firm Sage Future Financial, LLC,
and the author of The Joy of Financial Security: The art and science of
becoming happier, managing your money wisely, and creating a secure financial
future. She has
been recognized numerous times as one of the top financial advisors in the U.S. She
seeks to help her clients take control of their money in a way that maximizes
their happiness.
Cygan has contributed to articles and
has been quoted in national newspapers and magazines, including the Wall
Street Journal, the New
York Times, the Chicago Tribune,
Forbes, Kiplinger’s, and Investment
News. She has appeared on TV programs in New York,
Seattle, Portland,
Phoenix, Minneapolis,
and Memphis, as well as on many radio shows across the U.S. She
also enjoys speaking on many topics related to money and happiness. To
learn more, visit www.joyoffinancialsecurity.com.
About the
Book:
The Joy of
Financial Security: The art and science of becoming happier, managing your
money wisely, and creating a secure financial future (Sage
Future Press, 2013, ISBN: 978-0-989-77844-2, $24.95, www.joyoffinancialsecurity.com)
is available at bookstores nationwide and from major online booksellers.
