Jumat, 18 November 2011

Avoid Debt: Forget about the Joneses

Who hasn’t felt the need to 'keep up with the Joneses'?

Whereas social status once depended on your family’s name or title, the global rise in consumerism has also given rise to much greater levels of social mobility. Whatever your view on increased consumption, one of the negative aspects of it is that with so many different products on the market, we become increasingly likely to define ourselves in comparison to how much more or less our social peers purchase than us. It doesn’t even seem to matter what social sphere we belong to, as the desire to be socially accepted or to create social envy among peers impacts everyone. Not only can this social one-upmanship lead to unhappier lives, but by needing to spend more money in order to be socially accepted, we are also running the risk of spending more than we can afford. The price of ‘keeping up with the Joneses’ can be an expensive one that can lead us to debt.

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So why is continuously striving to 'keep up with the Joneses' so dangerous?

Firstly, you’ll never win. There are always more ‘Joneses’ out there. If it isn’t your next door neighbor, it will be other parents from the school run or your colleagues from work. And with increasing glottalization, now we have to keep up with everyone that we see on the TV and internet too.

Secondly, consumerism is a drug. Although we all need to make purchases in order to survive, if they are for the wrong reasons – for example due to a feeling of social inferiority – you are entering dangerous financial territory. Perhaps your neighbors drive more expensive cars or perhaps you are going through a divorce. Whatever inadequacy you are feeling is not going to be solved by purchasing consumer goods. And it is a perilously slippery slope if you can’t afford it.

Finally, and perhaps most importantly, there is very little proof to suggest that consumerism is in any way linked to happiness. Perhaps the greatest consumerist society is the USA, and rarely does the USA come out top in terms of studies of global happiness. Indeed, if you read scientific studies such as the Happy Planet Index (HPI), it would appear that countries such as Costa Rica place much less value on consumption and often contain much happier people. Why is this?

It may well be that frugality is actually a much better recipe for happiness than trying to ‘keep up with the Joneses’. What we really should value most in life – things like family, friendship, trust, love, compassion – do not come from money. Although money and what it buys may often seem to provide us with liberation, if we give it too much importance then our spending can spiral out of control and lead us into debt. So the next time you feel compelled to make ‘that’ purchase, you may want to ask yourself why you ‘need’ the product, and to remember the old adage that “the best things in life are free”.

This is a guest post by Mark, written on behalf of ClearDebt.  The ClearDebt site offers advice on personal debt and credit card debt.

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