Have you ever heard the phrase “keeping up with the Joneses?” Do you know what it means? If not, it means to be in competition with the people around you as far as your home, car, clothes and other material possessions. While competition is sometimes a healthy thing, the one you have going on with the Joneses can be very dangerous and lead to issues in your personal budget and a potential financial crisis if you allow it to. A lot of people think that you need to go without to avoid living like the Joneses, that you have to live miserably, that you’ll never be able to spend money. That couldn’t be farther from the truth. You don’t have to go without to avoid living like the Joneses. You simply need to make wise financial decisions.
The biggest issue with the Joneses is that they never consider the consequences of their plans. Sure, they may have just bought a new boat, but now, they are $30,000 in debt and will be paying for that boat the rest of their life. They may have a million-dollar home, but again, more debt and more lifelong payments. When you make wise financial decisions to avoid living like the Joneses, you can still give your family the things that people next door have, but you can do it in a way that doesn’t destroy you financially. When y ou make wise financial decisions to avoid living like the Joneses, you agree to live frugally without being miserable; you agree to save money while building wealth; you agree that the place the Joneses are isn’t somewhere that you want to see yourself and your own family
Personal Budget – How to Avoid Living Like the Joneses
I understand the financial jealousy that can come when you’re trying to avoid living like the Joneses. You see their Facebook feed filled with amazing photos, their Instagram feed filled with the same and you hear their fun stories. It can be hard to watch when you’re doing what you can to save money. It can be even harder to stop yourself from spending money or to make things instead of buying them or to keep earning money to stash away in your savings account. Giving into that financial jealousy can ruin your own hopes and dreams which means that putting the personal budget (Six Dollar Family) tips below into practice and avoiding the same trap that the Jones family fell into has never been more important.
Have an emergency fund
The Joneses are rarely prepared for an emergency. Instead, they go through life afraid of what will happen if they have a financial need or ready to swipe a credit card to cover that need. By having 3-6 months’ worth of expenses in a savings account ready for emergency use, you give yourself the freedom to manage your home and your personal budget without the fear that your neighbors have. If you feel as if 3-6 months is too hard for you to save, start small and build a $1,000 emergency fund instead. $1,000 is usually enough to cover most emergencies and won’t take as long as you think to build.
A very simple way to build your $1,000 emergency fund is to sign up for Stash. Stash is a micro-investment app that has an autosave feature. Every few days, it will analyze your savings account and withdraw a little bit at a time. it never overdrafts you though so that isn’t anything you would have to worry about. Invest the money that Stash saves and your emergency fund (and more!) will grow fat quicker than you ever imagined! To get you started, Stash will give you $5.00 free when you use THIS link.
Side note: Ready to really kick your savings into high gear? Check out my book, Six Dollar Family. It’s packed with awesome ways to save money and more! Available on Kindle or in paperback.
Be Wise about Debt
The next step to not living like the Joneses is to be wise about debt. Notice I’m not telling you to avoid debt? There is a reason for that. In this day and age, you need a credit score in good standing to rent everything from a car to an apartment and some jobs even run your credit score before they will hire you. Instead of avoiding debt, you need to be wise about it. Make your debt work for you and don’t borrow more than you can responsibly pay back each month. In addition to being wise about debt, you should also use a free credit monitoring service such as what you get when you sign up for a Credit Sesame account HERE.
Get out of debt
If you currently have debt that wasn’t taken wisely, do everything you can to get it paid off then avoid taking anymore without being wise about it. When you make the choice to not avoid debt, you free yourself up to pay off what you already have. Dave Ramsey’s Snowball method is a fantastic way to pay your debt down without putting your regular budget into a tailspin. If your personal budget is currently too tight to add any extra debt payments, these home based business ideas or these “strange” ways to earn extra cash can help give you enough wiggle room in your budget to pay down your debt quickly.
Know want vs. need
The root of the Joneses’ problem lies in the fact that they can’t tell a want from a need. Knowing what your wants vs your needs are is the only sure-fire way to keep your spending from getting out of control. It is perfectly fine to have wants and to purchase them. However, they should be saved for instead of splurged on and only purchased after all your needs are fully taken care of. Another thing to consider when you’re looking at want vs. need is that your kids are watching you. If you don’t learn it, your kids won’t either.
Avoid splurge purchases
Splurging can kill a budget in a matter of minutes and while the occasional splurge is okay; larger, more expensive ones should be avoided. If you find that you have a want that will take more money than you currently have available to buy it with, make it your new savings goal. Assuming your emergency fund is fully funded, you should be able to save for it within just a few months. If you really want something bad enough, you will be willing to wait to get it.
Avoid the Joneses
I know this one is going to sound a bit mean, but the people that you surround yourself with have a direct impact on how you live your life. If you’re trying to avoid living like the Joneses, you should probably avoid the Joneses as much as possible. When they want to dine out, politely decline and put the money you would have spent into your savings account. When you are invited on an expensive vacation you can’t afford or when they want to go shopping, be polite but be firm in your refusal. It doesn’t mean that you can’t be friends with them; only that you need to keep them from influencing your life and your finances. Doing so will only lead to you living exactly like the Joneses do.