Is it holding you back?
These days, the phenomenon of keeping up with the Joneses is more pervasive than ever. The constant bombardment of images from advertisers, as well as our friends and family via social media is making Australians feel pressured to maintain a certain lifestyle, often to the detriment of their long-term financial goals. In fact, new research reveals that over a third of Australians feel burdened by the pressure to keep up appearances.i
Nothing new
Wanting what your neighbour has is not a new phenomenon. The New York World was publishing a comic strip titled Keeping Up with the Joneses way back in 1913. But the expansion of mass consumerism through the twentieth century only exacerbated the problem as certain material objects were branded as status symbols. These days the issue presents a little differently, with experiences rather than things tending to be our main objects of desire. We all know how envious we can get of that certain friend, who always seems to be traveling to exotic locations and dining out at the hottest new places.
The consequences
Australians are paying a hefty cost to keep up appearances. Many Australians are favouring the perception of prosperity in the present over long-term wealth accumulation. A recent report indicates we are passing up on private health insurance and delaying dental visits just to maintain our lifestyle.i 38% are even choosing to forgo home ownership meaning many Aussies are without a major asset.ii
So how do we get back on track?
A lot of it comes down to knowing where you’re going. Ask yourself where you want to be in a year, and what you want your life to look like in ten. This will help you get specific about your goals. Detail is key. It’s a lot easier to say no to that new gadget all your mates have when you know exactly where you’re heading.
Once you’ve decided on your goals, it’s time to review your budget. Start by comparing your monthly income with your average monthly expenses. Look at each item line and ask yourself, do I really need this? This will help you evaluate what you are willing to forgo to achieve your vision for the future. Don’t be too harsh on yourself though, we all need a few treats to get through the daily grind. It’s also handy to remember that your circumstances are likely to change as time goes on, so make sure you schedule in periodic reviews.
The importance of a coach
Now it’s all well and good for us to tell you to clarify your goals and develop a budget, but we know the reality of good financial health is a little more complex. Just like you might hire a PT to get you in shape, it’s helpful to have a coach who can help you make the right financial decisions based on your circumstances. As a financial adviser, our job is simple: to keep you on track, assess your goals and balance your present needs with your future vision. And with tax time around the corner, there’s never been a better time for review.
It’s only human to compare yourself to others. But if you practice gratitude for what you already have and maintain a clear idea of where you’re going, saying no to those little unnecessary expenses can be that bit easier.