Live Within Your Own Means, Not the Means of Others

It’s very easy to slip into “keeping up with the Joneses” mode. Your friends have a new TV, or maybe they traded in their old car for a new one. Or perhaps you want to get a nice big house like they have, and take advantage of the homebuyer tax credits at the same time.

From personal experience, I can tell you that it’s not worth the stress and hassle of trying live within other people’s means. My husband is a frugal and savvy buyer, so he when he buys something, he thinks long and hard about it. Me? I’m a bit more impulsive, so living within our means has been harder for me. Fortunately, I’m learning to tune out ads as well as the preferences of others, and am thus more able to focus on what I really want and need.

Cell phones, TVs, and other electronics

It’s easy to get excited about the latest cell phones, MP3 players, game consoles, and flat screen TVs. New models come out so fast that you may quickly lose interest in what you already have. As long as it does the job, however, I’m happy with my electronics. Even though we have some nice items, we’ve thought carefully before making these big purchases.

My husband shopped for at least 6 months before he purchased his new cell phone and plan. Why? Because whenever he makes a purchase, he looks for long term value. He’s the type of person that weighs the pros and cons of the monthly plans as well as the specs for the phone. We bought our last set of phones three years ago, and they’ve served us well.

By planning our purchases carefully, getting a good deal, and not relying on debt, we’ve been able to make guilt free purchases.

Keeping up with cars

I have to admit that I’ve been a victim of car envy. After buying two cheaper cars with cash, I wanted to get a better (in my opinion) car. My friends have had some nice cars, and I wanted to fit in. In the end, I wound up borrowing money at 14% to buy a fancier car. The purchase price was already at the limit of my budget, and the high interest rate was a huge burden.

I would’ve been much better off if I had simple taking the few thousand dollars I had in my savings account and bought a more reasonable car with cash. The resulting car payments were a big strain on my finances, and the money we spent on the car could’ve definitely been used more wisely.

With my husband’s help, we took whatever spare money we could find and used it to pay down that car loan. In the end, it took me four years to pay off my KUWTJ problem!

Buying a house

We made numerous spreadsheets to see if buying a house was better than renting. In the end, we decided that it was a good move to buy (the tax credit was a bonus, not a deciding factor), and we focused on picking the right place for us. While we were house hunting, our friends were also looking for places to buy, but we were careful not to let their preferences influence our own.

When we looked at places, we stayed well below the amount our bank was willing to lend us. Instead, we looked at what our budget would comfortably allow. We carefully analyzed every place that we seriously considered, compiling a spreadsheet of the total costs for each. We included things like the mortgage payment, property taxes, homeowners insurance, home association fees, and a buffer for unforeseen expenses.

When our house deal fell through, we were disappointed, but not devastated. Within a week, we had another list of places that interested us because we realized that we’re buying a house and not a home. We’re planning on taking our time and not feel rushed just because many of our friends are taking the plunge.

Be honest with yourself

Instead of emulating the lifestyles of those around you, try being honest with yourself. Is buying more stuff, driving a fancier car, or living in a bigger house really going to improve your life? Or are you just pressuring yourself to adopt a lifestyle that someone else finds desirable, rather than doing what’s best for you?

19 Responses to “Live Within Your Own Means, Not the Means of Others”

  1. Anonymous

    Our NPR affiliate played a speech by Daniel Gilbert this afternoon, he is a psychologist who wrote a book called Stumbling on Happiness.

    One of the things he said was, basically “and then what” – when you ask people to predict how happy an event will make them, they will wildly oversetimate. That’s part of what happens when you buy new things. But if you ask the person first “what will you be doing at X time” and then ask “and if this great thing happens now, how will you feel about it at X time” they will be more grounded and answer much more realistically.

    I’m going to try that on my wants – especially this time of year, I have a lot of them.

  2. Anonymous

    What a fitting commentary, especially this time of year. when EVERYTHING from Cars, Jewelry, TV’s and clothes, are so shiny and new! Please, leave me OUT of the IN crowd! Sure, I fell in love with flat screen TV’s, but it was well worth the 6+ month sacrifice of saving for this major purchase. The Joneses are a JOKE! Something to think about “People are broke on another level” The Joneses have more added stress!

  3. Anonymous

    My husband and I have not tried to keep up…we drive old cars, do home improvements slowly with cash, nothing exciting. We have been ridiculed by family, neighbors, co-workers. Sad statement about how we think in America but we do not want a pile of debt and stress…so we continue.

  4. Anonymous

    Very good advice, but it is apparently very hard for us people to follow it. We are social beings. But I think our perception of what others think about us is really the problem. That may be why we want to keep up with the Jonses who may not really care about how we are keeping up anyway.

  5. Anonymous

    Well, I drive a 1991 Volvo that’s in good shape. I get far more of a boost from a “car guy” complimenting me on it than I ever did on the expensive slick Audi I leased for two years ($10,000 I’ll never get back). Sure, sometimes it needs work, but each major repair is adding a few more years to its already-long life, and it’s not something you see every day, unlike the Audi and the VW before it.

    Oh, and it’s equipped with an iPod and GPS, so I guess I’m still vulnerable to the shiny, but these make the car even more of a joy and it’s kind of fun that these things didn’t exist when the car was new.

    Oh, and if I ever come into a big windfall, it’ll get a complete strip-down restoration and maybe a little V8 engine transplant!

  6. Anonymous

    I’ve never suffered much from car envy, although my 2002 motorcycle is a little rough around the edges after riding with some others. I can keep it running for a couple more years even though I’ve seen bikes in better shape being sold for parts. Being the type of vehicle it is I don’t want to borrow money to buy one again. If I can make it last 2 more summers I can buy a newer used bike outright or a brand new one if things go better than I expect. My 2002 Chevy S10 is by far the best vehicle I’ve ever owned. I’ve had it for 5 years and my goal is to give it to my niece when she turns 16. She is 3 😀

  7. Anonymous

    This is something I struggle with. It’s not so much keeping up with the Joneses, but rather liking shiny new things. Most people don’t really know when I get a new toy (like an iPod or a GPS). While people around me buy new toys (recently there’s been a trend of my friends getting new toys that I want), I have to remember to just enjoy their joy.

  8. Anonymous

    Someone help me, HD Tv’s are not on our list at the moment, regular TV does us fine. Blackberry’s on the other hand that’s a different story, just that $30 extra a month per phone on our bill. My husband got his on Saturday, I am still deciding and have been for 3 weeks, looks like it will be three more?

  9. Anonymous

    For those yearning for an HDTV let me share my thoughts. If you are a sports fan or a big movie buff you will love it. That is assuming you can afford the tv, higher cable bills, extra cost of HD service each month. But if you just casually watch TV – ehhh, you may or may not get your money’s worth out of HD.

    The downside of an HDTV is that if something isn’t shot in HD it looks worse than it does on a standard digital feed on a standard tv. It’s a grainier pic and its got black bars on the side because its obviously not in widescreen mode. Take for instance watching Andy Griffith or I Love Lucy – those are horrible on the HDTV. If I’m in the mood for old TV shows I go upstairs and watch on our 25 in. digital TV.

    Those are my thoughts on HDTV. We do love ours but we saved for it and the anticipated higher monthly costs of the HD feed. But I still keep the 25 inch digital tv in the living room because I’m not satisfied with everything I like to watch on HD – some things are still better in digital.

  10. Anonymous

    You need to remember 4 words “and then what?”.

    So I buy a fancy car.
    And then what?
    I still go to work stuck in traffic.

    I buy a fancy phone.
    And then what?
    I still call the same people.

    I pay more for the data plan.
    And then what?
    Do I really need to check my email or CNN every second?

    I buy a bigger house.
    And then What?
    I have to pay the mortgage, and other expenses.

    This is not to dissuade from buying but one has to think past the initial thrill and see if a more expensive purchase – especially when not called for – is justifiable.

  11. Anonymous

    my biggest envy is supercars and fancy SUVs and i dont think that this will go away anytime soon because i ama a big car fan and i have never owned a car 🙁 but something that i will not t so do is because a slave to debt so that i can buy a new supercharged range rover sport with all the bells and whistles so that i can look good to my peers. i believe that delayed gratification will work to my favor and at a certain point in time all dreams will be fulfilled

  12. Anonymous

    One great way to make sure you don’t have to keep up with others is to associate with people who think like you. If everyone has an interest in not wasting, you won’t look like the cheapskate. You’ll be part of a group that is more concerned with saving for later and valuing money instead of one where money is wasted on temporary gratification.

  13. Anonymous

    I hope it is okay if I post again, pretty much in response to what Craig mentioned.

    Craig, I strongly concur about saving up for what WE, ourselves want, and not to pacify someone else’s wants. Example: Our house we recently purchased $40k UNDER our pre-approved loan amount sits on the outskirts of a wee town in NW PA. Blink and you miss it. As I drive to and from work, I see many homeowners who have gone all out in decorating for Christmas. The artistry and effort put into all this is beautiful, no doubt. But I would hate to think of what their electric bill comes to in January.

    Our home is all electric, and we heat our home using our wood fireplace. It does a wonderful job keeping the den cozy. We keep the upstairs at 66 degrees. Because of my fibromyalgia, I can’t go any lower than that. But I digress…

    For those who want to go all out and decorate using eletric lights, they’re welcome to it. I know for us, we prefer not to at all. We aren’t Bah Humbugs by any stretch of the imagination. I have a live tree (rootball intact) up and decorated in the livingroom window. Tiny lights light up the tree for a few hours a day. It serves its purpose of simplicity and the true meaning of this holiday season. Bigger isn’t always better….

  14. Anonymous

    If you try keeping up with others you will get in trouble. Everyone has different situations and its tough to compete financially. Save up and get for what you want, but for your reasons, not others.

  15. Anonymous

    Probably my biggest ‘yearn’ is for a big screen TV with high def. I can probably get over the cost of the flat screen TV, but I can’t get over the added monthly cost to the cable bill for true High Def service. But everyone seems to be getting it (which really isn’t true — many people are not). We’ll just stick to watching it on the regular channels for now and wait for the cable bill cost to come down when they really want to get our business. A good story on TV doesn’t require high def.

  16. Anonymous

    I have a lot of “envy”, too, especially car envy. A shiny new car, especially a model you don’t see much, always turns my head. Last week I was on vacation in Manhattan and my head about twisted off my neck at all the exotic cars.

    Anyway I combat this case of the “wants” in two ways. One is over the years I’ve trained myself to really look at the cost of the things I buy (big & small). I was very close this fall to getting a new Infiniti – but when it came down to brass tacks I couldn’t justify spending $35k when I didn’t NEED a new car (or a used one). This takes some training and a little time – it can’t happen over night.

    The other way I combat this problem of “wants” is that when I do NEED to buy a car I buy something I want. Last time I bought a car was in 2005 and I bought a nice, used Acura (I was replacing a 16 yr old Nissan). The Acura still is a nice car and I enjoy driving it. It doesn’t turn heads like that new car would, but people compliment me on the nice interior of my old car when they ride in it. But the fact that I bought something I wanted when it was time to purchase means I’m a lot more likely to keep this car for a long, long time.

    So try to train yourself to really see the value of what you buy (I know it takes time) and when you do NEED to buy something make sure you do your research and buy something you want that you’ll keep a long time.

  17. Anonymous

    When the time to buy a house arrives, it isn’t necessary to be so anal – re: numerous spreadsheets. One of the choices my hubby and I made was to NOT live in a subdivision. That freed us from those very costly association fees. We also knew that simply buying far below what we’d been approved for would ease the burden of a very high mortgage payment. The way we decided this was to figure out how much more we could afford beyond what we were paying in rent – this included taxes and other necessary homeowner incidentals.

    It isn’t an issue of investment of money; investment of time has to also be considered.

    For some odd reason, during our house-hunting, every time we looked at houses that were beyond a certain range, yet still under our preapproved amount, I could sense red flags going up everywhere. Warning, Will Robinson! Warning! Just some thoughts…..

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