Not too long ago, I went to visit a friend at his home. As I drove up, I realized that he lives in the “estates” portion of his community. I stepped inside his home and I was immediately aware that his house was nicer and more expensive than mine. After my visit, on the way home, I noticed that he drives a top of the line BMW. My well-worn minivan is never really attractive, and it suffered from the comparison. Since he has a young family and is about my age, I wondered how he is able to have such nice things. That must be what it means to try and “keep up with the Joneses.” Wanting to keep up with the nice things that others own is a normal sentiment, but it’s misguided. Here are some reasons that it will never work.
The first, and most apparent problem with any comparison, is that I can’t know how much my friend paid for his house or his car. With the way the real estate market has gone in Calgary, there is a chance that he paid the same for his home, this year, as I paid for mine last year. He did tell me that he got a “smoking deal” on it, and that prices in his neighbourhood have already moved higher. I can only feel happy for him. And nothing is to say that he has more equity in his home than I have in mine. Even if his home is worth more, let’s suppose his is worth $600,000 and mine is worth $400,000, it is entirely possible that, after our mortgage amounts ($500,000 and $300,000), each of us have $100,000 of equity. It is even possible that he doesn’t own the BMW, Many people lease cars, which gives them low monthly payments and no real ownership.
However, my friend is successful at his work. I think there’s a good chance that he is responsible with his money, and that his circumstances are simply different from mine. Not everyone starts their financial life at the same starting line. I graduated from university with no debt, and went to work for a couple years before having children, saving quite a bit of money. I have another friend whose parents gave him a 25% down payment for his home to help him get started in life. I know someone else who is going to dental school and will probably graduate with $300,000 of student debt. None of us started from the same financial starting line, so it’s not fair to compare our present financial situation.
Another common unfair comparison I see, especially with my siblings, is because of age. First, my sister surprised me one time by responding, to something I said about money, that “we can’t all be rich like you.” Yes, we own a larger house and drive a slightly bigger car. But we also started our financial journey seven years earlier. It makes sense that we would be more advanced in our journey. Soon after that, my parents moved into an estate home, a huge bungalow that is richly finished. But it’s not fair to compare my home to theirs, since they are 25 years ahead of me. I especially see this unfair comparison with my younger brother. Being the last one at home, after my parents were already financially established, he got used to a very nice standard of living. When he moved out, he seemed to try to continue enjoying the same lifestyle. In 30 years, he will have earned it.
I think that our horse represents all of these mistakes. After 10 years of marriage, my wife and I finally feel we’re able to have a horse. Between you and me, it’s a half-lease, so we pay less than we would for regular boarding and care, not to mention the up-front cost. Friends who hear about our horse probably don’t realize that we can’t afford to own it outright. And they probably don’t understand that we’ve waited this long before taking on this monthly cost. And they would make another mistake if they looked around and said: One of my friends has a big house on the lake, one has a classy BMW and one has a horse. Why don’t I have a lake home, a BMW and a horse? Since each family has chosen just one of these luxuries, it’s unrealistic for one family (in our middle class circle of friends) to expect to own all of these luxuries.
Why do we make these comparisons? Our possessions seem to represent our success and our happiness in life. Because our society prizes competition, we want to know how our success compares to those around us. Not only do possessions poorly represent our success, happiness is not a competition. When we realize that we have no way of comparing our financial success to that of others, we can stop trying to keep up with the Joneses. I can be happy with the few luxuries I allow myself, and allow my friends to be happy with their luxuries. Better yet, we can enjoy them together.
In what areas do you compare your possessions to others? What luxuries do you own, that people around you could be jealous of?