The guy you described sounds like he was meeting with you for more of an ego stroke than anything.

I guess I’m different than most in that I’ve never had a problem distinguishing assets from liabilities and equating the two. The Joneses may consider their big screen plasma to be an asset, while I just look at that and shrug knowing that my asset is my roth contribution and the cumulative future benefits that will result.

Whether it’s materialism and living in the ‘now’ by taking frequent vacations or those who instead ’spend’ money on long term investment vehicles, everybody blows their dough on something. The sad ones are those who never realize the true cost they pay.

Andamom, you will be doing your daughter *no* favors if you don’t (a) teach her that complaining about what you provide for her (assuming, of course, that you are providing her the necessities of life) is something you will not listen to and (b) make it clear to her what values you have that are more important to you than the constant spending that NYC promotes. Acting like you have something to be ashamed of or excuse when you make wise financial decisions for your family will only cater to some of the worst aspects of adolescence and encourage your daughter to grow up into another empty-headed materialist.

I live in a very high-cost-of-living area, too. I don’t think “improving yourself” and “making more money” are necessarily the same thing at all. While in some areas I have little choice but to “keep up” (i.e., rent) and there are some floors on certain categories of spending imposed by my line of work (I have to maintain a wardrobe of suits), I do not have to go on more expensive vacations, eat in (relatively) more expensive restaurants, or otherwise mimic my peers’ less-desirable spending habits in categories that don’t support my goals. It’s hard sometimes; I live in a paradise of consumerism. But I always try to keep my eye on what *I* really want, rather than waste my energy in envy or cravings cultivated by the media.

When we sat down to go over his numbers I immediately saw his “problem”. At age 25 and making around $50k/year he had $10k in a cash emergency fund, was fully maxing out his 401k and Roth and was saving for a house. THAT is why he couldn’t go party like his friends and lived in a cheap place. His only extravagance was a new car which he had at 0% interest and had put 50% down on. He had 0 debt.

We talked a lot about spending and debt in that session and I showed him exactly why his friends could afford to live like that and did some financial projections on just how much debt they probably had to afford that lifestyle on the same income. I then projected how much he would probably have at retirement due to his good saving habits. After that he didn’t mind so much about not partying every night – and he sent some of his friends to me for help.

It’s hard to to feel a little jealous when you see people who have something you want. That’s just human. But having the sense to look at it realistically often shows that while you may want that house, you may not want that financial lifestyle.

Thanks again for a great post!
pf101

There’s no point in denigrating people who want to “keep up with the Joneses.” But we’re all human here, and if the Joneses like it, there’s a good chance you might too.

As for your list, health costs money, in many cases. It is much easier to be wise, serene, and loving when one has a sense of financial security (which, OK, is different from having money!). Money isn’t the only thing in life, but having enough of it certainly helps.

FWIW, I do believe in constant improvement of self — and work towards that end on a regular basis. Yet, we still find ourselves constantly striving for more on a steep incline. — And our teenage daughter makes it known that there are differences between our standard of living and that of her friends.

For example, many of her friends parents own brownstones (check out http://www.corcoran.com for an idea of cost) — and we are still not able to buy into the market…

So — just to stay in this area we do need to compete or at least strive to be the best we can possibly be — or we will never be able to achieve our goals let alone be as financially stable as some of the Joneses.

(*Note: I really cannot go into the personal details here of our situation — but I did want to respond.)

Isn’t this still keeping up with the Joneses?

Ideally, we’d be targeting non materialistic stuff like health, wisdom, serenity, a loving family, etc.

For me it was never “keeping up with the jonses” but my own spend-happy habits that kept me from saving. Bookstores, coffee houses, malls, or anyplace we could spend money was where we hung out. Comfort spending was a big problem for me; I needed to find new ways to pass the time that did not include spending money.

I since met a very lovely and fugal woman who became my wife and has guided me into a very comfortable single income lifestyle where we have more than we could ever need.

As she is going back to work soon, we are making a wish list of long overdue items around the house that we will pick up as our cash reserves pick up. We will not drastically change our behavior and plan on banking more that 50% of her take home pay.

I call this our “single income” discipline. It’s also great because on top of everything we could ever need it provides us with unprecedented flexibility in jobs and a notable lack of stress about bill paying.

Also I happen to know that virtually all my friends have twice the income I have; most have at least three times my income. So of course they look richer!

If anything, I tend to err in the other direction. I have to get advice from those who are less ignorant on what is appropriate to wear to work if I want to look semi-professional. I tend not to notice which things are clearly straight out of the 1980s, for example.

Before that, my motivation to get out of debt was a spreadsheet I kept that showed me how much I was paying in interest each month. I would look at the value and tell myself I could have had a plane ticket to London, a new stereo, or a nice leather jacket each month, etc.

Warren Buffet’s primary residence is house purchased under $31K. He has other property but, the point is he could afford much better but, it doesn’t bother him to do with less.

Kinda the whole point of what you’re trying to get across.

/johan/

I think this one’s especially noteworthy. Whenever pangs of jealousy and desire arise, it’s usually enough to go back to the basics to get back into the right frame of mind. Yet another reason it’s so crucial to have a strong grasp of goals and priorities.

Thanks for the good post Trent.