“Conspicuous Consumption” and how keeping up with the Jones’s can get you into trouble…
The phrase “Conspicuous Consumption” was coined by American writer Thorstein Veblen in his 1899 book “The theory of the leisure class.” The term refers to consumers who buy expensive items to display wealth and income rather than to cover the real needs of the consumer. The relevance of a book from 1899 in today’s world of buy-now pay-later is ever so appropriate to share. Let’s have a think about modern day consumption and “keeping up with the Jones’s.”
Everyone I’m sure has been guilty of overspending at some point. It doesn’t matter if you are on a high income or a median income sometimes it’s very tempting to overspend on a new iphone or big flat screen tv. But for many people it can become an obsession and this “keeping up with the Jones’s” mentality can lead to financial ruin.
Imagine a couple that always have the best things in life. They have a fabulous multi story house on the beach front, a Mercedes and land rover in the drive way, a 85 inch flat screen tv or better yet a projector in their home theatre! They both always wear designer clothes and handbags and can be seen with coffee in hand in designer active wear on the way to yoga.
While not trying to stereotype, this could be the perfect case of “Keeping up with the Jones’s!” A life on credit… or as mum used to call it “the never-never.” (as in never-never going to pay it off!).
From the outside, life looks grand. Our stereo-typical couple look like they are extremely fortunate, living a life of ease with high incomes and everything they want. But what if everything is credit? All owned by the bank or lender, or heaven forbid, AfterPay or ZipPay. It might be that our very successful couple are living a life of luxury; all owed to the bank.
Any obsession with overconsumption can have an impact on your financial position. What would happen if one of you lost your job? How would you make repayments on your mortgage, your car loans or your credit cards? Is insurance really the answer? To us, Insurance is like a lottery that you really don’t want to win…
So how do we avoid “Conspicuous Consumption?” Well, the best way to prevent over spending is to create and live life from a budget that makes sense to your own situation and circumstance. Once you know how much to put away for your bills, your mortgage, your savings/long-term goals and your weekly spend you can determine the remaining funds available that you can spend on whatever you like.
Essentially, do not purchase items that you do not need with money you do not have. It’s a fast track to debt.
Top 3 steps to get out of conspicuous consumption
- Learn to live within your means. Generate a budget and know your position. This way you can spend your “allocation” fully without having to look over your shoulders at your creditors chasing you!
- Set yourself a savings goal for the “big ticket” purchases and your long-term goals and ambitions. It might seem a great idea to travel now and put it all on credit, but when it comes time to purchase a home in future you may have a large pile of debt to pay down before you can achieve a long-term goal. Always plan ahead.
- Don’t compare yourself to everyone else! In reality no one is watching! Live a life below your means; work less, spend more time with your family and doing the things that are most important to you.
I can’t lie. I must admit I do love a beautiful designer handbag. But this “Conspicuous Consumption” has me re-evaluating what really attracts me to them in the first place. It might be that I am like a magpie (according to Andrew) and I’m attracted to “shiny things;” Afterall, it’s just a handbag and who are we really trying to impress anyway?
Do you want help managing your spending or knowing what you can spend guilt free on a weekly basis? At Adelaide Budgeting we provide you with education and tools that give confidence and clarity around your cashflow. If you are serious about spending and saving and don’t have a plan in place then we need to speak with you! Why not give us a call today?