FPSC’s 2018 Money and Mental Health survey revealed that millennials aged 18 to 34 and parents with young children were most likely to feel pressure to “keep up” with the way their peers were spending money. And more than one fifth of all Canadians admitted to feeling financial peer pressure.
The phrase “Keeping Up With the Joneses” comes from a long-running comic strip of the same name created in 1913 and published until 1940 by The New York World newspaper. The comic details the exploits of the social climbing McGinis family, who try to emulate a wealthier family. Over time, the name of the comic has become synonymous with financial peer pressure. But the impacts of “keeping up with the Joneses” in financial status are far from comical.
We spoke with Cynthia Kett, Certified Financial Planner® professional and Principal of Stewart and Kett, about how she helps her clients avoid the pitfalls of trying to “keep up” and change their negative mindsets about finances.
Don’t Buy Things You Don’t Need
“One of my favourite quotes about consumerism is from the actor Will Smith,” says Cynthia. “Too many people buy things they don’t need to impress people they don’t like.” To Cynthia, two questions prompted by that quote get to the heart of helping people break the cycle of peer-motivated consumerism:
Who are you doing it for?
And why are you basing your self-worth on what other people think?
Cynthia also points out the global cost of consumerism. “People should charge out and lead a movement in the other direction to consume less. Consumerism in general has a huge cost for the planet.” She emphasizes that in her opinion, experiences and life goals are important, not having more possessions.
Cynthia advises her clients to map out their short-, medium- and long-term goals, and to buy the things that matter to them rather than impulse spending. Setting goals helps to keep her client’s hands out of their wallets for things they don’t need, if they know that buying those things comes at the cost of the goals they’ve set for themselves. “You have to choose the things that matter and forget about everything else,” she says.
People Are Susceptible to Financial Peer Pressure in all Age Groups
Canadians with children under the age of 18 are 38% more likely to feel financial peer pressure, according to the Money and Mental Health survey. Cynthia says this is easy to understand. “There are pressures on children to have things and do certain activities so that they don’t feel excluded.” Cynthia says that parents should manage their own expectations and do the math. “Can they really afford private school, and if not, is it really necessary? Going to specific schools isn’t a surefire predictor of success later in life.” She says that this thinking should also be applied to activities, camps, clothing and all the other things parents feel pressure to provide: can they afford it…and even if they can, are they really necessary?
While the Money and Mental Health survey reveals that younger Canadians and those with families tend to feel more financial pressure, Cynthia says that this has been a problem for clients of all ages—particularly empty nesters who have just finished paying for school for their older children. “Older people hit their stride in their careers and are making the most money they have ever made in their lifetime,” says Cynthia. “They can get carried away with that new disposable income and become big teenagers with money. There’s an opportunity there to amplify financial goals instead.”
A CFP Professional Can Help You Lead, not Follow
The big downside of being pressured into spending too much money is that you can end up falling well short of your goals, or worse, in serious debt. Another saying Cynthia likes comes from cartoonist Bob Thaves: “Money talks, but credit has an echo.” Cynthia says that those who find themselves in hot water should “run, not walk, to someone who can give the appropriate advice. Clearly, it can’t continue.”
A CFP professional can help anyone, not only people planning for retirement or those who want advice about their investments. A professional financial planner will help you map out your goals and meet them, and lessen the stress that finances—and the pressure associated with them—can have on your life. Find one in your area on our Find Your Planner tool.
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