In a recent article on how renters can avoid fear of financial failure we referred to the pressure people feel to stray into unhealthy spending patterns out of the type of peer pressure known as ‘keeping up with the Joneses’.
“You can avoid the mindset traps by not thinking that you have to ‘keep up with the Joneses’ and realise that often the picture people show is not the real or true picture,” said Hamish Ferguson, a director of Vision Property and Finance.
First, a quick refresher on what the saying means.
Keeping up with the Joneses is a common saying referring to the comparison to one’s neighbours as a benchmark for the accumulation of material goods or status.
To fail to “keep up with the Joneses” is perceived as demonstrating financial and/or cultural inferiority.
It comes from an American cartoon strip of the same name which started over a century ago.
Most of us like to think we are independently-minded enough to avoid falling into traps like this.
But as with the belief that most of us see ourselves as “above average” drivers, we tend to overstate our abilities.
As a result, we can easily avoid helpful behaviours like budgeting and slip into mindless spending and financial stress.
New research by Finder shows it’s that’s not the case that most of us avoid the ‘keeping up with the Joneses’ trap.
A national survey of 1,000 people found 47% of Aussies have felt pressured to spend money by their social circle.
The research found 1 in 5 (22 per cent) accumulated debt or spent more than they could afford because of the pressure to spend – equivalent to 4.3 million Australians.
Aussies feel peer pressured into anything from splitting bills to buying property.
More than a quarter of Aussies (28 per cent) have felt forced into splitting a restaurant bill evenly, when they had ordered less food than others.
The gender split on this ‘keeping up with the Joneses’ behaviour may not automatically confirm stereotypes.
The research showed men ($1,560) have overspent substantially more than women ($912) to keep up with friends and family.
Finder’s Katie Browne attributes some of how we handle peer pressure around money to the fact that it remains a taboo subject.
“Unfortunately money can cause rifts between friends and families at times,” she said.
“Everyone has different incomes, money values, and financial priorities and finding the spending sweet spot with friends can be a tricky situation to navigate.”
The research showed 1 in 7 (14 per cent) people have been coerced into going on an expensive holiday with loved ones.
A further 9 per cent have felt they had to fund a bucks or hens night, while 7 per cent have felt pressured into paying for someone else’s baby shower.
Some Australians even admit to buying expensive items like a nice car (8 per cent), a home (8 per cent) or designer items (8 per cent) to keep up with their friends and family.
Browne said feeling guilted into spending more just to keep up with friends is an easy way to blow your budget.
“While no-one wants to be a party pooper, consider suggesting a more affordable alternative when you are invited to a fancy dinner or on a pricey holiday. You can always be honest with your loved ones and say while you value spending time with them, you don’t want to spend too much money doing it.
“Money management apps – like the Finder app – can help you see your income and expenses all in one place and figure out how much you can afford to spend.
“At the end of the day, it’s your money and you get to decide how you spend it. If your friends are good friends they’ll want to see and spend time with you – and the location really shouldn’t matter.”
Millennials are the most vulnerable to financial peer pressure, with 69% having spent money because of social influence, and 36% admitting they’ve gone beyond their financial limits to do so.
Kate Browne, personal finance expert Finder, said money is still a taboo topic for many.
“Unfortunately money can cause rifts between friends and families at times.
“Everyone has different incomes, money values, and financial priorities and finding the spending sweet spot with friends can be a tricky situation to navigate.”
The research shows 1 in 7 (14%) people have been coerced into going on an expensive holiday with loved ones.
A further 9% have felt they had to fund a bucks or hens night, while 7% have felt pressured into paying for someone else’s baby shower.
Some Australians even admit to buying expensive items like a nice car (8%), a home (8%) or designer items (8%) to keep up with their friends and family.
Browne said feeling guilted into spending more just to keep up with friends is an easy way to blow your budget.
“While no-one wants to be a party pooper, consider suggesting a more affordable alternative when you are invited to a fancy dinner or on a pricey holiday. You can always be honest with your loved ones and say while you value spending time with them, you don’t want to spend too much money doing it.
“Money management apps – like the Finder app – can help you see your income and expenses all in one place and figure out how much you can afford to spend.
“At the end of the day, it’s your money and you get to decide how you spend it. If your friends are good friends they’ll want to see and spend time with you – and the location really shouldn’t matter.”
Millennials are the most vulnerable to financial peer pressure, with 69% having spent money because of social influence, and 36% admitting they’ve gone beyond their financial limits to do so.
Have you ever felt pressured to do any of the following with friends/family?
Split a bill evenly at a restaurant when you ordered less
Great you have completed the FSI as this helps to identify just how much financial stress you are experiencing. Your pattern of responses indicates that you are with your financial concerns.
To have your results emailed to you please enter your email addres
Show my FSI Result
Manage your financial stress now,
download the app
Our app is due to be launched in the coming months.
Please enter your email address to be notified in advance of the launch date.
