Embracing financial constraints with pride

Money, jealousy, and shame. Each are key players in juicy telenovelas AND the keeping up with the Joneses mentality, also known as The Jones Effect, a social phenomenon where people try to compete with those in their community or people they see in media, often accumulating signals of wealth such as cars, clothing, and jewelry, even when they can’t afford it. Social media has worsened this dynamic, since we’re confronted every time we open our phones with the highlight reels of our peers and celebrities, to compare ourselves to.

I think it’s time to shift our perspective on keeping up with the Joneses. As a financial advisor, I see far too many families going into debt, and making bad decisions at the expense of their future financial well-being. I think it’s time to bring in the age of counterculture, where saying you can’t afford something – or are choosing not to invest your money (and energy) on it – is what’s in.

At its core, The Jones Effect is all about feeling accepted, and as social creatures, what’s more understandable than that? While I have empathy for those who attempt to keep up appearances and want the best for their families, I’m working to usher in a new wave of embracing financial prudence, to help people live their best lives long term. It's not about deprivation or restricting ourselves from enjoying life's little joys. Instead, it's about making intentional choices that align with our long-term goals and values.

It’s embarrassing to say you can’t afford something 

There’s long-standing social stigma associated with admitting financial constraints. You may even associate saying "I can't afford it" with failure or inadequacy. But in reality, acknowledging our financial limitations is a sign of wisdom and self-awareness. It's the first step towards taking control of your own financial destiny

Being financially prudent isn't about denying yourself; it's about prioritization. It's about distinguishing between fleeting indulgences and meaningful investments. By cultivating this mindset, we empower ourselves to make informed decisions that lead to long term financial stability and freedom. Think about it this way: in the long run, would you feel more proud of spending $400 a week on bottle service at a nightclub to impress your friends, or having invested that money in entrepreneurial dreams, a 529 plan for your child, or even paying down debt?

Being financially savvy makes you feel self-reliant, confident, and empowered. Instead of leaning into external validation, you can feel in charge of your own life, and remove the pressure to keep pace with your peers. Plus, your self-worth will no longer be measured by material possessions – rather by your ability to trust your inner voice to guide you, and to pursue your long term goals with confidence. 

I understand that the journey towards “prudence” may seem daunting, especially in a culture that glorifies instant gratification (only one click away) and consumerism. But I urge you to break out of that matrix now, more than ever, and view it as a liberating and empowering path rather than a restrictive one.

My tips for being more financially prudent

The first step is taking accountability for how you’re currently spending. Try to do monthly audits of your finances and look at the categories you’re spending the most in. Is it delivery? Online shopping? Or even apps on your phone? Getting honest with yourself is scary, but necessary. Next, pursue these: 

Figure out your priorities (for now): Take the time to identify your financial goals and values. What matters most to you? Think of long term questions, such as: Do I plan to care for my parents as they age? Do I hope to afford a vacation home? Or retire early? And short term goals, such as saving for a vacation, paying off debt, investing in your emergency fund, and making home improvements. It’s okay if these goals change – life happens! But having an idea of what’s next is always beneficial for keeping your goals top of mind. 

Make a budget: Establish a realistic budget that aligns with your income and fixed / variable expenses. The monthly spending audits I mentioned will help you identify areas where you can cut back and allocate resources towards your goals. Check with your credit card or banking app too – many have built-in tools that can help you see your purchases at a glance, categorizing them as ‘restaurants,’ ‘groceries,’ and so on, which can save you some work. 

Get into the habit of delaying gratification: Learn to differentiate between your needs and wants. Before making a purchase, ask yourself whether it aligns with your long-term goals and whether it's worth delaying gratification for future financial security. A great way to do this is by using the ‘save for later’ button on Amazon purchases before you buy into the one-click, fast shipping options. Remember: delaying gratification is a lifelong skill with tons of benefits, so while it feels like suffering in the short term, you’re actually creating muscle memory that’ll serve you for years to come! 

Seek guidance from a pro: Don't hesitate to reach out to a financial advisor for personalized advice and guidance. They can help you develop a comprehensive financial plan tailored to your unique circumstances and aspirations, and invest in the right vehicles for long-term success based on your goals, such as life insurance, money market accounts, index funds, and more.

You’re never a failure for saving for your future

Choosing to say ‘no’ now in favor of a more stable future isn’t just key – it’s cool! I know it feels hard to deny yourself the little joys of life in the present, but remember that being financially prudent is a testament to your commitment to a fulfilling future. By taking control of your finances and making intentional choices, you're laying the foundation for a life of empowerment, abundance, and true freedom.

And who knows? Your own opting out in favor of saving could just be the next trend. Maybe the Joneses will aim to keep up with you. 

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The image used in this blog is by Matthew Hamilton.