Money and Status: Do You Want More Than the Joneses?
January 26, 2009 by Miranda Marquit
Filed under Finance
We’ve all heard the expression, “Keeping up with the Joneses.” Unfortunately, part of the reason that we are in this mess is that too many of us like to look as though we are “keeping up” with our neighbors in terms of material things. In our society, money equals status. And as for the rich — money is the ultimate sign of status. If you have everything else, the only thing that separates you is reaching that next 0 in your net worth.
And, interestingly, most of us would prefer to have the status money can buy. I came across this on Slate.com:
A more convincing answer is that we work hard because income is linked to our desire for status, which is collectively insatiable, because status is largely relative. A famous survey by economists Sara Solnick and David Hemenway found that many Harvard students (although few Harvard staff members) would rather have an income of $50,000 in a world where most people were poorer than an income of $100,000 in a world where most people were richer.
Of course, this survey is 10 years old, and it was merely confined to Harvard, and is not a true random or representative sample. But it is telling. And I do think it is somewhat applicable in our society. Aren’t we always comparing who has the bigger TV or the nicer car or the cooler laptop?
My husband, said, “Of course I’d rather have the $100,000! Who cares whether someone makes more, as long as I am comfortable with what I have?” But he also has no ambitions beyond getting a job that he likes and being able to buy what he wants when he wants it. And he wants to be able to spend the evenings and weekends doing relaxing and fun things (and sometimes doing nothing at all). I’m fairly similar. And we don’t have particularly expensive taste. So we’re already more than halfway there.
But the survey caused me to stop and ponder money as status. Do we look at what others have and judge ourselves according to whether or not we have it? Or conversely, how many of us committed to frugal living look at others and judge ourselves according to what we don’t have? Do we feel smug because we spend less money and have fewer things? It’s a sort of two-edged sword, money and status.
Do you think money and status are related? How do you feel about money?
I would have to agree that many people link material possessions with status, Miranda. I think a good deal of that attitude comes from the media who are constantly shoving celebrity and athlete lifestyles down our throats. I mean, how many “entertainment” news shows are on television, how many shows take you into the “cribs” of the rich and famous or showcase their car collections? I personally know many people who fall into that mindset, and one of the worst examples is the lady that lives across the street form my parents: there is a Mercedes, a Bentley, and a Range Rover in the Driveway/garage, yet when you see her or any of her visitors/family they all carry themselves and present themselves with little class. I’ve always said that money cannot buy class, and I never have cared what the next person. This is actually one of the most common points in my blog, and in one post I distinctly remember writing something to the effect of the nation being in a better situation once people start concentrating on their own lives and not worrying about what others have and trying to keep up or outdo them.
Of course money and status are related. I’m trying hard not to compete with others because I believe it’s very damaging, emotionally and financially, but it’s not easy.
To quote Outkast rapper Big Boi:
I heard it’s where came from but where you pay rent,
Then I heard it’s not what you make but how much you speant.
Good post, I like the old study. It should be done on a grander scale now.
Thanks for sharing!
@Eric: It’s so true that good manners can’t be bought. I agree that you’ll do better if you just focus on improving your situation — in whatever way you think it needs improving.
@Vered: I agree that it can be hard not to compete with others. But, as you say, it can be damaging. Most of us will never make “the top” financially, and continually beating ourselves up about it — and getting into debt to try and look like we’ve “made it” — only hurt us.
@Weakonomist: The wisdom of Big Boi ;) He’s right, though, often we just look at what money has been spent on to determine someone’s status. I would like to see the survey done on a larger, more scientific scale as well.
It is sad that we have been duped into thinking that status matters so much. Many people don’t realize that the truly wealthy are the “Millionaires Next Door” – people who through discipline and financial education have amassed fortunes and live very fulfilling lives.
In years past, I used to care what people thought. I found that money and status changed who I was – which is just so shallow. Don’t get me wrong, I enjoy having nice things, but I also am balanced to know that wasting money on a $250k car just to make others think highly of you is shallow and probably in indication of someone with low self esteem, or someone who is truly missing something in life.
It has been said that many wealthy people are unhappy and it is true. Some of my loneliest times in life was when I was spending ridiculous amounts of money to try and fill a void that only God could fill. It’s results of an empty human spirit and trying to find what money can’t buy – peace and true happiness.
I am happy to say that I now have inner peace (a knowledge of God) and an understanding of how to create true, lasting wealth.
Once you realize the Jonses are maxed out in credit cards, two paychecks away from bankruptcy, about to lose their home, renting the stuff they claim to own, and VERY unhappy people (often with unhappy marriages as a result), you won’t want to keep up with them at all. In fact, you will find that they envy you for your simplicity and enough self esteem to not care what others think about you.
You make a good point, Anthony! It is true that many of us are merely keeping up with the debt our neighbors have amassed. Concentrate on your own financial freedom, and you will be able to achieve it.
I definitely have times when the yardstick comes out. I try to keep my attention focused on how much freedom I have, not how much stuff, but I still love nice things. The line between what I truly like and what’s “in” can be quite blurry at times.
I think geography may play a role in this, too. It’s much easier to forget about the Joneses in Idaho, where status symbols aren’t so ubiquitous.
Hi Sara! I like the idea of focusing on your own financial freedom. I think its okay to want (and buy) nice things, but it is a good idea to examine why you want these things. Do you like them? Or are you trying to impress someone?
Interesting point about Idaho. Although, I grew up in Idaho, and there are still plenty of Joneses — and people who are trying to keep up with them ;)
It seems that everyone is after wealth, but what is wealth really, what are we really after? People with wealth see no real value in the cash they have and their values turn to health and family.
So does true wealth really sit with how much cash is in the bank or are we really after something different? We all connect wealth with happiness, but we see so many rich unhappy people in the media every day so that cannot be true.
I believe true wealth comes from happiness and understanding what is really important in our lives. By truly understanding what we value in our lives is what has the ability to make us rich beyond of wildest dreams.
The quest for more is understandable, but knowing that you already have all you need will create the peace we are really all after.
I think that you are right that wealth is relative. You can really only compare yourself to yourself. Which is part of the problem that many people have — they are constantly comparing themselves to others, without deciding what works for them…
What I was trying to say was people see cash as a bench mark for success. True success is in everyting we value which brings us that happiness. The connection of happiness and money is a myth as the happiness brought by cash is short lived.
The need to keep up with the Joneses is driven by a lack of understanding of ones true self. Anyone who does not understand their true values for life will be lost.
So they go insearch for cash because in their minds this is the answer. It is these people who will stay lost because they are looking for their happiness in the wrong places.
Money is necessary but can’t be put in the first place or before your health, happyness and life itself. In the moment that you know what you want from your life everything starts getting shape.