Unintended Consequences of a Move
This article is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success — or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes.
Many of us dream of owning our own home. When we finally save up enough for a down payment and buy our first house, the emotions can be overwhelming. If I close my eyes, I can still see myself pushing the key into the lock on the front door of my house for the first time. I went right over to my new home after signing the paperwork. I walked through the empty house, overjoyed and with my mind racing with all of the things I was going to do to make it my own. I can even still smell my house. That was five years ago. I am now in a bigger house, planning on starting a family soon.
It’s typical in our society to buy a “starter home” and then upgrade once the kids come along to accommodate the increase in family size or simply wanting to be in a great school district so our kids get the best education. In my neck of the woods, this usually means upgrading to a McMansion within a development. While the idea of moving for better schools or more room is good on paper, there are a handful of unintended consequences that get overlooked in a house move. In fact, these pressures, as I like to call them, can destroy you financially.
The Honda in a BMW Neighborhood
The first pressure that can result in moving is our own mind. Let’s say you drive a Honda, which is a great car to own, but everyone in your new neighborhood drives BMW’s. You might notice it at first, but you might start putting pressure on yourself to fit in. You’ll hear the others talk about the deal they received on their new car or how fast it is. You look over at your five-year-old Accord and think that maybe it’s time for an upgrade as well.
Suddenly, you are on the hook for $400 monthly payments for 60 months along with increased insurance premiums and repair and maintenance costs. Had you stayed in your previous house or moved to a different neighborhood, you might not have taken on this added debt.
The Pressure to Fit In Expands
Taking the analogy above one step further, the pressure to fit in expands beyond your own mind. This can come from both yourself as well as from your neighbors. When it comes from you or your spouse, you will hear Mr. Johnson talking about the incredible vacations his family is taking all of the time. Wanting to add to the conversation or fit in, you might start traveling more as well, regardless if you can afford it, just so you don’t feel like an outcast.
Or, your spouse might see that Mrs. Smith has such amazing clothes. They are all designer brands, but they look so comfortable to wear. So, your spouse begins to buy designer clothes as well, regardless if you can afford them or not.
Then there is the pressure from neighbors. While some might not be as forward with it, some will tell you that so-and-so is talking behind your back because you drive a Honda and they wonder why you are living in this neighborhood, assuming you can’t afford to be there.
Other times it will be more subtle and neighbors won’t invite you over to want to spend time with you. They will exclude you from gatherings simply because you aren’t one of them. No one likes being the outcast, so you might give in to the pressure just so you are liked and fit in.
Impact of Pressure on Kids
Of course, we can’t forget about the kids. Many times children have a smaller filter than adults. Johnny might come home one day proclaiming that Bobby down the street said you’re poor because you don’t have a Lexus. You will have to answer the question of whether or not you are indeed poor.
If that conversation doesn’t happen, then your kids will probably pressure you into buying them things to fit in. If all of the other neighbor kids have designer clothes or the latest smartphone, they will pester you for the same. Getting tired of their requests, you might give in.
Lastly, your kids could be teased or excluded from get-togethers as well. Kids can be brutal with name-calling and harassing, so the pressure on you to make sure your kids fit in can be costly.
I have personally seen this. I have a friend that moved to an upper-middle-class neighbor but lives very frugally. She bought her kids shoes at TJ Maxx. One day, her daughter came home in tears because one of her classmates made a comment that her shoes look like they came from Payless.
The Toll of Pressure
If you aren’t careful, all of this pressure can easily lead into living beyond your means. Sadly, it happens more often than you think. The next time you are with your neighbors who you think have it all, realize that most likely, they don’t. They are just like everyone else in the neighborhood trying to fit. It’s a case of the blind leading the blind. Everyone thinks everyone else has it all, and if they mimic those that “have it all,” then they will too.
In many cases, they are living beyond their means as well, adding debt every month. What seemed like a great idea moving to your dream house or a great school district for your kids, turns into a financial nightmare.
Combating The Pressure
So what can you do to offset the pressures outlined above? First off, be comfortable with who you are and be happy. If you know who you are and what your values are, you will have a better chance at not caving in to the pressure.
Next, live your life. Don’t try to live life through someone else’s eyes or try to please them. The only people you are accountable to are yourself and your family. It doesn’t matter what the Smiths think of you. It doesn’t matter if they choose not to be your friends either. In fact, if they are that shallow, count your blessings that you aren’t friends with them.
Lastly, educate your kids that things don’t equal happiness. For me, I am happy just being with my friends, eating dinner and playing board games. It may sound cheesy, but those experiences are priceless to me.
In the end, you have to be honest with yourself and what you want out of life. If you are always trying to please others or trying to fit in, you will be forever miserable. You’ll get a temporary high from buying something new, but that that high will fade quicker and quicker, forcing you to buy more and more. Create a long term financial plan for your family and stick to it.
Readers, what other consequences are there from a house move? Do you have any suggestions for combating the pressure?
This Reader Story is from GRS reader Jon, who writes for MoneySmartGuides, a personal finance blog that helps educate people on personal finance so that they can reach their financial dreams. He focuses mainly on investing and paying off debt since those are the two of the most challenging personal finance topics we face.
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There are 56 comments to "Unintended Consequences of a Move".
I don’t let others people’s purchases pressure me into how I handle my money or what I purchase. Maybe those people are swimming in debt and are struggling to own the things they have. Unless I understand their personal financial situations it would be difficult to compare mine to theirs.
I think you always need to live with YOUR means, not someone else.
I agree 100%. They call it personal finance because you have to be concerned with your own finances. Unfortunately, too many people allow others to influence their spending decisions.
As my speech teacher used to say, never spend money you don’t have, on something you don’t want to impress someone you don’t even like. Words to live by.
It’s funny but I never even feel anything about what other people have or compare myself to them. I may NOTICE what kind of car they drive, but it does not make me feel any different about what I do drive (which is usually a honda and typically driven till it can’t be kept any longer for repair or other reasons). For example, the last one I had I owned for 19 years and I bought it new and kept it till I couldn’t any longer. It was well maintained, clean and ran great. Who cares what other people think? I have a lot of money saved, no house payment or any other debt. At the same time, I do spend money (generously) on things that are important to me, like experiences. I also donate to charities generously. I apply all expenditures to the concept of “utility value” and use a scale of 1 to 10 to determine what it’s worth to me. This was an interesting read.
I like the idea of utility value. Very interesting. I got myself into credit card debt right after college and luckily realized that buying things doesn’t make me happy. Like you, experiences make me happy and I value them and the people that make those experiences so great.
I was looking forward to this article based on the title, since we are considering moving for better schools and a little more space. I would have liked to see a little more ‘nuts and bolts’ breakdown of unrealized costs besides keeping up with the Jonses generalities.
Rob, as far as nuts and bolts…make sure you do your due diligence with respect to income taxes, property taxes, utilities, and the difference in insurance. When we moved 10 years ago we deliberately moved into a county where the insurance costs were lower and into a township because there were no income taxes. Our property taxes were a smidgen higher than the community next door but were off set by the huge savings in income taxes and insurance. The water and sewer were also billed differently and ended up saving money. In the end we ended up in a larger home, a better school system, and still saved $300 in costs each month!
Hi Rob,
I understand where you are coming from. I felt that other costs associated with moving – taxes, insurance, utilities, etc, are all accounted for (hopefully) by someone before deciding to move. I wanted to talk about some things that people might not think of, like moving into a higher income area and having your kids feel pressure to “fit in” with the other rich kids, etc.
Rob,
I wrote an article on the true cost of home ownership. You may find that information useful.
http://www.buyandholdblog.com/the-true-cost-of-homeownership/
My biggest advice to people: try to get a 15-year fixed rate mortgage as that will save you a lot of money in the long-term. I personally have a 10-year mortgage and my interest costs are just around $4800 per year and going down every year.
Hope this helps.
I believe it has more to do with how we relate ourselves with the money. The moves we make directly relate with how we can associate ourselves with money and what influences we are ready to take. Mastering the money game, to me,is an inner game.. We need to look into our own circumstances rather than following others. If we spend to comfort our emotions, our money journey is going to be tough but it we learn how to master our emotions this journey will be lot easier..
According to my aunt’s 90+ year old mother, “The only people who care about driving a BNW (BMW) are people who drive a BNW.” I suspect depression era folks are more capable of ignoring peer pressure and are less concerned with keeping up with the Joneses.
Wise woman 🙂
IMHO, if people won’t be happy driving a Honda in a BMW neighbourhood, then they shouldn’t move into a BMW neighbourhood. Bucking peer pressure takes a healthy dose of self confidence, humility and gratitude.
I wonder though if people are really that judgemental, or if people assume their neighbours are judging them? I don’t think I’d want to live in a neighbourhood where people were that critical of others.
I’ve been in neighborhoods where there is the pressure to “fit in” and to keep up with the other families in the neighborhood. It was really sad. There was clearly something missing from their lives that made them think that material possessions would bring happiness.
And then there are people who simply think their way is the right way, and heaven help you if you want to do something differently. You’ll just get non-stop nagging, teasing, and in some cases outright bullying.
You can find those types in any neighborhood, anywhere.
In our case, peer pressure doesn’t come from individual neighbors or co-workers (i.e., the actual human beings we interact with every day), but more from the warped picture of “success” held in front of us every day during our youth by society at large. Specifically, the fact that DH HAD to own a house like one from his childhood to feel successful in life – one that we really couldn’t afford. (OTOH, since rents skyrocketed, we can no longer easily afford to rent here either so we might as well “own” – about the same price for a lot more than an apartment would offer.)
If we gave in to peer pressure from our neighbors, we’d generate mountains of trash like them, litter, and drive our cars up and down the street half the night with ethnic music blaring, LOL. We prefer to think we’re trend-setters with things like our compost bins (which apparently none of our neighbors had ever seen before, given how many people asked me what it was).
Most of us make decisions based upon emotions.. women specially are more prone to spending based upon their relations are at stakes.. same goes for making a move.. whether it is a decision to buy a new version of iPhone or replacing your Honda with BMW.. until we are not in control of our emotions, we may continue to make such moves and lose money..
This is a great reminder. I left the fast lane to do things that were closer to my heart. But I never stop wondering about the fast lane even though I am happier now.
I have a friend who tracked along with me in her career and I cannot help wondering as she rises in her field.
So this post is a great reminder to do what is right for me now.
“Suddenly, you are on the hook for $400 monthly payments for 60 months”
Tell me where this BMW dealership is because I’ll be right there.
Ufff! This brings back (bad) memories. Part of my childhood I grew up middle class in a rich people’s neighborhood (company-paid house for my professional dad). It was hard to make friends in this strange environment, so we just demanded to be taken to our grandma’s house every day where we had cousins and friends and we played all day.
Later on, as my dad’s career reached new heights, and I was a teenager, we started moving into more hoity-toity social environments (country clubs, etc). This wasn’t in money-makes-status America, but in a place where class divisions were entrenched and family-based, and everyone needed to know who you were related to and who you were friends with. Plus, upper middle class salaries were no match for old money. It wasn’t very pleasant and, honestly, it messed me up somewhat.
Animals are social beings. Yes, someone in their infinite autistic wisdom may buck social pressure, but it takes more than mere “confidence” to be at the bottom of a social structure, especially if said social structure is more hierarchical than egalitarian. Adults might be able to negotiate it, but children aren’t there yet by a million miles.
Scientific observations of pack animals (wolves) show that alphas are much happier and healthier, and omegas are burning out with stress (as shown by hormones in their urine). It’s no different for humans–the omegas have it tougher.
Or as a Spanish proverb goes: better to be the head of a mouse than the tail of a lion.
Pick your environment carefully. “Moving up in the world” is not without its pitfalls.
I agree environment is important — it takes guts to live somewhere where your neighbours’ values are different than your own. People who are able to choose their lifestyle need to be very careful doing so. Moving from a Honda neighbourhood to a BMW neighbourhood is a choice for most people, not something they’re forced into.
Though I don’t understand what autism has to do with your argument.
Meaning if one can’t read social cues it’s easy to dismiss them.
I read faces like a kabbalist–every little detail tells me something. I get major overload from people. Once I worked as a waiter and it was overwhelming because each table was a cauldron of social forces and I could read every damn twitch. Their interpersonal dramas would consume my thoughts, and exhaust me.
My dad on the other hand can’t tell a person who is truly friendly from someone who just wants something out of him (so my mom serves as his social compass). So he goes around in his own bubble (lucky), but that has also allowed other people to do him harm (not so lucky).
People who say it’s easy to buck social pressure either haven’t really experienced it (i.e., are generally a good fit for their medium) or are just unable to tune to it. Bucking social pressure is hard–it takes skill and maturity and backbone, and it might end up in one having to drink hemlock. Not saying it’s not worth doing, I’m just saying it’s hard.
PS/EDIT: which is why I find it much less stressful to consciously pick/construct my environment than to battle against a readymade one.
Ahhhh, I get it 🙂 Thanks for elaborating!
I grew up around people who had money and people who didn’t have so much — it was odd feeling guilty for being a “have” while feeling looked down on for being a “have not”. (It’s all relative, right?) One thing that left an impression on me was that the well-off were just as stressed about money as everyone else — but the difference was the stress was often self-imposed. There’s a difference between worrying about making ends meet when you have two houses and five cars than if you have one house and one car.
Do you read 1500 Days? I loved how Mr. and Mrs. 1500 packed up when they ended up in a neighbourhood that didn’t work with their lifestyle and values.
hey, no, i didn’t know about the existence of 1500 days– did a search and found it.
sounds like you grew up middle class, which is mostly a good place to be in north america–but regardless, theres always that looking “up” to emulate someone who has more/better/bigger “stuff”– so the pressure is always there.
ha ha, writing about these things reminds me of “rushmore”. i feel the urge to copypaste the bill murray speech [ALERT: SPOILERS]:
You guys have it real easy. I never had it like this where I grew up. But I send my kids here because the fact is you go to one of the best schools in the country: Rushmore. Now, for some of you it doesn’t matter. You were born rich and you’re going to stay rich. But here’s my advice to the rest of you: Take dead aim on the rich boys. Get them in the crosshairs and take them down. Just remember, they can buy anything but they can’t buy backbone. Don’t let them forget it. Thank you.
ha ha ha ha. i love that movie.
It seems like there is always pressure when people try to “keep up with the Joneses”. Don’t give into that pressure! Remember, just because someone owns a BMW doesn’t mean they can actually afford that BMW. Don’t fall into the trap!
My husband and I are both frugal, living well within our means, and generally not caring too much what other people think of us or how we live. But we recently found ourselves surprised by peer pressure we were giving ourselves when our lease was up and the rent was raised on our old place. As we searched for a new apartment we knew we were looking for something with relatively low rent as we are trying to save well to buy a house down the line. But as our search continued we found ourselves looking at larger places, ones that would work for many years but were at the very very high end of what we could afford.
My husband made the observation one night that perhaps we were forgetting that the vast majority of our friends married in their late 20’s with two incomes going in or have been married for much longer than we have, are generally 5-10 years older than we are, and already have kids so it makes sense that they are in large houses which they buy or rent and are able to use for entertaining. Whereas we are in our early 20’s, have only been married for a year and a half, living on one income for the majority of that time (and living well, I might add), and are just starting our family. There’s absolutely no way that we could or should be trying to find a home similar to what they could, while we are fantastic friends we are simply at different points in life. None of this pressure was ever coming from our friends, it was our own sense of competition or a need to be similar sneaking in.
We ended up finding a small apartment for a fantastic price that let’s us save for a house as well as have plenty of wiggle room in the budget as we grow our family and learn what expenses that requires. We love our new place and of the many people we’ve had over not one has made us feel bad about the size or the layout (which can get awkward with lots of people) and first and foremost we love it and feel at home here.
This is something Tom Stanley discusses in _The Millionaire Next Door_, in the context of raising financially independent kids: well-meaning parents sometimes handicap their kids by giving them large gifts or chunks of money, often enabling them to buy a house in a neighborhood with a lifestyle the kids cannot afford on their own.
The truth is we stayed in our ‘starter home’ for these exact reasons. Not that *I* couldn’t handle the peer pressure but I didn’t want to raise my kids in an environment where their views would be skewed by that thinking – and it’s DEFINITELY a part of the culture in those great public schools in areas we considered – I know folks who live there and who are of a like mindset to us, not materialistic, thrify and such, and their kids have suffered for it.
Our choice instead was to stay where we are, in a neighborhood where we assuredly out-earn everyone around us, and are among a very few ‘professionals’ in the neighborhood – but where our neighbors are LOVELY – everyone values things like thriftiness and preaches reason – and we send our children to a private middle/high school with the money we’ve saved – so we’re not concerned about the quality of the education from the district we’re in – which isn’t BAD – but isn’t really what we wanted. Best part? Uniforms – much less brand consciousness in our kids than even their local peers – and lower clothing budget as a result.
Cherie,
You have spoken my mind. We also entertained the thought of moving from a starter home to an upgraded home. But, decided against the move exactly for the reasons you mentioned above. We too are planning to send our kids to a private school all the way through where we can provide them with the best educational foundation for life. Our oldest is in Pre-K now and newest one is just a month old.
Thanks.
Very good post. Those are definitely some things that could catch you by surprise. And even if you can handle it, maybe your kids won’t be able to. Being a kid is tough enough, but living in a neighborhood that might be a bit above your means could be hard on them. On the other hand, it could teach them to be strong. But before moving, it’s definitely something to think about.
Pressure? What pressure??
It could be said that I have just moved into a similar neighborhood. This new house required different-sized furniture than the old one. Virtually everything came from a consignment store. I have no problem telling people where I got it when they admire my home (and ask).
Recently, we threw a Holiday Open House so we could meet more of our new neighbors. I printed invites on paper I had and hand delivered them. I baked hundreds of cookies. I decorated with whatever I had on hand. It was a blast and now I’ve met almost all of my neighbors. The entire party didn’t cost more than $100.
The difference is that I’m FIRE and they’re not. I don’t CARE what they think about what I wear or what I drive. It’s all paid for. Perhaps the moral of this comment is that if you wait until you can actually afford to live in such a neighborhood, you won’t care what others think, either.
Didn’t we (U.S.) just play this game out the last 30 yrs. or so? Mix up the materialistic peer pressure and Narcissim, thrown in with a large helping of greed and envy. Bake in the oven of a Plutacracy and you have the turd pie economy and meltdown of 2008. To paraphrase George Castanza from “Seinfeld” “GRS readers have Hand.” We are the ones that don’t care what the neighbors think, and don’t live to impress others or live in a material junk world. If you think about it we kind of have something in common with the Amish!!!! 🙂
I like to keep my property tidy and clean and neat but am not obsessed about it, and I guess its that old Midwest living that forms my views. Things like gated communities and housing associations are very rare in Iowa, maybe only Des Moines or Cedar Rapids have them. The lifestyle inflation problem doesn’t seem to flourish in a small town, yeeaahh!
When the day comes that I concern myself with what kind of car my neighbor drives, I will have to take stock of my mental situation. That or sit down and listen to the words of the song “Iowa stubborn” from the Musical the Music Man. It really does tell you a lot about Midwest mentality!
Rail,
I was thinking the exact same thing. I couldn’t tell you what one single person on my block drives. And at a quick glance I can’t tell designer duds from nicely bought second hand clothes.
I think it’s possible that certain people are simply tuned into what their neighbors think, but a whole lot of us are not.
I also don’t believe I’m “autistic.”
I wonder how much of “keeping up with the Joneses” is perceived judgement rather than actual judgement. Or a fear of being left out.
My social circles don’t really care about designer/luxury anything — but man, the pressure to get married and have kids is an entirely different matter!
Autism is a spectrum, not an on/off thing, and it comes in many forms, . Yes it can cause social isolation and anxiety and depression, but it can also be “good” for some things– Asperger’s syndrome, which is an autism spectrum “disorder,” can be great for people in fields like math, science, engineering, music etc. Autism is a type of human diversity, like ADHD or dyslexia, and not an insult.
ps- see here: http://www.wrongplanet.net/article112.html
or better yet:
http://nymag.com/news/features/47225/
Great points Linda, thank you for sharing.
Couple quick thoughts:
1) Most people who own BMW’s probably don’t OWN them.
2) I agree with several other posts that I worry more about my kids dealing with peer pressure than me. I’m blessed, I truly don’t care what people think but it is tougher for kids.
3) I purposely bought a house I could easily afford and in a very mixed neighborhood in terms of home prices. The one downside I will say is that some don’t keep up their yards and house. I believe in some cases because of a lack of funds. I don’t mind houses worth 1/2 my house being on the same street I just wish they were all kept up.
I just wish I could afford the start home… 26 years old living in southern California… Accountant (CPA in process) and I don’t think I can ever afford even a condo.
I’m happy with my used corolla. Only thing I could see myself getting other than a toyota or honda sedan is a truck for camping/hauling more stuff.
Screw BMWs. I would never. If someone gifted me one I would sell it and buy a used Toyota truck and bank the difference.
Not sure where you live or if you’d be a DIYer (the desire for a pickup suggests “yes”), but strawbale construction is legal/ has a code in California.
http://www.dcat.net/resources/California_Straw_Bale_Code.pdf
Plenty of how-to info with a little google-fu. I’d suggest starting here:
http://www.greenhomebuilding.com/strawbale.htm
(I’ve been obsessively reading about this stuff lately. Sorry if it doesn’t apply to you– but maybe it could!)
Oh rubymermaid, you can do it!
I got my start in SoCal too. I’ll share my specifics in the hope that it will encourage you.
I saved my a** off during my twenties. By the time I was 30, I had a year’s salary in the bank. I wanted to buy real estate, but was living in West L.A., where nothing was affordable. I bought a 3+2 house in Riverside, where I grew up. It was not a practical location for my work, so I rented it out. The tax breaks were awesome, which enabled me to continue to save while I lived in my rent-controlled apartment in L.A.
During this time I moved to Northern CA, which was just as expensive, so I continued to rent. When real estate dipped in ’96, I bought an 880sf condo in Orinda, selling the first house to do so. Yes, I paid capital gains on house #1. I even borrowed against my 401k to make it happen, which I’d never do again, but I that’s another story. I sold Orinda four years later for more than twice what I paid for it. Following a career change, I outgrew the condo. I was a sales rep and needed room for an office and sample storage. I found a bigger townhouse with a two-car garage in Walnut Creek. I owned that for 11 years, until I got married for the first time at the ripe old age of 54. DH and I sold both of our houses and bought one together, for which we paid cash.
Never in a million years did I think that buying that first property would lead me to where we are now. My point is that you can do it in SoCal as a single person. All you have to do is want it enough. Create the goal, save like mad, believe in yourself, learn all you can about homeownership, and it will happen. Best of luck to you!
We moved from an ordinary suburb to one of the most upscale suburbs in Dallas/Fort Worth on the advice of a financial adviser. After 8 years, we moved back to our original suburb.
The thing we had not expected is what we called the “Southlake upcharge” — every service we used was automatically more expensive because of our address.
In my experience, people don’t interact that much with their neighbors to be very influenced by them. Most people try to maintain the level of outside appearance of the neighborhood but other than that it’s every man (family) for himself.
Our experience is the complete opposite.
We moved to a lower cost area and so when we were like 24 we ended up buying a home in an upscale neighborhood. (Housing costs were about 1/3 of where we were from, so our dollars could afford much more).
We initially had some second thoughts. What are we doing in this high-end neighborhood with our 20-year-old cars?? We felt a wee bit out of place. 😉
As we acclimated to our new city I found young people in worse neighborhoods who had our means. Their spending was *ridiculous*. We had come from such a high cost city that we were used to “having no money left over after rent”. IT was really a culture shock. Secretaries would talk about their diamonds – everyone drove brand new cars. We had been happy to own a small condo in old city, everyone I met lived in a GIANT house. They were all in debt up to their eyeballs. I had no idea what the heck. If I mentioned buying used goods or shopping thrift they treated me like a leper. (I seriously offended a friend when I suggested she consider a condo or a townhouse, while house shopping. She was too dense to realize that our first home had been a condo. She took it as I was looking down on her. ???).
& then our neighbors. I will never forget sitting around with very well off neighbors (some retired and some young and independently wealthy), and them talking openly about coupons and sales and thrift shopping. These are MY people. What a learning experience. That the people who are actually REALLY doing well financially are not in debt up to their eyeballs.
To be fair, I think most our neighbors have always had newer and nicer cars. But in my experience, everyone always has. That’s fine with me – we have never had a car payment. I am with the others on the “Who cares?”
I admit the average income in our neighborhood is WAY above ours, but we are all very much on the same page. Our neighbors are more savers than spenders. (& they can afford the nice cars, so good for them).
Perhaps, but it’s the neighbors who envy us when they learn that we have no car payments, nor any other debt aside from our mortgage.
I’ve told my kids ever since birth that the biggest secret I know to being happy is: Don’t worry about what other people think.
I had a slightly similar experience to this. When I bought my condo I was one of the younger owners, and all the other households had a higher income than mine. Since it was a new development we had to decide whether to create a reserve or not (I STRONGLY recommend that you do!!!). One of the owners said, “No, let’s keep the fees low. We can just do an assessment if something pops up.” That’s when I had my mini-panic! I couldn’t afford to get smacked with a four-figure assessment!!! I worried I had bought into a condo association whose lifestyle I couldn’t afford.
I mention this because some people don’t realize that buying a condo or co-op really means co-ownership. Yes, there are people who research this and understand that, but as evidenced by some of the stuff that’s happened with my neighbors not everyone gets this. So, when buying a condo or a co-op keep in mind that that other owners might not think twice about shelling out $4000 assessments here and there while keeping the condo fees (too) low. On the flip side, keep in mind that the other owners may be too cheap to pay for routine maintenance.
Anyway, i resolved my mini-panic by doing two things: 1. I started my OWN reserve account. I began saving money as a hedge against future assessments. 2. I kept telling myself that for all I knew my higher income neighbors were up to their eyeballs in debt 🙂
Good article! I think one of the greatest dangers is normalizing expenditures in a more upper-class neighborhood. If your neighbors have maid service and they rave about how it saves time or discuss the great deals on a Lexus, it can normalize these type of expenses–and that is harder to notice than a desire to “fit in.”
The only thing I wanted to add was in reference to kids because this sounds like my childhood–but a “tough-it-out” approach can backfire and create a child who tries to overcompensate for something she or he was denied growing up. I grew up in a neighborhood that my friends considered well-off, but nobody worried about the car my parents drove. However, once I was in the 6th grade, clothes mattered. At least it matters with girls. At that age, when kids are first learning about social pressure and trying to fit in, I don’t think conversations from a parent about money and happiness help much. We all have such a strong desire to feel worthy of love and belonging.
We, as parents, have to acknowledge a child’s basic need to belong to a social group outside of his or her family. I think parents can teach how to buy nice things while remaining on a budget. However, perhaps if you are set against helping a child to be able to fit in with children who notice clothing, you can find a way to talk about which group your child wants to fit in with.
My parents moved to a well-off neighborhood, but then refused to buy name brand clothes for the “principle of it.” It’s one thing to chose a principle when you bear the brunt of the results, but it’s another to foist that on somebody else. Children’s social circle are different from an adults. As adults, we have social circles at work, at home, and in the activities that we chose to engage. For children, most of their social circles consist of the kids who live close by. They can’t just get in a car and drive to see their friends. They have to be taken. Yet, they have more free time so friendships are more important. When I bought a house, I found a neighborhood with nice schools, but it’s not the McMansion neighborhood because I want my children to be able to fit in with the kids around them.
I don’t think it takes a move to notice that people fall into the pressures of living above their means for the sake of putting up a front about how well they are doing. My sister in law, who is 23, purchased a used 2010 BMW after my husband and I purchased our used 2010 VW Jetta. We purchased our car after our old car completely died. With two kids, we knew we needed a more reliable car and couldn’t risk throwing money towards a car off the street again. Anyway.. I set myself a budget of $15K and got our car for just $17K after taxes. My sister in law was set on purchasing a BMW, put down $7500 for a down payment and still owes $30K on the car. For $40K that she decided to put into a used BMW, she could have easily purchased a brand new car of a different brand. She clearly has a very competitive nature about her and tends to compare herself to me and my husband. I just think people who think this way are ridiculous and it’ll come back to bite them.
I think this article would have been much more valuable if it had included what the writer experienced and what he did about it, as opposed to the generic hypotheticals.
Sure are a lot of BMW haters out there. While I’ve never owned one, I wouldn’t be opposed to driving one. There are a lot of GM, Ford and Honda’s that cost more than some of the BMW’s. As long as you have the money, buy what makes you happy. It’s kind of funny how some people buy BMW’s to “fit in” with a certain crowd and how some people would never own a BMW in order to “fit in” with a certain crowd.
We have very little to do with our neighbors as adults, but we really felt the pressure during our college years, being scholarship students at a private school. Dorm living is so “in your face” compared to being able to walk into your house and shut the door to the Joneses. You live with someone you didn’t get to choose, interact with people based on what they study, and all the while everyone is taking mental notes on everything you wear and drive. Exhausting!
We live in a historic neighborhood that includes all kinds of folks, working class, professional yuppies, gay couples, retired, etc. We like our neighborhood b/c (1) we feel like we are doing well compared to our neighbors; (2) working class neighbors remind us of where we are in our journey and how grateful we should be.
But, I also live in very close proximity to super wealth (Town of Palm Beach and other pockets of my county). Saying one pays no attention to those around you sounds nice, but the studies show that most people do pay attention (perhaps not the smarty pants on this site). Living near wealth, engaging with wealthy people, seeing their lifestyle does change most people’s perspective on normal. And, it absolutely has an impact on kids.
I have friends, in my peer circle, who moved to a McMansion horse neighborhood. Shortly thereafter, they both got new leased cars. In talking with her, she mentioned that living next door to CEOs and the like impacted her “need” for a new car. Then her son wanted to buy a horse. Why, b/c his friends all have horses, that is what is normal. They settled on horse back riding lessons but those are still expensive.
I have another friend in my peer circle and her kids go to private school on “the island”, after school sleep overs for her kids are in multi-million dollar, ocean front mansions. Birthday parties for the kids are the kind of affairs one thinks of for weddings, of course the kids’ perspective on normal is skewed.
I am the only person in my close friend circle that does not have a cleaning service and does not drive a leased luxury car. I also happen to be one of just a couple who has paid of their student loans (but that is another story). I think it is important to recognize that peer pressure and the normal in your immediate surroundings does wear of. Many of us, here, are able to resist but I think we are the exception.
My father was a contractor. My parents ran their own business in a relatively small town. Dad used to say that the bigger the house, the harder it was to collect what was owed. Doctors and lawyers with BEAUTIFUL homes could not afford to pay their bills. From a young age, I understood: just because a person “owns” something, it doesn’t necessarily mean he can afford it.
I think the biggest thing is just not to move into that big house in the fancy neighborhood, if that is not what you want or can afford. It’s easy to say to just educate your kids that things don’t mean happiness, but it’s a lot harder for them to believe it if the kids around them don’t believe it.
Great article. I really believe that social pressure has more to do with financial decisions than people realize or like to admit and social media makes it worse. My Facebook feed is FULL of people bragging about purchases, new jobs, money etc. Sometimes I do get tempted to find an excuse to spend that extra dollar because everyone else is doing it. Your situation may not be the same, but a guarantee a part of you is influenced by what the Jones’ are doing.
Oh my goodness, Taylor, you hit the nail on the head. Years ago, when one of my BFF’s gave up FB for Lent, I knew I could learn from her experience and just say NO to FB completely. It reminds me of the classic mom gem: “If all your friends jumped off a roof, would you jump, too?” Don’t need it, don’t want it and I have managed to live a happy life without it.
I’m glad you agree! I was embarrassed in the past and thought I was the only one who felt the green envy monster when browsing Facebook. I wish I could delete mine, but I use it for marketing purposes. I’ve committed to using it a lot less and I don’t feel the same social pressures anymore to over consume.