Humans are social creatures, and our spending is greatly influenced by those around us. The phrase “keeping up with the Joneses” refers to the urge to match the lifestyle of our peers – if the neighbor buys a new car, you feel the itch to get one too so you’re not outdone. This isn’t just petty competition; it’s rooted in a psychological need to belong and to signal status within our social group.
In today’s world, social media has supercharged social comparison. Scrolling through Instagram or Facebook, you’re constantly exposed to curated images of friends’ (and influencers’) new homes, fancy dinners, exotic vacations, and latest gadgets. It creates an illusion that “everyone” is living luxuriously and can make you feel inadequate if you’re not consuming at a similar level. Even if logically you know those are highlight reels, emotionally it can drive FOMO – fear of missing out – which is a powerful motivator to spend. When you see a limited-time deal or an “only 2 left in stock” note online, that fear of missing out kicks in too, making you more likely to buy on impulse.
Another factor is peer pressure and norms. If all your friends go out to expensive restaurants or exchange pricey gifts, you might feel you have to as well, even if you can’t comfortably afford it. Saying “I can’t join, I’m saving money” can feel embarrassing in a culture that often equates spending with success. Advertisers leverage this by portraying products as what “cool” or successful people have, tapping into our desire for social validation.
The psychology at play includes social proof (we assume if others are doing something, it must be good) and status signaling (we buy things to show our identity or rank). For example, driving a Tesla might signal you’re tech-savvy and eco-conscious, while a Rolex might signal luxury and success. People often deny caring about status, but subconsciously many do – and marketers know it.
So how do you break free from destructive social influences on spending? Start by cultivating awareness of comparison triggers. Notice if certain friends or social media accounts consistently make you feel pressured to spend or dissatisfied with what you have. It might help to mute or unfollow accounts that spark unhealthy FOMO or consumer envy. Remember, what you see on social media is often financed by debt or not representative of someone’s overall financial health. You might be comparing your behind-the-scenes with someone else’s highlight reel.
Practice grounding yourself in your own values and goals. If your goal is to buy a house, remind yourself that’s more important than matching a friend’s new phone upgrade. Some people find it useful to literally write down their top financial priorities and stick it somewhere visible – a reality check when tempted to deviate due to social pull.
Also, try being open with close friends about money. You’d be surprised – many may share the same anxieties. If you suggest more budget-friendly social activities, others might secretly be relieved. Real friends won’t judge you for being financially responsible. In fact, that openness can relieve the collective pressure; maybe everyone was overspending to keep up with each other unnecessarily.
Another tip: set personal rules for spending. For instance, “I only buy new tech if it significantly improves my productivity or life, not just because it’s new.” Or, “Experiences with loved ones over material things.” These principles can act as a compass when social urges hit.
Lastly, put things in perspective. The neighbors might have a fancy remodeled kitchen, but perhaps they took a hefty loan for it. Meanwhile, you’ve got a growing savings account. Who’s actually in a better position? Over half of people who project wealth with luxury items may not be wealthy at all (plenty of research shows a large percentage of high-end car owners, for example, are deep in debt). So, focus on your own path. The Joneses won’t pay your bills or fund your retirement – you will.
In short, we often spend to fit in or impress, but chasing others’ lifestyles is a moving target that can sabotage your finances. When you feel that pull, step back and ask, “If I were on a desert island and no one could see what I bought, would I still want this?” It’s a cheeky way to separate true personal desire from social influence.