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Be Honest – Can You Really Afford to Keep Up with the Joneses?

Be honest. Are you trying to keep up with the Joneses and racking up unnecessary debt in the process? Are you being dishonest about your debt or other aspects of your finances with your family and friends? If you answered yes, you aren’t alone. A new poll conducted by Ipsos Reid on behalf of BDO Canada Limited, revealed that over half of all Canadians lie about their financial responsibilities.  Of those individuals  who bend the financial truth, almost half indicated that they were dishonest about their lifestyle, vacation and entertainment affordability.

Trying to keep up financially in order to maintain appearances is often cited as a contributing factor as to why individuals go into debt and experience financial problems. As our research suggests, it may also be one of the primary reasons why individuals are reluctant to talk openly about their finances or any debt they carry.

Is keeping up with the Joneses causing you to bend the truth about your spending habits and debt? It may be time for some honesty. Here are a few things you can do to avoid feeling the need to spend beyond your means and start talking openly about your finances and debt:

Take stock of your finances and what you can afford

If you aren’t honest with others about what you can afford, it’s likely that you are also not being entirely honest with yourself. If you don’t already have a budget in place, it’s a good idea to create one in order to track your money and avoiding spending more than you can afford.

Put a premium on financial stability

Material things may be nice; but overspending can threaten your financial stability and your peace of mind. Debt can be stressful, especially when you have more debt than you can handle. When tempted by the need to keep up, keep your financial wellness in mind. It may make saying no an easier process.

Realize that, most likely, the Joneses are racking up consumer debt

Although your friends may have a great new car or go on exciting vacations, it’s likely they also carry a lot of debt as well.  In fact, one in five Canadians is considered “technically insolvent”, meaning they are not able to repay the debts that they owe. Remember this the next time you are tempted to overspend in an attempt to maintain appearances.

Start the conversation about spending and debt

Perhaps the most important part, talk to your spouse or family about all aspects of your financial situation – spending habits, monthly bills, debt, savings, retirement planning, future goals. These are critical conversations.  Keeping the lines of communication open may help you and your family deal with any financial difficulties that may arise. It’s important to feel comfortable doing so; realize that by talking about your financial responsibilities, you are also taking steps to take control of them.

If you struggle with your current debt, starting an open and honest conversation with a financial professional, such as a credit counsellor or Trustee in Bankruptcy may also be a good idea. They can suggest different strategies such as budgeting, debt consolidation, or formal debt solutions, in order to keep up with your debt, rather than keeping up with the Joneses.

 



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